Remuneration to the Board of Directors
The chairman and the other members of the board of directors are paid a fee in accordance with the decision of the annual general meeting. At the annual general meeting on 22 April 2021, it was resolved that the remuneration is to be paid in quarterly payments with SEK 200,000 to Ingar Jensen, Johan Karlsson, Pernilla Lundin and Marie Grönborg and USD 18,000 to Mario Houde. No remuneration shall be paid to the rest of the board of directors. The chairman of the board shall be paid SEK 500,000. In addition, the chairman of the remuneration committee will receive fees totaling SEK 50,000 and the other members of the remuneration committee will receive fees totaling SEK 15,000 and the chairman of the audit committee will receive fees totaling SEK 100,000 and the other members of the audit committee will receive fees totaling SEK 25,000.
The board members of the Company are not entitled to any benefits after their resignation as members of the board.
Guidelines for remuneration to senior executives
The following guidelines for remuneration to senior executives in the Group were adopted at the annual general meeting on 22 April 2021.
These guidelines apply to the CEO and other senior executives in the company group and remuneration other than remuneration to the board of directors.
Regarding employment conditions that are governed by rules other than Swedish, appropriate adjustments may be made in order to comply with such mandatory rules or established local practice, whereby the general objectives of these guidelines shall, to the extent possible, be met.
The guidelines promotion of the Company’s business strategy, long-term interest and sustainability
The guidelines shall contribute to the possibility to create conditions for the Company to retain and recruit competent and committed senior executives in order to successfully implement the Company’s business strategy and meet the Company’s long-term interests, including sustainability. The guidelines shall further stimulate an increased interest in the business and earnings development as a whole, and to increase the motivation for the senior executives and increase positive cohesion in the Company. The Guidelines shall also contribute to good ethics and corporate culture.
In order to achieve the Company’s business strategy, the total annual remuneration must be market-based and competitive in the employment market in which the senior executive is situated and taking into account the individual’s qualifications and experience and that exceptional performance must be reflected in the total remuneration.
Each year, the board of directors evaluates whether a long-term share-related incentive program should be proposed to the annual general meeting.
The forms of remuneration etc.
The remuneration to the senior executives in the Company shall comprise of a fixed salary, possible variable cash remuneration and other customary benefits as well as pension payments. The total remuneration, including pension benefits, shall, on a yearly basis, be in line with market practice and competitive on the labor market where the senior executive is based and take into account the individual responsibility and authority as well as qualifications and experiences of the senior executive as well as reflecting any notable achievements.. The fixed salary shall be revised on a yearly basis.
The senior executives’ fixed salary is to be competitive and based on the individual senior executive’s competences, responsibilities and performance.
The senior executives may receive variable remuneration in addition to fixed salaries. Variable cash remuneration is conditional upon the fulfillment of defined and measurable goals which should be determined by results. The variable cash remuneration should to the CEO at most amount to 30 percent of the annual fixed salary and for other the senior executives amount to 20 percent of the annual fixed salary. The variable remuneration is based on the outcome in relation to individually set goals.
The variable cash remuneration shall be based on the outcome of actual pre-determined targets based on the Company’s business strategy and the long term business plan approved by the board of directors. The targets for receiving variable cash remuneration may include share based or financial targets, either on group or section level, operative goals and goals for sustainability and social responsibility, employee engagement or customer satisfaction. These targets are to be established and documented annually. The Company has established financial targets and KPIs in relation strategic and business critical initiatives and projects which ensures alignment with the business plan and business strategy for a continued sustainable business. The variable cash remuneration shall also be designed with the aim of achieving greater community of interest between the participating senior executive and the Company’s shareholders in order to contribute to the Company’s long term interest, including sustainability.
Cash based variable remuneration calculated proportionally during the vesting year and requires continued employment and that no notice of termination is ongoing at the year end. Terms for variable cash remuneration should be designed so that the board of directors may limit or omit payment of variable cash remuneration, provided that exceptional economic circumstances are at hand, or if it motivated because of any other reasons, if the board of directors finds the payments unreasonable and incompatible with the Company’s responsibility in relation to its shareholders. The board of directors shall also have the right to pay variable remuneration on an individual level in special circumstances for extraordinary achievements or during the year change the criteria for fulfillment of bonus targets if there are special reasons for it and a deviation is necessary to ensure the Company’s long term interests and sustainability or to ensure the Company’s economic viability. Such remuneration may not exceed an amount corresponding to 50 percent of the fixed annual salary and not be paid more than once a year per individual. A resolution for such remuneration shall be made by the board of directors after a proposal from the remuneration committee. The Company has no right according to agreements to reclaim variable remuneration paid in cash.
The Company may provide other benefits to senior executives in accordance with local practice. Such other benefits may include company car and company healthcare etc. Such benefits may amount to a maximum of 15 percent of the fixed annual cash salary.
For executives who are stationed in a country other than their home country, additional remuneration and other benefits may be paid to a reasonable extent, taking into account the particular circumstances associated with such expatriation, whereby the overall purpose of these guidelines is to be met as far as possible. Such benefits may amount to a maximum of 50 percent of the fixed annual cash salary.
Pension benefits for the CEO and other senior executives must reflect customary market terms, compared with that which generally applies to executives in comparable positions in other companies, and should normally be based upon defined contribution pension plans. Retirement occurs at the relevant/ applicable retirement age.
Pension benefits, including health insurance, must be defined in contribution schemes with respect to the CEO. Variable cash payments shall not entitle to pension. Pension premiums for defined contribution schemes shall amount to a maximum of 35 percent of the fixed annual cash salary.
For other senior executives, pension benefits, including health insurance, must be defined in contribution schemes unless the employee is covered by defined-benefit pensions under compulsory collective agreement provisions. Variable cash compensation shall be pension-based only insofar as it is compelled by compulsory collective agreement provisions applicable to the senior executive. Pension premiums for defined contribution schemes shall amount to a maximum of 35 percent of the fixed annual cash salary.
Payment of consultancy fees and additional remuneration may be paid to directors after decision by the board of directors, after preparation by the remuneration committee, if a director performs services on behalf of the Company, which do not constitute board work. Such remuneration shall be designed in accordance with these guidelines.
Notice of termination and severance pay
Fixed salary during the notice period and any severance pay shall in total not exceed an amount corresponding to a maximum of a two years’ fixed salary. The maximum mutual notice period in any senior executive’s contract may be no more than twelve months during which time salary payment will continue. The Company shall not allow any additional contractual severance payments.
Deviations from the guidelines
The board of directors shall be entitled to deviate from the guidelines, for example with respect to recruitments of senior executives on the global labor market to be able to offer competitive terms and conditions], in an individual case if there are special reasons for it and a deviation is necessary to ensure the Company’s long term interests and sustainability or to ensure the Company’s economic viability. Such deviation shall also be approved by the remuneration committee. An arrangement deviating from the guidelines can be renewed but each such arrangement shall be limited in time and shall not exceed a period of 24 months and twice the remuneration that the individual would have received had no additional arrangement been made.
Preparation, decision processes etc.
Decisions regarding salary and other remuneration to the managing director and other senior executives are prepared, within the scope of the guidelines resolved upon by the annual general meeting, by the remuneration committee and resolved on by the board of directors.
The remuneration committee shall also prepare the board of directors’ decisions on issues concerning principles for remuneration. The remuneration committee shall also monitor and evaluate programs for variable remuneration, both ongoing and those that have ended during the year, for the senior executives and monitor and evaluate the application of these guidelines for remuneration to the senior executives, as well as and current remuneration structures and levels in the Company.
The board of directors shall prepare proposals for new guidelines at least every four years and submit the proposal for resolution at the annual general meeting. The guidelines shall apply until new guidelines have been adopted by the annual general meeting.
The guidelines shall be applied in relation to every commitment on compensation to senior executives and every change in such commitment, which is resolved after the annual general meeting at which the guidelines were adopted. Thus, the guidelines have no impact on already pre-existing contractually binding commitments. Guidelines resolved upon may also be amended by way of a resolution by any general meeting other than the annual general meeting.
Within the scope and on the basis of the guidelines, the board of directors shall annually decide on the specific revised remuneration terms for each senior executive and make such other decisions on compensation to senior executives that may be required. The CEO or other senior executives shall not participate in the remuneration committee’s and the board of directors’ processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters.
When the measurable period for fulfilment of the criteria for payment of variable cash compensation has ended, the extent to which the criteria have been met shall be determined. The board of directors, after following recommendation by the remuneration committee, is responsible for the assessment of variable cash remuneration to the CEO and the CEO is responsible for the assessment of variable cash remuneration to other executives. With respect to financial targets the evaluation shall be based on the Company’s latest publicly available financial information.
Day to day costs such as travel expenses for the CEO are approved by the chairman of the board. New recruitments, salary changes and other significant changes for other senior executives than the CEO are subject to approval from the chairman of the board of directors, whereas minor adjustments, and day to day costs are approved by the CEO. Payout of fixed base salary is prepared by local payroll departments and are approved before payout by the local HR representative. Payout of short-term variable remuneration to senior executives and the CEO is subject to approval from the remuneration committee. Eligibility for share-related incentive program must be approved by the board of directors based on the proposal approved at the annual general meeting.
Compliance with guidelines is controlled annually through the following activities:
- Collection of documented annual targets for short-term variable pay
- Random samples of salary payout approvals
- Sample reports from payroll systems to identify any out of the ordinary payouts
The results of the controls are summarized and reported to the Remuneration Committee.
The Company has received benchmark data from third party sources to secure that compensation to the CEO and other senior executives reflects what is offered to executives in comparable positions in other companies. Market rate is also secured through recruitment processes, in the cases where executives are recruited externally.
In the preparation of the board of directors’ proposal for these guidelines for compensation to the CEO and other senior executives, salary and employment conditions for employees of the Company have been taken into account by including information on the employees’ total remuneration, the components of the remuneration and increase and growth rate over time, in the board of directors’ basis of decision.
The board of directors considers that the guidelines on remuneration to senior executives are proportionate in relation to salary levels, remuneration levels and conditions for other employees in the group.