Remuneration Executive Management and Board of Directors

Preparation and decision-making process for remuneration to the President and other senior executives

Guidelines for remuneration of the President and other senior executives are determined at the Annual General Meeting (AGM). Remuneration to the President/CEO is considered by the Remuneration Committee and decided by the Board of directors. The President/CEO considers and decides on the remuneration to the other senior executives.

Guidelines for remuneration to the President and other senior executives

Decided by AGM September 2017

In accordance with the guidelines prepared by the Board, the 2017 AGM adopted the following policies for remuneration and other terms of employment for company management (the President and other members of Executive Group management). The guidelines are unchanged since the AGM 2013.

Remuneration to company management is to be based on normal market terms, while also supporting the interests of shareholders. Remuneration primarily comprises fixed salary, variable salary, pension benefits and other benefits, such as a company car. Pension benefits are defined-contribution.

Fixed salary is established by accounting for the senior executive’s experience, responsibilities and performance and is based on market conditions. Variable remuneration is proportionate to the executive’s responsibilities and authority. It has a maximum limit and is based on the attainment of goals that promote the company’s long-term value-creation. Where applicable, variable salary is based on pre-determined and measurable criteria. The company’s costs for the variable salary portion for the President and other members of company management amount to not more than 50% of the fixed salary costs.

The notice period for terminating employment by the senior executive is a maximum of 12 months. If employment is terminated by the company, the total notice period and the time during which severance pay is received is a maximum of 24 months. Ordinary retirement age is 65. Pension terms are market-based and based on defined-contribution pension solutions. The pension premium is not more than 30% of the fixed and variable salary.

Board members with special expertise who perform services for the company beyond the scope of the Board assignment may receive a fee for such services payable at market rates. Decisions on such fees are addressed by the Board of Directors, without the participation of the relevant Board member in either the consideration or the decision.

Matters concerning remuneration to company management are addressed by the President. Remuneration to the President is resolved by the Board of Directors.

Remuneration 2016/2017 to the Board of Directors, President and other senior executives

SEK Thousand Board fee Basic salary Variable renumeration Other renumeration Pension renumeration Total
Total remuneration of the Board 1,455 0 0 0 0 1,455
Total renumeration to the President and other senior executives 0 10,034 1,336 0 2,160 13,530
Total 1,455 10,034 1,336 0 2,160 14,985

Remuneration of the Board

Fees are paid to the Board Chairman and other external members in accordance with the decision of the Annual General Meeting. Internal Board members are not paid a fee. SEK 185,000 was paid in fees to external Board members in 2016/2017 and SEK 370,000 to the Board Chairman. For Audit Committee work, SEK 40,000 was paid to external Board members and SEK 80,000 to the Chairman of the Audit Committee. No separate fee is paid for Remuneration Committee work. Other remuneration pertains to consultant services for assignments in which a Board member has specialist expertise. In cases where Board members invoice their fees, social security contributions are included in the invoice.

Remuneration of the President and other senior executives

Remuneration of the President/CEO and other senior executives is based on market terms and comprises basic salary, variable salary, other benefits and pension. The fixed salary is determined taking into account competence, areas of responsibility and performance. The variable salary is performance-based and maximized to a percentage of the fixed annual salary, which is a maximum of 50%. “Other senior executives” refers to the eight individuals who, together with the President/CEO, comprised Group Management during the fiscal year.

Preparation and decision-making process

The Board fee was decided at the Annual General Meeting in accordance with the proposal of the Nomination Committee. Guidelines for remuneration of the President and other senior executives are determined at the Annual General Meeting. Remuneration to the President/CEO was considered by the Remuneration Committee and decided by the Board of Directors. The President/CEO considered and decided on the remuneration of other senior executives.

Terms of notice and severance pay

The company must give the President/CEO 18 months’ notice of termination. The President/CEO must give the company six months’ notice of resignation. The notice periods for other senior executives range from three to 12 months on the part of the company, and from three to six months on the part of the executives. There are no special agreements regarding severance pay.

Pension

The retirement age for the President and other senior executives is 65 years. Pension benefits for the President and other senior executives are paid within the framework of the pension plan that applies to all employees, and which comprises defined-contribution and vested pension.

Share-based remunerations

Convertibles programs enable employees and external Board members to acquire shares in the company. The fair value of the allocated options is recognized as a personnel cost with a corresponding increase in equity. The fair value is calculated on the allocation date and is allocated over the vesting period. The fair value of the allocated options is calculated according to the Black & Scholes model and consideration is given to the terms and conditions that applied on the allocation date. The amount recognized as an expense is adjusted to reflect the actual number of vested options. The convertible programs entitle the employees and external Board members to acquire convertibles. During the fiscal year, share-based remuneration was expensed in an amount of SEK 0 thousand (140), of which SEK 0 thousand (0) pertained to senior executives, including the President/CEO.

For further information on outstanding share-based incentive programs, please see:

Evaluation of variable salary, remuneration guidelines, current remuneration structures and levels

The Board of Directors of Sectra AB has established a Remuneration Committee. The main task of the Remuneration Committee is to prepare the Board’s decisions on matters pertaining to principles for remuneration and other terms of employment for the President and senior management, and the guidelines for remuneration of senior executives that the Annual General Meeting is legally obliged to establish. Remuneration and other terms of employment for senior executives directly subordinate to the President are decided on by the President in accordance with the salary policy established by the Board and the guidelines adopted by the AGM.

The Remuneration Committee’s tasks are also to:

  • monitor and evaluate all programs for variable remuneration of company management.
  • monitor and evaluate the application of the guidelines for remuneration of senior executives that the AGM is legally obliged to establish, as well as the current remuneration structures and levels in the company.

The Board's presentation of the remuneration committee's evaluation 2016/2017 for download (pdf):

Statement of Auditor whether the guidelines for remuneration to senior executives adopted by the AGM of shareholders have been complied with for download (pdf):

Archive evaluation and statement

The Board's presentation of the remuneration committee's evaluation 2015/2016 for download (pdf):

Statement of Auditor whether the guidelines for remuneration to senior executives adopted by the Annual General Meeting of shareholders have been complied with for download (pdf):

The Board's presentation of the remuneration committee's evaluation 2014/2015 for download (pdf):

Statement of Auditor whether the guidelines for remuneration to senior executives adopted by the Annual General Meeting of shareholders have been complied with for download (pdf):

The Board's presentation of the remuneration committee's evaluation 2013/2014 for download (pdf):

Statement of Auditor whether the guidelines for remuneration to senior executives adopted by the Annual General Meeting of shareholders have been complied with for download (pdf):

 

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