Remuneration

The following principles for remuneration of senior executives were adopted by the 2023 Annual General Meeting:

• Trelleborg will offer market-based terms of employment that enable the company to recruit, develop and retain senior executives.
• The remuneration structure is to comprise fixed and variable remuneration (annual variable salary and long-term incentive programs), pension provisions and other remuneration, which together form the individual’s total remuneration package.
• Principles for remuneration may vary depending on local conditions.

Senior executives comprise the President and CEO as well as other members of Group Management. The principles are supplemented by a directive governing benefits for senior executives as well as a global Remuneration Policy covering all managers and senior salaried employees. In 2023, total remuneration of Group Management amounted to SEK 89,447,000 (79,892,000), excluding pension premiums, and SEK 100,268,000 (91,039,000), including pension premiums.

President
During 2023, the President and CEO received a fixed salary and other remuneration as shown in the table further down on the page. Pursuant to agreements, the President has the possibility of earning an annual variable remuneration. The annual variable remuneration has a fixed ceiling, which corresponds to a maximum of 70 percent of the fixed annual salary. In 2023, the annual variable remuneration was based on financial targets and specific sustainability targets. The annual variable remuneration does not constitute pensionable income and does not form the basis for the calculation of vacation pay. For 2023, an annual variable remuneration of SEK 6,441,000 (7,279,000) was paid to the President.

Pensionable age for the President is 65; however, both the company and the President have the right, without a special cause, to request an early retirement from the age of 60, with a mutual six-month notice of termination. Should the President enter into an early retirement, the employment agreement and the pension agreement will be null and void. The pension agreement is a defined-contribution scheme, and the premium comprises 45 percent of the fixed salary, including vacation pay. Pension premiums were paid in 2023 as shown in the adjacent table. For the President, a notice period of 24 months applies should termination of employment be initiated by the company. Should a termination of employment be initiated by the President, the notice period shall be six months.

Other senior executives
The principles for remuneration of other senior executives are based on a fixed salary and annual variable remuneration as well as certain benefits. The annual variable remuneration has a fixed ceiling accounting for a maximum of 45–70 percent of the fixed annual salary. For 2023, the annual variable salary was based on profit before tax, operating cash flow, and specific sustainability targets. 

For other senior executives, the entire pension plan was based on a defined-contribution model, whereby the pension premium varied between 10 and 35 percent of the fixed salary. For other Swedish senior executives, the maximum level of 35 percent in accordance with the policy was applied in 2023.

Certain senior executives have extended notice periods when a termination of employment is initiated by the company, normally 12, 18, or 24 months. Should a termination of employment be initiated by a senior executive, the notice period is six months. The President and other senior executives have also been entitled to other benefits, primarily a company car and medical expenses insurance. 

Purpose
The long-term incentive programs shall be designed to contribute to Trelleborg’s business strategy and long-term interests including its sustainability. The ultimate target is to increase the shareholder value by promoting, developing, and retaining senior executives.

Target figures

The target value for the long-term incentive program is an annual improvement of 10 percent of the Trelleborg Group’s earnings per share. This target shall exclude the Group’s items affecting comparability and the impact of any share repurchase programs. For the 2018–2020 programs, the basis for the target figure was set as the outcome of earnings per share for 2017. This principle has remained unchanged for the rolling three-year programs that commenced thereafter. The 2020–2022, 2021–2023 and 2022–2024 programs have an outcome limited to 33.33 percent of the maximum annual variable salary per year in the program. The 2023–2025 program has an outcome that is capped to a certain extent by the individual’s annual fixed salary.

Outcome and payment

The outcome of the programs are calculated annually, accumulated over the respective three-year period and potential payments are made in the first quarter of the year after  he  program expires. Therefore, a payment was made in the first quarter of 2023 for the program approved in 2020–2022. For the program approved for 2021–2023, payment will be made in the first quarter of 2024, for the program approved for 2022–2024, payment will be made in the first quarter of 2025, and for the program approved for 2023–2025, payment will be made in the first quarter of 2026. These payments do not constitute pensionable income and do not form the basis of calculation of vacation payment.

In 2023, SEK 54,717,000 (53,668,000) was expensed as the targets were achieved in full.

Other incentive programs
The Group has no other ongoing incentive programs such as convertible debentures, warrant programs, share incentive programs or similar at the present time.