The following are the principles for remuneration of senior executives adopted by the 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 shall comprise fixed and variable salary, pension and other remuneration, which together form the individual’s total remuneration package.
- Trelleborg continuously gathers and evaluates information on market-based remuneration levels for relevant industries and markets.
- Principles for remuneration may vary depending on local conditions.
- The remuneration structure will be based on such factors as position, expertise, experience and performance.
Senior executives comprise the President and other members of Group Management. The principles are supplemented by a policy for benefits for senior executives as well as a global Remuneration Policy covering all managers and senior salaried employees. In 2015, total remuneration of Group Management amounted to sek 81,714,000 (76,898,000), including pension premiums, and sek 104,255,000 (97,629,000), including pension premiums.
Annual variable salary
Variable salary is dependent on the achievement of certain performance indicators. The 2015 targets pertained to the Group’s profit before tax and the Group’s operating cash flow, both excluding the effect of structural changes approved by the Board and the profit effect from TrelleborgVibracoustic, as well as global growth. In addition, a minor portion of the annual variable salary of the President and a few senior executives was based on the operating profit in TrelleborgVibracoustic. For the business areas, other operating key figures also served as targets for annual variable salary. Annual variable salary does not constitute pensionable income and does not form the basis of vacation pay. The President’s annual variable salary can be a maximum of 65 percent of fixed salary and for other senior executives a maximum of 25-65 percent of fixed salary.
The President and other senior executives have the possibility of having, primarily, a company car and medical expenses insurance.
The pension agreements comprise defined-contribution schemes. For the President and other senior executives, the premium can vary between 20 and 45 percent of the fixed salary, where this is legally possible. For the president, the premium is computed as 40 percent of the fixed salary. Pensionable age for the President is 65; however, both the company and the President have the right, without special motivation, to request early retirement from the age of 60, with a mutual six-month notice of termination. If the President enters early retirement, the employment agreement and pension agreement are rendered invalid. In the past, some of senior
executives had agreements specifying mutual rights to request early retirement from the age of 60. These agreements have been concluded in 2015, which impacted the pension costs for the year.
For the President, a period of notice of 24 months applies when termination of employment is initiated by the company. The period of notice when termination of employment is initiated by the President is six months. Fixed salary is payable during the period of notice. Certain senior executives have extended notice of termination periods when initiated by the company, normally 12, 18 or 24 months. The period of notice from the senior executive is six months.