Long-term incentive program
Since 2005, the Board of Directors has annually resolved to introduce a long-term incentive program for the President and for certain senior executives considered to exercise a significant influence on the Trelleborg Group’s earnings per share. These pro-grams are ongoing, three-year programs. The Board determines annually whether to instigate new pro-grams and, if so, the scope, objective and partici-pants of such new programs. The incentive programs are cash-based and constitute a supplement to the annual variable salaries, provided that the executive has not terminated his employment at the Trelleborg Group as per December 31 in the year in which the program ends.
The incentive programs are directional and have long-term content. The aim is to continue to promote and retain the commitment of senior executives to the Group’s development, thereby increasing value for the Group’s shareholders.
The target value for the incentive programs is the Trelleborg Group’s earnings per share, with an annual improvement of 10 percent, excluding items affecting comparability and the impact of any share buyback programs, and includes the costs for the programs. For the current programs, the Board has estab-lished a target of sek 2.56 in earnings per share for 2009, a target of sek 2.85 for 2010 and a target of sek 5.20 for 2011, with the upper cap for payments for all programs set at 25 percent of the maximum
annual variable salary per program per year.
The result is calculated annually and accumulated over the three-year period and potential payments are made in the first quarter of the year after the program expires. For the program approved for 2009, payment will be made in the first quarter of 2012, for the program approved for 2010, payment will be made in the first quarter of 2013, and for the program approved for 2011, payment will be made in the first quarter of 2014. The payments do not constitute pensionable income and do not form
the basis of calculation of vacation pay. In 2011, earnings were charged with sek 26,798,000 (20,541,000) and additional payroll expenses of sek 6,396,000 (4,373,000).
The Group has no ongoing convertible debenture or warrant programs at the present time.