Remuneration

Remuneration

Trelleborg details all aspects of remuneration – from guiding principles to breakdowns of remuneration to Group Management and the Board of Directors – in order to ensure a high degree of transparency for shareholders and other interested parties.

Principles for Remuneration

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 is to 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 2017, total remuneration of Group Management amounted to sek 78,874,000 (91,817,000), excluding pension premiums, and sek 93,487,000 (108,246,000), including pension premiums.


President
During 2017, the President and CEO received a fixed salary and other remuneration as shown in the table overleaf. Pursuant to agreements, the President has the possibility of obtaining an annual variable salary. The annual variable salary has an established ceiling for full-year 2017, corresponding to a maximum of 65 percent of fixed salary. During 2017, the annual variable salary was based on the Trelleborg Group’s profit before tax and the Group’s operating cash flow, both excluding the effect of structural changes approved by the Board and global growth. The annual variable salary does not constitute pensionable income and does not form the basis of calculation of vacation pay. For 2017, an annual variable salary of SEK 6,038,000 (6,058,000) was payable to the President.

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. The pension agreement is a defined-contribution scheme, and the premium comprises 40 percent of the fixed salary. Pension premiums were expensed in 2017 as shown in the table below.

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.

Other senior executives
The principles for remuneration of other senior executives are based on both a fixed and annual variable salary. The annual variable part has an established ceiling and accounts for a maximum of 40–65 percent of fixed annual salary. In 2017, the annual variable salary was based on the following factors: profit before tax, operating cash flow and global growth. For the business areas, other operating key figures also served as targets for annual variable salary. For other senior executives, the entire pension plan is a defined-contribution scheme, whereby the pension premium can vary between 10 and 40 percent of the fixed salary. This applies to other senior executives in all countries other than Italy, where the premium level is slightly higher. 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. The President and other senior executives have the possibility of having other benefits, primarily a company car and medical expenses insurance.

Long-term incentive program

Since 2005, the Board of Directors has annually resolved on 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 programs are ongoing, three-year programs. The Board determines annually whether to instigate new programs and, if so, the scope, objective and participants of such new programs. The incentive programs are a cash-based supplement to the annual variable salaries, provided that the executive has not terminated his employment as per December 31 in the year in which the program ends.

Taking notes with Trelleborg pen

Purpose
The incentive programs are directional and have long-term content. The aim is to increase value for the Group’s shareholders by promoting and retaining the commitment of senior executives to the Group’s development.

Target figures
The target value for the incentive programs is an annual improvement of 10 percent in the Trelleborg Group’s earnings per share. This target excludes the Group’s items affecting comparability and the impact of any share buyback programs. For the 2015–2017 program, the basis for the target figure was set as the outcome of earnings per share for 2014 and this principle has remained unchanged for the rolling three-year programs that commenced thereafter. All programs have an outcome that is limited to 33.3 percent of the maximum annual variable salary.

Outcome and payment
The outcomes of the programs are 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. A payment was made in the first quarter of 2017 for the program approved in 2014. For the program approved for 2015, payment will be made in the first quarter of 2018, for the program approved for 2016, payment will be made in the first quarter of 2019, and for the program approved for 2017, payment will be made in the first quarter of 2020. The payments do not constitute pensionable income and do not form the basis of calculation of vacation pay. In 2017, the Group’s earnings were charged with SEK 53,584,000 (45,423,000) and additional payroll overheads of SEK 8,901,000 (9,988,000).

Other incentive programs
The Group has no ongoing convertible debenture or warrant programs at the present time.

Remuneration to the Group Management 2017

 SEK 000s   Fixed salary Annual variable salary Long Term Incentive program 1) Other Benefits Total  Pension Total including pension
 President 
 2017  10,208 6,038  6,300  180  22,726  4,121 26,847
 
 2016 9,678 6,058  6,793 180  22,709  3,9593) 26,668 
 Group Management, other (9 persons) 
 2017 30,849 10,659  13,166  1,474  56,148  10,492  66,640 

 2016 33,814  16,855  17,128  1,311  69,108  12,470  81,578 
 Total  2017  41,057  16,697  19,466  4,654  78,874  14,613  93,487 
 Total  2016 43,492  22,913  23,921  1,491  91,817  16,429  108,246 

1) Expensed in 2017. Payment is made in the first quarter, 2018 to 2020, on condition that the individual is employed in the Group on December 31 of the preceding year.

Remuneration to the Board of Directors


  2017*       2016*  

TSEK

Board   Committee Total Board  Committee  Total 
Sören Mellstig   1,550 270  1,820   1,425  230 1,655 
Hans Biörck  550 175  725   520 175  695 
Gunilla Fransson  550 110  660   520  520 
Johan Malmquist  550 120  670   520  60  580 
Peter Nilsson  -  -
Anne Mette Olesen  550 60  610  520  60  580 
Susanne Pahlén Åklundh
 550 - 550  520  520 
Bo Risberg  550 170  720  520  170  690 
Göran Andersson  -  -  -  -  -  -
Peter Larsson  -  -  -  -  -  -
Mikael Nilsson  -  -  -  -  -  -
Ingemar Thörn  -  -  -  -  -  -

*Remuneration paid to the Board of Directors for the period May 2017–April 2018. The fees paid to the members of the Board of Directors elected by the Annual General Meeting are approved by the Annual General Meeting based on the proposals of the Nomination Committee. For the 2017 calendar year, remuneration was paid as per Note 11. No consulting fees were paid to the Board members. Remuneration is not paid to executive Board members. Remuneration excludes travel allowances.