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 2019, total remuneration of Group Management amounted to sek 57,009,000 (73,617,000), excluding pension premiums, and sek 71,341,000 (87,866,000),including pension premiums.


President
During 2019, 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 2019, corresponding to a maximum of 65 percent of fixed salary. In 2019, the annual variable salary was based on financial targets. The annual variable salary does not constitute pensionable income and does not form the basis of calculation of vacation pay. For 2019, an annual variable salary of sek 4,834,000 (5,447,000) 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 45 percent of the fixed salary. Pension premiums were expensed in 2019 as shown in the table to the right.

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 and certain benefits. The annual variable part has an established ceiling and accounts for a maximum of 40–65 percent of fixed annual salary, but in practice in 2019 amounts to a maximum of 55 percent. In 2019, the annual variable salary was based on profit before tax and operating cash flow.

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. For other Swedish senior executives, the maximum level is set at 35 percent according to policy.

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 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.

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 2017–2019 program, the basis for the target figure was set as the outcome of earnings per share for 2016 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 2019 for the program approved in 2016. For the program approved for 2017, payment will be made in the first quarter of 2020, for the program approved for 2018, payment will be made in the first quarter of 2021, and for the program approved for 2019, payment will be made in the first quarter of 2022. The payments do not constitute pensionable income and do not form the basis of calculation of vacation pay. In 2019, consolidated earnings were charged with sek 10,252,000 (51,143,000) including payroll overheads.

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

Additional information about remuneration

Remuneration in Trelleborg

Remuneration to the Group Management 2019

 SEK 000S   Fixed salary Annual variable salary Long Term Incentive program 1) Other Benefits Total  Pension Total including pension
 President
  2019  11,108  4,834  1,430  199  17, 571  4, 921  22,492
   2018  10,867 5,447  6,489  203  23,006   4,771 27,777 
 Group Management, other (8 persons) 
  2019  26,595  8,252  2,829  1,762  39,438  9,411  48,849
 
  2018  25,134 11,499  12,253  1,725  50,611  9,478  60,089 
 Total  2019  37,703  13,086  4,259  1,961  57,009  14,332  71,341
 Total  2018 36,001 16,946  18,742  1,928  73,617  14,249  87,866 

1) Expensed in 2019. Payment is made in the first quarter, 2020 to 2022, on condition that the individual is employed in the Group on December 31 of the preceding year

Remuneration to the Board of Directors 2019


   2019*   2019*

TSEK

 Board   Committee Total
Hans Biörck  1 750 340  2,090 
Gunilla Fransson  600 220  820 
Johan Malmquist  600 150  750 
Peter Nilsson  - -  - 
Anne Mette Olesen  600 75  675 
Susanne Pahlén Åklundh
  600 140 740 
Panu Routila  600 140 740 
Jan Ståhlberg   600 75 675
Jimmy Faltin  -  -  -
Peter Larsson  -  -  -
Lars Pettersson  -  -  -
Ingemar Thörn  -  -  -

*Remuneration paid to the Board of Directors for the period April 2019–April 2020. 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 2019 calendar year, remuneration was paid as per Note 10. No consulting fees were paid to the Board members. Remuneration is not paid to executive Board members. Remuneration excludes travel allowances.