The following are the principles for remuneration of senior executives adopted by the Annual General Meeting:
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.
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.