Remuneration to board members

At the AGM that was held on 5 May 2023, it was decided that the fees for the board members for the period until the next annual general meeting shall be as follows. The fees to the board of directors shall amount to SEK 640,000 to the chairman of the board and SEK 320,000 each to the other board members who are not employees of the company, SEK 150,000 to the chairman of the audit committee and SEK 75,000 to other members of the audit committee.

Guidelines for remuneration to senior executives

The guidelines decided at the AGM in May 2022 also apply to 2023 and no new proposal was put forth to the 2023 AGM.

Guidelines for remuneration to senior executives adopted by the 2022 AGM

How the guidelines promote the Company’s strategy, long-term interests and sustainability
A successful implementation of the Company’s business strategy and the safeguarding of the Company’s long-term interests, including its sustainability agenda, presupposes that the Company can recruit and retain qualified employees. The Company needs to offer competitive remuneration in order to do this. These guidelines make it possible for senior executives to offer competitive total remuneration packages. Variable cash remuneration that is covered by these guidelines is aimed at promoting the Company’s business strategy and long-term interests, which includes its sustainability agenda. This is executed via the financial and non-financial targets upon which variable cash remuneration is based and which are clearly linked to the business strategy and the Company’s sustainability agenda. The variable remuneration is described in more detail in the section, “Variable cash remuneration” below.

Forms of remuneration, etc.
The total remuneration to each senior executive must be competitive and it shall be comprised of: fixed cash salary, variable cash salary, pension benefits and other benefits. The AGM may, in addition to this, and independent of these guidelines, decide on such things as share-based and share-price-based remuneration. Fixed and variable remuneration shall be set in relation to the senior executive’s responsibilities and authority.

Variable cash remuneration
Meeting the criteria for payment of variable cash remuneration shall be measured over one-year periods. There must be an upper limit for variable cash remuneration and it must be set in relation to the fixed salary. The maximum is 50 percent of the fixed annual cash salary. The variable cash remuneration must be linked to pre-determined, measurable criteria, which can be financial, or non-financial. Individually-set quantitative and qualitative goals are also allowed. The outcome, in relation to these pre-set targets forms the basis for the total amount of variable cash remuneration that is possible. The criteria must be designed in such a way to promote the Company’s business strategy and long-term interests, including the sustainability agenda. For example, there must be a clear link to the business strategy or promoting the senior executive’s long-term development. Once the measurement period upon which variable cash remuneration is based has expired, there will be an evaluation to determine the extent to which the criteria has been fulfilled. The Board is responsible for the assessment of variable cash remuneration to the CEO. For other senior executives, the CEO makes that assessment. For remuneration based on financial targets, the most recent published financial information for the Company shall be used.
Sometimes, additional variable cash remuneration might be paid, in extraordinary circumstances, provided that they are limited in time, at the individual level and only aimed at recruiting or retaining senior executives, or, as remuneration for extraordinary work-related performance over and above the senior executive’s regular duties. This type of compensation may not exceed 100 percent of the fixed annual cash salary and for each person, it may only be paid out once per year. Decisions about this type of remuneration to the CEO may only be made by the Board, based on a proposal by the Remuneration Committee. Decisions about this type of remuneration to other senior executives may only be make by the Remuneration Committee, based on a proposal by the CEO.

Pension and insurance
For senior executives, pension benefits, including health insurance, must be defined-contribution. Variable cash compensation must be pensionable. The pension premiums for defined-contribution pensions shall amount to a maximum of 35 percent of the fixed and variable annual cash salary.

Other benefits
Other benefits may include such things as life insurance, health insurance and company car. These benefits may not exceed 15 percent of the fixed annual cash salary. With regard to pension benefits and other benefits in employment relationships that are subject to rules other than what applies in Sweden, appropriate adjustments may be made to comply with mandatory rules or established local practice, whereby the overall purpose of these guidelines shall be met as far as possible. For senior executives who are stationed in a country other than their home country, additional remuneration and other benefits may be paid to a reasonable extent, taking into account the special circumstances associated with such postings abroad, whereby the overall purpose of these guidelines shall be met as far as possible. These benefits may not exceed 20 percent of the fixed annual cash salary.

Remuneration to Board members in excess of Board fees
For Board members who do work for the Company over and above their Board responsibilities, it shall be possible for them to receive consultancy fees and other compensation for their efforts. Decisions about consultancy fees and other remuneration to AGM-elected Board members who are not employees of the Company shall be made by the Board.

Termination of employment
The notice period for termination of employment is 12 months. Notice of termination is normally 6 months for the CEO and 3-6 months for other senior executives. For senior executives who wish to terminate their employment, the notice period shall be at most 6 months, without any right to severance pay. Fixed cash salary during the notice period and severance pay may not exceed an amount corresponding to the fixed cash salary for 18 months. It is also possible to pay compensation for commitments to restrict competition. This form of remuneration is meant to compensate for loss of income and it may only be given for the extent to which the senior executive is denied severance pay. The maximum amount for that compensation is 100 percent of the fixed cash salary at the time of termination, unless otherwise provided by mandatory collective agreement provisions and paid during the period of the commitment to restrict competition, which shall not exceed 12 months after the termination of employment.

Salary and benefits for employees
The Board has considered a variety of things prior to formulating these guidelines and their limitations concerning remuneration and terms of employment for employees of the Company, including the total remuneration package, its various components, salary increases, the rate of such increases over time, etc.

Decision process for establishing, reviewing and implementing the guidelines
The Board has set up a Remuneration Committee. The Remuneration Committee is responsible for proposing the guidelines for remuneration to senior executives and presenting its proposals to the Board. The Board is required to prepare a proposal for new guidelines at least once every 4 years and submit its proposal to the AGM for a decision. Those guidelines shall apply until new guidelines have been adopted by the AGM. The Remuneration Committee is also responsible for monitoring and evaluating the programme for variable remuneration to senior executives, applying the guidelines for remuneration to senior executives, along with the current remuneration structures and levels in the Company. Members of the Remuneration Committee are independent in relation to the Company and the executive management team. Whenever the Board of Directors makes decisions on remuneration issues, the CEO and other members of the executive management team may not be present, if the matter in any way concerns them.

Deviation from the guidelines
The Board may decide to temporarily deviate from the guidelines, partially or fully, if, in individual cases, there are special reasons for doing so and the deviation is deemed necessary for meeting the Company’s long-term interests, including its sustainability agenda and/or ensuring its financial viability. As stated above, the Remuneration Committee is responsible for putting forth proposals to the Board on remuneration issues, which includes decisions to deviate from the guidelines.

Incentive programmes

The recent annual general meetings in Instalco have resolved to establish long-term incentive programs consisting of warrants for employees of the group. This to create conditions for strengthening the motivation of employees whom the group has identified as significant and trusted in the short and long term. For further information on the outstanding long-term incentive programs, please refer to the minutes from the respective annual general meetings under General Meetings.

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