Guidelines for remuneration for the managing CEO and other senior executives
The annual general meeting held on 14 March 2017 resolved on guidelines for remuneration to the senior executives of SSM, as set out below, to apply until the annual general meeting 2018.
The guidelines shall apply on remuneration and other terms of employment for the CEO and other senior executives of SSM. Currently there are six senior executives of SSM, including the CEO.
SSM shall offer remuneration and other terms of employment which enables the company to recruit, motivate and retain senior executives with the skills that the company needs in order to execute its strategy and reach the targets of the operations. The general principles for the remuneration to the senior executives is that they shall be competitive and in line with market conditions.
Senior executives refer to the CEO and to members of the group management of the group who report directly to the CEO. SSM’s senior executives are at present the CEO, the Financial director, the CFO, the Chief Sales & Marketing Officer, the Head of Project Department and the Chief Communications & IR Officer (i.e. in total six persons).
The remuneration to the senior executives of SSM comprises of:
- fixed remuneration;
- variable remuneration;
- pension; and
- other customary benefits.
The fixed remuneration shall be based on market conditions and be determined with consideration of the qualitative performance of the employee. The fixed remuneration is normally reviewed once per year.
The distribution between fixed remuneration and variable remuneration shall stand in proportion to the employee’s position and duties. The total remuneration shall be in line with market conditions, competitive and reflect the employee’s area of responsibility and the complexity of the position.
The variable remuneration shall include payments for annual leave and be pensionable. For the CEO, the variable remuneration shall not exceed twelve monthly salaries (calculated with the fixed monthly salary). For other senior executives, the variable remuneration shall not exceed four monthly salaries (calculated with the fixed monthly salary).
The variable remuneration may comprise a variable cash part and a long-term variable remuneration in the form of shares and/or share related instruments in the company.
Variable remuneration in form of cash shall require achievement of defined and objectively measurable goals which are based on the group’s reported results before taxes.
Long-term remuneration in form of shares and/or share related instruments in SSM shall be distributed through the participation in a long-term incentive program resolved upon by the general meeting. Such programs shall be based on performance, require a continuing employment in the group and demand an investment by the participants themselves. The vesting period (alternatively, from the time at which the agreement was entered into until the time of the acquisition of a share) shall not be less than three years. The goal with the incentive program shall be to achieve an aligned interest between the participating employee and the company’s shareholders, as well as to create long-term value for the shareholders.
The board of directors shall annually evaluate whether a long-term share related incentive program shall be proposed to the general meeting or not.
The Group applies the ITP-plan for all employees. The CEO’s pension shall be premium based and based on the fixed salary according to customary principles.
Other benefits shall constitute a limited value in relation to the total remuneration, and correspond to what normally occurs at comparable operators.
Termination of employment
Upon the termination of employment agreements, the notice period shall, upon termination by the company not exceed twelve months, and upon termination by the senior executive not exceed six months, except in relation to the CEO where a termination period of twelve months shall apply. No severance pay shall be paid.
The guidelines shall apply for employment agreements entered into after the annual general meeting, and for potential amendments to existing terms. The board of directors may deviate from the guidelines for specific reasons in a particular case.
The CEO receives pension provisions corresponding to 30 per cent of his fixed salary and the other senior executives receive pension provisions in accordance with the applicable collective bargaining agreement between The Swedish Construction Federation (Sw. Sveriges Byggindustrier) and Ledarna (Sweden’s organisation for managers), The Swedish Association of Graduate Engineers (Sw. Sveriges ingenjörer) and Unionen (a Swedish white-collar trade union).
The CEO is entitled to an annual bonus corresponding to two per cent of an amount which is based on the company’s operating profit including financial income from its jointly owned associated companies. The bonus cannot exceed twelve fixed monthly salaries for the last bonus qualifying financial year.
The other senior executives participate in an incentive program, within which they have the possibility to receive an annual bonus of not more than four monthly salaries. The outcome of the bonuses depend on whether certain limits have been reached in relation to the group’s operating profit, operative growth and customer satisfaction.