The board's proposed guidelines for compensation of senior executives
At the 2017 Annual General Meeting following was decided: Compensation paid to the CEO and other members of the Executive Management shall consist of a base salary, a variable salary, other benefits and pension. The total compensation should be competitive and in line with the going rate in the market, and shall be commensurate with the executive’s responsibilities and authority. The variable salary portion consists of a short-term variable salary component (yearly) and a long-term variable salary component. The short-term variable salary component is based on individual performance, shall have a cap, and never exceed 50% of base salary. The long-term variable salary component is based on the long-term performance of the Company’s stock and shall have a cap. None of the variable components shall be pensionable. Upon termination of an executive’s employment contract by the Company, a two-year notice period applies. No severance pay should be payable. Pension benefits shall be defined-contribution in all essential respects and give the members of the Executive Management the right to receive benefits from 60 or 65 years of age, depending on their position. The Board may depart from these guidelines if there are special reasons for doing so in individual cases. The proposal is consistent with the guidelines approved by the 2016 Annual General Meeting, with the adjustment that the short-term variable salary may never exceed 50% of base salary.
Employee ownership in Industrivärden
Industrivärden encourages its employees to make personal investments in Industrivärden shares, as this aligns the interests of the Company’s employees with other shareholders. The long-term incentive program that was adopted by the Annual General Meeting makes up part of the employees’ total compensation and also aims to increase employees’ ownership of stock in the Company.
Long-term incentive program 2017
The 2017 AGM resolved to offer a long-term share savings program for a maximum of 22 employees in the Industrivärden Group. The Share Savings Program is part of a competitive total compensation package in which the employee receives matching and performance shares after three years, subject to investment of part of the employee’s base salary in Industrivärden shares and subject to the employee remaining employed when matching occurs. The program aims to encourage Industrivärden’s employees to increase their ownership of stock in the Company and thereby further emphasize long-term shareholder value. The Share Savings Program is expected to increase Industrivärden’s opportunities to recruit and retain competent employees as well as the participants’ interest in and commitment to Industrivärden’s business and development. Against this background, the program is judged to have a positive impact on Industrivärden’s continued development and thereby be beneficial for both the shareholders and Industrivärden’s employees.
The cost of incentive programs was SEK 1.3 M (17.4) in 2016. In the outstanding programs, a maximum of 109,274 matching shares and 20,059 performance shares may be granted. The total liability for the programs is SEK 11.9 M (12.4).