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Compensation principles

The board's proposed guidelines for compensation of senior executives

The 2018 AGM resolved in favor of the Board’s recommendation to adopt the following guidelines for compensation of senior executives: 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 shortterm 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 maximum two-year notice period applies. No severance pay should be payable. Pension benefits shall be defined- contribution solutions 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 Board of Directors recommends that the 2019 AGM resolve in favor of guidelines that are unchanged compared with those approved by the 2018 AGM.



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.

Incentive programs

The incentive programs are part of a competitive total compensation package in which the employee has the opportunity to receive matching shares and performance shares after three years, subject to investment of part of the employee’s base salary in Industrivärden shares. 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. In the outstanding programs, a maximum of 16,802 matching shares and 55,171 performance shares may be granted. Grants of matching shares require continued employment at the time of the match. Grants of performance shares are conditional upon an average annual total return for Industrivärden’s Class C shares during the three-year lock-in period that is equal to or higher than the SIXRX index, and full grants of performance shares require an average annual total return for Industrivärden’s Class C shares during the three-year lock-in period that exceeds the SIXRX index by 2 percentage points per year. The cost of incentive programs in 2018 was SEK 0.8 M (5.3). The total liability for the programs is SEK 4.2 M (11.3).

Long-term incentive program 2018

The 2018 AGM resolved to offer a long-term share savings program for a maximum of 20 employees in the Industrivärden Group. during 2018, 12,096 shares were bought within the program, which cab qualify for a maximum grant of 6,048 matching shares and 21,332 performance shares.

 

Board Fees

           

Attendance at meetings

 

Name

Born

Year elected

Role on board

Audit committee

Compensation Committee

Board

Audit Committee

Compensation Committee

Fee 2017 SEK 000s

Fredrik Lundberg

 

2004

Chairman

Member

Chair

10

3

2

2,000

Pär Boman

 

2013

Vice Chairman

Chair

-

11

4

1

1,200

Christian Caspar

 

2011

Member

Member

-

11

4

-

600

Bengt Kjell

 

2015

Member

-

-

8

-

-

600

Nina Linander

 

2014

Member

Member

-

11

4

-

600

Annika Lundius

 

2014

Member

-

Member

10

-

3

600

Lars Pettersson

 

2015

Member

 -

Member

11

-

3

600

Helena Stjernholm

 

2016

Member

-

-

11

-

-

-

Total

 

 

 

 

 

     

6,200

Prior to the 2018 AGM the Nominating Committee made the following determination regarding directors’ independence: Pär Boman has not been found to be independent in relation the Company and the Executive Management, nor in relation to major shareholders. Fredrik Lundberg and Lars Pettersson have been found to be independent in relation to the Company and Executive Management, but not in relation to major shareholders. Helena Stjernholm has been found to be independent in relation to major shareholders but not in relation to the Company and Executive Management. Other board members have been found to be independent in relation to the Company and Executive Management as well as in relation to major shareholders.The Board’s composition meets the Code’s requirements for independent directors.