Successful and sustainable execution of the Company’s mission, objectives and strategy for capitalizing on the Company’s long-term interests requires that the Company can recruit and retain qualified employees. The guidelines contribute to this by ensuring that senior executives can be offered a going-rate, competitive total compensation package that is commensurate with their responsibilities and authority.
CEO and the Executive Management
Compensation of the CEO and other members of the Executive Management is based on the guidelines adopted by the AGM. The Compensation Committee submits a recommendation to the Board on the CEO’s compensation and draws up, in consultation with the CEO, criteria for compensation for the other members of the Executive Management.
Compensation may consist of the following components:
- Fixed cash salary
- Short-term variable cash compensation
- Long-term variable cash compensation (incentive programs)
- Pension benefits and other benefits
CEO and the Executive Management’s compensation and pension costs for 2019 can be found in the table below.
Evaluation of compensation 2019
According to the Swdish Code of Corporate Governance (the Code), the Compensation Committee’s tasks include, among other things, monitoring and evaluating of (i) variable compensation to senior executives, (ii) the application of the guidelines for compensation to senior executives adopted by the AGM, and (iii) current compensation structures and compensation levels in the Company.
Guidelines for compensation 2020
The guidelines adopted by the Annual General Meeting 2020 for compensation pertain to Industrivärden’s CEO and other members of the Executive Management. The guidelines are to be applied for compensation agreed upon, and changes made to already agreed upon compensation, after the guidelines have been adopted by the 2020 AGM.
Compensation decided by the AGM is not covered by the guidelines. Compared with the guidelines decided upon by the 2019 AGM, the guidelines adopted by the AGM 2020 has been updated to meet the requirements arising out of implementation of the EU’s Shareholder Rights Directive.
Long-term 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 shares in the Company and thereby further emphasize long-term shareholder value. The incentive 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.
A description of outstanding incentive programs can be found in Note 7 in Industrivärden's Annual Report 2019.