Principles for remuneration and incentive programs

Principles for remuneration and other terms of employment for senior executives

Remuneration for the CEO and other senior executives shall consist of basic salary, variable salary, pension and other remuneration. All pension benefits shall be of the defined contribution type. Variable salary is prepared by the Remuneration Committee and resolved by the Board of Directors.

Fixed basic salary
The fixed basic salary for the CEO and other senior executives is reviewed annually. The distribution between basic salary and, where applicable, variable salary, shall be proportionate to the executive’s responsibilities and powers.

Variable salary (Short-Term Incentive STI)
The variable salary for the CEO shall amount to a maximum of 100 per cent of the annual salary. For other senior executives, the maximum amount of variable salary shall be equal to 80-100 per cent of an annual salary. The variable salary for the CEO and other senior executives is based on the outcome of a number of primarily quantitative parameters in relation to predetermined targets. The quantitative parameters relate to the company’s share price performance, development of the company’s net asset value per share and the focus issues of the respective financial year. Other senior executives, however not the CEO, shall also be subject to a discretionary parameter. The company’s total cost for the total variable salary shall not exceed MSEK 8.9 (including social security payments).

Long-term incentive program (Long-Term Incentive LTI)

For the purpose of linking the interests of the employees with the interests of the shareholders and in order to encourage the employees’ acquisitions of shares in the company, in addition to the above-mentioned annual variable remuneration, a long-term incentive program applies to all employees in the company. The program consists of the following main components:

i. If an employee, during a certain time period and within the frames of the LTI, buys shares up to a certain amount, the company shall match this by cash payment of the same amount, compensated for the employee’s marginal tax costs, in the form of a single payment (the “Matching Amount”). The employees shall be entitled to buy shares for an amount which is in proportion to the size of the fixed basic salary. The employee shall use the Matching Amount to acquire shares in the company. These shares shall by means of agreement be kept for at least 3 years.

ii. If the requirements according to item iii. have been fulfilled, the company shall pay an additional single payment corresponding to the Matching Amount, however not compensated for the employee’s marginal tax costs (the “Performance Amount”). The employee shall use the Performance Amount (after deduction has been made for the individual’s tax) to acquire shares in the company. These shares shall by means of agreement be kept for at least 1 year.

iii. The criteria for payment of the Performance Amount is, inter alia, that the employee is still employed and that he or she has kept his or her acquired shares according to item i. during the whole time period, and that the predetermined performance goals regarding the company’s annual total revenue up until 2020 as established by the Board of Directors have been fulfilled.

iv. The total cost for the company regarding payment of the Matching Amount and the Performance Amount shall not exceed MSEK 2.2.

Other

In so far as a board member carries out work on behalf of the company in addition to the board work, a contractual agreement shall be established and market compensation for such work may be paid according to a decision of the Board. The Board shall annually review any agreements entered into.

The Board may waive the guidelines if there are special reasons for this.