Principles for remuneration and incentive programs

The Board proposes that the AGM approves the following guidelines regarding the remuneration of senior executives, the CEO, the deputy CEO, and other senior executives according to article 9.9 of the Swedish Companies Act, i.e. group management. These guidelines would apply to compensation agreements and to changes made to existing compensation agreements subsequent to the guidelines being adopted by the 2022 AGM. These guidelines would not apply to compensation approved at the AGM.

The Board reserves the right to temporarily waive the guidelines, partially or entirely, if specific circumstances justify doing so and if such a course of action is necessary to protect the Company’s long-term interests and sustainability, or to ensure the Company’s financial sustainability. If such divergences from the guidelines occur, they are to be presented in the compensation report for the following AGM. The guidelines would apply after the AGM 2022. Incidences concerning divergences from the guidelines shall be presented by the remuneration committee and approved by the Board.

Guidelines that promote the Company’s business strategy, long-term interests, and sustainability
Bure is an investment company and a good owner. By actively building successful companies for the long term, Bure generates good returns for shareholders. The starting point of Bure’s activities is proactive involvement and development of wholly owned or co-owned companies and activities in order to increase the value of these assets over time

The Board believes it is critical to the successful implementation of the Company’s business strategy and fulfilment of the Company’s long-term interests, including its financial sustainability, that the Company can recruit and retain senior executives with the skills and capacities to achieve set targets. To do this, the Company needs to be able to offer competitive overall compensation that incentivises senior executives to perform to the utmost of their abilities. Variable remuneration that falls under these guidelines shall be based on criteria that seek to promote the Company’s business strategy and long-term interests, including its financial sustainability, and in such a way that fulfilment of these criteria is determined by the methods outlined below.

Types of compensation
Compensation and other conditions of employment for senior executives shall be competitive. Total compensation includes basic salary, variable remuneration, pension, and various other benefits. In addition – and irrespective of these guidelines – the AGM may decide on equity or equity-related compensation.

Basic salary
The basic salaries of the CEO and other senior executives are reviewed on an annual basis. The basic salary component typically amounts to a maximum of 56 per cent of total compensation excluding LTI and assuming a 50-per cent STI yield.

Short-Term Incentive programme, (STI)
Compensation is based on the achievement of targets for the Company as a whole. Criteria are based on the result of a number of, primarily, quantitative parameters, against stated targets. Quantitative parameters relate to the Company’s share price performance, the Company’s net asset value per share and operational themes of respective financial years. Other senior executives, with the exception of the CEO, are also subject to a discretionary parameter. Overall, the criteria shall contribute to the Company’s business strategy, long-term interests, and sustainability with well-defined links to these and thus to the Company’s long-term capacity to create value. Performance related to these criteria is presented in the Company’s revised year-end financial statements. Compensation shall constitute no more than 100 per cent of basic salary for the CEO and 80 per cent for other senior executives. At full outcome, compensation may amount to a maximum of 43 per cent of the total remuneration excluding LTI for the CEO and 40 per cent of total remuneration excluding LTI for other senior executives. Variable compensation shall not be pensionable. Compensation amounts are prepared by the remuneration committee and approved by the Board once the qualification period has passed. Remuneration is then paid. The Company has no contractual right to demand the repayment of remuneration once paid.

Long-Term Incentive program (LTIP 2022)

With the aim of aligning the interests of senior executives with those of shareholders, to encourage senior executives’ acquisition of equity in the Company, and in addition to the annual variable remuneration described above, a long-term incentive programme with the following main components is offered to the Company’s senior executives:

  1. If a senior executives, during a given time period and within the auspices of LTI, buys equity up to a certain amount, the Company shall match this with a cash payment of 125 per cent of the amount, compensating the senior executive’s marginal tax liability, in the form of a one-off payment, (”the matching amount”). The senior executive shall use this amount to acquire shares in the Company. The executive is contractually obliged to hold these shares for at least three years.
  2. If the terms and conditions in point (iii). are met, the Company shall allocate performance shares free of charge.
  3. The criteria for the payment of the performance amount include that senior executives are still employed by the Company; that they have retained their acquired shares according to the stipulations of point (i). throughout the period, and that the Board has confirmed that performance targets regarding the Company’s annual total return up to 2025 have been met.

Equivalent long-term incentive programmes will apply for all other Company employees.

Other benefits

Pension benefits
The contractual retirement age for the CEO and other senior executives is 65. All pension benefits for senior executives are defined. This means that the Company pays individually agreed defined pension contributions. The Company has no additional pension liabilities.

Company car etc.
The CEO is entitled to a company car. In addition, all senior executives have standard health insurance cover.

Other benefits include a maximum 17 per cent of total remuneration excluding LTI and on the assumption of 50 per cent STI yield.

Period of notice and severance pay
Senior executives’ employment or assignment contracts shall be valid until further notice or for specific time periods. In the event of the Company terminating an employment or assignment contract, the CEO has the right to a period of notice of 12 months. The CEO is required to give a 12-month period of notice if he or she terminates their employment. The CEO is entitled to severance pay corresponding to 12 months’ salary if employment is terminated by the Company. Severance pay is not paid on retirement. For other senior executives, a six-month notice period applies in the event of termination by the Company. Other senior executives are not entitled to severance pay. During notice periods, existing employment contracts and associated benefits will continue to apply. In cases where severance pay is to be paid, no other benefits will be paid for the period after the expiry of the notice period.

Salary and conditions of employment
In preparing the Board’s proposed guidelines for remuneration of senior executives, salaries, and conditions of employment for Company employees were also considered. Details about employees’ total remuneration, compensation components, compensation increases and rates of increase over time informed the decision making of the remuneration committee and the Board in terms of evaluating the suitability of the guidelines and the limitations that flow from them.

Decision process
The Board shall present new guideline proposals when significant changes to guidelines are necessary, but at least every four years. The Board’s proposals are prepared by the Board’s remuneration committee. The Chairman of the Board may chair the remuneration committee. Other members of the remuneration committee, elected by the AGM, shall be independent of the Company and Company management. If the Board finds it more expedient to do so, the entire Board may perform the tasks of the remuneration committee, provided that Members of the Board who also have Company management roles do not participate in such tasks.

The remuneration committee shall, inter alia, follow and evaluate the implementation of the guidelines for senior executive remuneration approved by the AGM. Once the remuneration committee has prepared its proposal, it is submitted to the Board for approval. When the Board considers and approves remuneration-related matters, neither the CEO nor other members of Company management shall be present, insofar as they are subject to such matters.

If an AGM decides not to adopt guidelines on the basis of a proposal of such, the Board shall submit a new proposal no later than the subsequent AGM. In such cases, compensation shall be paid in accordance with existing guidelines or, in the absence of existing guidelines, in accordance with Company praxis.

Work on these areas is supported with external advice when deemed necessary.

Review of guidelines
A review of the guidelines for senior executives’ compensation was conducted prior to the 2022 AGM concerning the LTIP. The 2022 Annual General Meeting resolved to adopt the Board's proposal to introduce LTIP 2022 in accordance with item 18 on the agenda.