Remuneration guidelines for senior executives
At the Annual General Meeting (AGM) on May 20, 2021, the following remuneration guidelines for senior executives were adopted:
These guidelines cover the company’s CEO and other senior managers. The guidelines shall be applied to remuneration that is agreed, and any changes to remuneration that has already been agreed, after the guidelines were adopted by the 2021 AGM. The guidelines do not apply to remuneration adopted by the General Meeting. Since members of the company’s Board only receive fees decided by the General Meeting, these guidelines do not apply to the Board’s members.
How the guidelines promote the company’s business strategy, long-term interests and sustainability
The company’s business strategy is briefly as follows:
Stendörren Fastigheter is a property company with a focus on creating long-term growth and value generation by managing, developing and acquiring properties for warehousing, and light industry and, in some cases, housing in Stockholm, the Mälardalen region and other geographic markets across the Nordic region. By offering our customers the right premises for their operations, our sustainable approach creates long-term relationships that can generate high, risk-adjusted returns for our shareholders.
A successful implementation of the company’s business strategy and the safeguarding of the company’s long-term interests, including its sustainability performance, presume that the company is able to recruit and retain qualified employees. This requires that the company can offer competitive remuneration. The aim of these guidelines is that senior executives can be offered competitive total remuneration.
The company has previously established share-based incentive programs. Since they were decided by the General Meeting, they are not covered by these guidelines. For more information about earlier programs, including the outcome-specific criteria, visit www.stendorren.se/investor-relations/bolagsstyrning/incitamentsprogram/. Any future share-based incentive programs will be resolved by General Meetings.
The aim of variable cash remuneration covered by these guidelines is to promote the company’s business strategy and long-term interests, including its sustainability performance.
Forms of remuneration, and so forth
Remuneration shall be market-based and may include the following components: fixed salary, variable cash remuneration, pension benefits and other benefits. In addition, the General Meeting may – and independently of these guidelines – make decisions regarding, for example, share-based remuneration.
The Board may apply discretionary factors to decisions regarding variable cash remuneration in accordance with these guidelines. Variable cash remuneration may not exceed 200% of fixed annual salary. An assessment of the extent to which the criteria for payment of variable cash remuneration have been met shall take place annually and pertain to a period of one year.
For the CEO, pension benefits, including health insurance, shall be defined-contribution. Variable cash remuneration shall not be pensionable. Pension contributions for a defined-contribution pension shall not exceed 30% of fixed annual salary.
Pension benefits, including health insurance, for other senior executives shall be defined-contribution unless the senior executive is covered by a defined-benefit pension under mandatory collective agreement provisions. Variable cash remuneration shall not be pensionable unless otherwise stipulated by mandatory collective agreement provisions. Pension contributions for a defined-contribution pension shall not exceed 30% of fixed annual salary.
Other benefits may include life insurance, health insurance and a company car. Such benefits may not exceed 20% of fixed annual salary.
Termination of employment
Upon termination by the company, a maximum notice period of six months applies. Fixed salary during the notice period plus severance pay may not exceed an amount corresponding to fixed salary for two years for the CEO, and one year for other senior executives. Upon termination by the senior executive, a maximum notice period of six months applies.
Criteria for payment of variable cash remuneration, and so forth
The variable cash remuneration shall be linked to predetermined criteria – measurable financial and/or non-measurable non-financial. The criteria may be general and/or personal quantity or quality goals based on, for example, the company’s internal controls, budgetary controls, quality and punctuality of financial reports, implementation of new and improved IT systems, collaboration between the company’s various departments, the development of leadership skills for department heads, and the company’s overall sustainability performance. The criteria shall be designed to promote the company’s business strategy and long-term interests, including its sustainability performance by, for example, having a clear link to the business strategy or promoting the senior executive’s long-term development. The Board shall be able, in accordance with the law or agreements and subject to any restrictions that may follow thereof, to recover some or all of the variable remuneration that has been paid on incorrect grounds.
The Remuneration Committee is responsible for the assessment with regard to variable cash remuneration paid to the CEO. Regarding variable cash remuneration of other senior executives, the Remuneration Committee and the CEO are jointly responsible for the assessment. The Remuneration Committee then submits the remuneration proposal to the Board for a decision.
Salary and terms of employment for employees
When preparing the Board’s proposal for these remuneration guidelines, the salaries and terms of employment for the company’s employees have been taken into account in that information about employees’ total remuneration, remuneration components, and the increase and rate of increase in remuneration over time have formed part of the decision-making basis for the Remuneration Committee and the Board when evaluating the reasonableness of the guidelines and the limitations resulting thereof.
Decision-making process for determining, overseeing and implementing the guidelines
The Board has established a Remuneration Committee. The role of this Committee includes preparing the Board’s proposal on remuneration guidelines for senior executives. The Board shall prepare a proposal for new guidelines at least every four years and present the proposal to the AGM for a decision. The guidelines shall apply until new guidelines have been adopted by the General Meeting. The Remuneration Committee shall also monitor and evaluate variable remuneration programs for senior executives, the application of remuneration guidelines for senior executives, and the applicable remuneration structures and levels in the company. The Remuneration Committee’s members are independent of the company and the company’s senior executives. When the Board addresses and makes decisions on matters related to remuneration, neither the CEO nor other senior executives are present, to the extent they are affected by these matters.
Departure from the guidelines
The Board may decide to make a temporary departure from the guidelines, in whole or in part, if an alternative can be justified in particular circumstances and a departure is necessary for meeting the company’s long-term interests, including its sustainability performance, or to secure the financial viability of the company. As described above, the role of the Remuneration Committee includes preparing the Board’s decisions on matters related to remuneration, which includes decisions on non-compliance with the guidelines.
Description of significant changes to the guidelines
The Remuneration Committee and the Board have assessed that it is appropriate for the company that senior executives may be evaluated on the basis of, and that variable remuneration may be linked to, non-financial criteria that are not measurable. The above remuneration guidelines have therefore been updated accordingly.