Guidelines for remuneration to executive management
At the annual general meeting on 22 March 2022, it was resolved to adopt guidelines for remuneration to the executive management in engcon. The guidelines also include remuneration to board members of the Company, to the extent remuneration is received outside of their board duties. The renumeration shall be on market terms and may consist of fixed cash salary, variable cash remuneration, pension benefits and other benefits. Additionally, the general meeting may – irrespective of the guidelines – resolve on, among other things, share or share price-related remuneration. Fixed salary and variable remuneration shall be proportionate to the responsibilities and powers of the senior executive.
The fixed salary shall consist of a fixed annual cash salary. The fixed salary shall be in line with market- and determined taking into account responsibility, expertise and performance. The fixed salary is reviewed annually.
Variable cash remuneration
It must be possible to measure the fulfilment of criteria for the payment of variable cash remuneration over a period of a year. The variable cash remuneration may not exceed 50 per cent of the total fixed annual cash salary.
The variable cash remuneration shall be linked to predetermined and measurable criteria which can be financial or non-financial. They can also consist of individually adapted quantitative or qualitative targets. The criteria must be designed so that they contribute to the Company’s business strategy and long-term interests, including its sustainability, for example, by being clearly linked to the business strategy or promoting the long-term development of the executive management.
When the measurement period for the fulfilment of criteria for the payment of variable cash remuneration is completed, the extent to which the criteria have been met shall be evaluated/determined. The board, with support from the remuneration committee, is responsible for the evaluation of variable cash remuneration to the CEO. With regard to variable cash remuneration to other senior executives, the CEO is responsible for the evaluation, supported by the remuneration committee. For financial targets, the evaluations shall be based on the latest financial information published by the Company.
The criteria for variable cash remuneration shall be designed to allow the board, in exceptional economic circumstances, to limit or waive the payment of variable cash remuneration where such remuneration would be deemed unreasonable and inconsistent with the Company’s responsibilities to its shareholders, employees and other stakeholders. Furthermore, it must be possible to limit or waive the payment of variable cash remuneration if the board considers it appropriate for other reasons. The board of directors shall also have the right to recover already paid variable cash remuneration if it later turns out that the executive management has violated the Company’s values, policies, standards or instructions.
Pension and insurance
Pension benefits shall solely contain defined contribution pension benefits, unless the executive is subject to defined benefit pension under applicable collective agreement provisions. The defined contribution pension shall have a total maximum of 35 percent of the fixed annual cash salary. The CEO’s variable cash remuneration shall not qualify for pension benefits. Any other executive’s variable cash remuneration shall qualify for pension benefits unless otherwise stated by the executive’s individual agreement.
Other benefits may include, for example, life insurance, health insurance and company car benefit. Such benefits may amount to not more than 15 per cent of the fixed annual cash salary.
For employments governed by rules other than Swedish, pension benefits and other benefits may be duly adjusted compliance with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines.
Executive management seconded abroad to or from Sweden may receive additional remuneration and other benefits to the extent that is reasonable in light of the particular circumstances of the arrangement abroad, whereby the overall purpose of the guidelines shall be met as far as possible. Such benefits may not in total exceed 35 per cent of the fixed annual cash salary.
Termination of employment
In the event of termination of employment by the Company, the notice period may not exceed 12 months. Fixed cash salary during the notice period and severance pay may not, together, exceed an amount corresponding to the fixed cash salary for 24 months. In the event of termination by the executive management, the notice period may not exceed six months, without the right to severance pay. In addition, remuneration may be paid for a commitment to restrict competition. Such remuneration shall compensate for loss of income and shall only be payable to the extent that the formerly employed senior executive is not entitled to severance pay.
Derogation from the guidelines
The board of directors may temporarily resolve to derogate from the guidelines, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the Company’s long-term interests, including its sustainability, or to ensure the Company’s financial viability.