Remuneration to the Board of Directors
At the Annual General Meeting 2023, fees totalling SEK 4,422,500 were resolved and allocated as follows: SEK 1,280,000 to the Chairman of the Board, SEK 515,000 to each of the other elected Board members and SEK 26,250 to each of the employee representatives.
The fee to the chairman of the Audit Committee shall amount to SEK 200,000 and that the fee to each of the other members shall amount to SEK 100,000.
The fee to the chairman of the Remuneration Committee shall amount to SEK 110,000 and that the fee to each of the other members shall amount to SEK 55,000.
The total fee for the services of the Audit Committee and the Remuneration Committee shall not exceed SEK 565,000.
At the 2021 Annual General Meeting, guidelines for the remuneration of senior executives were established. The objective of the guidelines is that remuneration to senior executives shall, considering the industry in which the Company operates and the area of responsibility of each executive, be competitive and enable the recruitment of new executives as well as to motivate and retain senior executives.
The guidelines’ promotion of the Company’s business strategy, long-term interests and sustainability
Lindab’s business strategy is founded on the Company’s internal strengths and unique opportunities to harness global trends and is in brief:
To propel our position on all markets with the aid of our strong distribution network, our wide and increasingly complete product offering and our close relationships with customers. To create higher value through our supply chain, from purchasing to distribution, by simplifying, rationalising, innovating and having a customer-oriented holistic focus. To generate ideas on the cutting edge and for continuous improvement that will ensure future growth and profitability through Lindab’s long-term innovative culture, strong leadership and brand.
For additional information about the Company’s business strategy, see the Strategi page>>
To successfully implement the Company’s business strategy and sustainability agenda in the long and short term, the Company must be able to recruit and retain qualified senior executives. An important component is being able to offer a competitive total remuneration, as enabled by these guidelines.
The variable cash remuneration covered by these guidelines shall aim at promoting the business strategy and long-term interests of the Company.
Remuneration components and other terms for senior executives
The total remuneration shall be on market terms and may consist of the following components: fixed cash salary, variable cash remuneration, pension benefits and other benefits. In addition to what is determined by the guidelines, the AGM may resolve on, among other things, share-related or share price-related remuneration.
The qualification period for the criteria for awarding variable cash remuneration shall be measured over a period of one or several years. The variable cash remuneration may not exceed 130% for the CEO and 100% for other senior executives during the measurement period for such criteria.
For all company senior executives (who are not included in the collectively bargained pension benefit, ITP), a pension premium on the fixed cash salary may not exceed 30%. Variable cash remuneration shall not qualify for pension benefits.
Other benefits may include, for example, life insurance, medical insurance (Sw: sjukvårdsförsäkring) and company cars. Premiums and other associated costs relating to such benefits may not collectively exceed 10% of the fixed cash salary. For senior executives acting in another country, pension benefits and other benefits are to be regulated according to established or mandatory local praxis, and any adjustments to these must remain within the framework of these guidelines to the greatest extent possible.
Termination of employment
For senior executives terminated at the Company's initiative, a maximum notice period of 12 months applies. A notice period of maximum six months applies when termination is made by the executive.
Criteria for awarding variable cash remuneration
Variable cash remuneration shall be linked to predetermined and measurable criteria which may be financial or non-financial in nature but that are clearly in line with the Company's predefined financial or qualitative targets. In addition, they may also be individualized, quantitative or qualitative objectives. The criteria shall be designed so as to promote the company’s business strategy and long-term interests.
When the qualification period for the criteria for awarding variable cash remuneration has ended, the outcome will be assessed. The outcome assessment is managed in accordance with the grandfather principle. The assessment is based on financial targets as per the Company's most recent published financial information.
The possibility of reclaiming variable salary is determined by the terms and conditions that apply for the program at the time.
Salary and employment conditions for employees
In preparing and applying these guidelines, the Remuneration Committee and the Board consider the salary and terms of employment of the Company's other employees, which in turn are affected by general market conditions and internal factors that affect the Company's target fulfillment. The Remuneration Committee regularly consults with the CEO and HR Director to stay informed about other employees' salaries and other terms.
The decision-making process to determine, review and implement the guidelines
The Board’s established remuneration committee is tasked with preparing the Board’s decision to propose guidelines for executive remuneration. The Board shall prepare a proposal for new guidelines at least every fourth year and submit it to the AGM. Adopted guidelines shall be in force until new guidelines are adopted by the AGM.
In addition, the remuneration committee shall monitor and evaluate programs for variable remuneration for the Company's executives as well as the application of the guidelines with regard to compensation levels and structures. The members of the executive management do not participate in the Board’s processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters. The Board shall annually draw up a remuneration report which shall be presented to the Annual General Meeting for approval.
Derogation from the guidelines
The Board 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. As set out above, the remuneration committee’s tasks include preparing the Board’s resolutions in remuneration-related matters. This includes any resolutions to derogate from the guidelines.
Call option plan
At the Annaul General Meeting 2023, it was established to introduce a call option plan for senior executives and certain key employees in the Lindab Group (the "Call Option Plan"). In essence, the program is identical to the programs from 2017, 2018, 2019, 2020, 2021 och 2022.
The objective of the plan, and the reason for deviating from the shareholders' preferential rights, is to strengthen the link between the work of senior executives and the creation of shareholder value. By those means, it is considered that there will be an increased alignment of interests between the senior executives and the shareholders of Lindab International AB ("Lindab").
1. Number of call options, participants and allotment of call options
Lindab may issue up to 275,000 call options under the Call Option Plan. Senior executives and certain key employees within the Lindab Group shall have the right to participate in the Call Option Plan and shall be divided into three different categories:
Lindab's CEO shall have the right to acquire up to 100,000 call options. The remaining members of Lindab's Group Management Team (approx. 8 persons), shall have the right to acquire up to 25,000 call options each. Significant executives outside group management are awarded a maximum of 10,000 call options per person. The total number of persons offered an award, including group management, will amount to a maximum of 20 persons. A person who is not employed by the Lindab Group at the time of the Annual General Meeting but will commence their employment within the Lindab Group no later than 31 August 2023 shall be entitled to participate in the Call Option Plan.
The call options shall be freely transferable but subject to an agreed right of first refusal in favour of Lindab to repurchase the call options at market value.
Assignment of call options to employees outside of Sweden is dependent on tax effects, market assumptions and restrictions in certain jurisdictions, and that the Board assesses that the assignment of call options outside of Sweden can be executed with reasonable costs and reasonable administrative efforts.
The participant is responsible for any tax consequences, possible financial support for acquiring call options or underlying shares, and for other practical handling of the call options.
2. Acquisition of call options
Acquisition of call options shall take place during an application period as soon as practically and legally possible after the Annual General Meeting. The price shall correspond to market value, calculated by an external appraiser based on the so called Black & Scholes-formula.
3. Time and price for acquisition of shares
Each call option shall entitle to acquisition of one (1) share in Lindab. The exercise price will be 119 per cent of the average volume-weighted price paid for Lindab's share on Nasdaq Stockholm during the period May 12 - May 26, 2023. Acquisition of shares in Lindab by exercise of call options may be made from and including the day after Lindab publishes the interim report for the period 1 January-30 June 2026, at 10 August 2026 the earliest until and including 31 August 2026.
The number of shares that the call options entitle to, and the exercise price may be recalculated based on, among other things, extraordinary dividends paid, bonus issues, share splits or reverse share splits, rights issues or certain reductions of the share capital or similar actions.
4. Delivery of shares
Lindab owns 2,200,838 of its own shares of which 632,000 are subscribed to previous call option programs. The Board's proposal means that the Annual General Meeting approves that Lindab, with deviation from the shareholders’ preferential rights to the holders of the call options transfer up to 275,000 of its own shares at the determined exercise price in connection with a possible exercise of the call options (subject to any recalculation).
5. Costs and effects on key ratios etc.
The market value of the call options is SEK 18.50 per call option, according to a preliminary valuation. The preliminary valuation is based on a market value of the underlying share of SEK 153.901 and an assumed exercise price of SEK 183.10 per share. The Black & Scholes-formula has been used for the valuation under the assumption of a risk-free interest rate of 2,57 per cent, a volatility of 28.5 per cent and a yield of 3.5 per cent. Lindab has no other costs for the Call Option Plan than administrative costs regarding advisors etc. in connection with the preparation of documentation for the resolution and for resolving on the issue of the call options etc.
If all the proposed 275,000 call options are acquired and exercised for acquisition of shares, these will constitute approx. 0.35 per cent of the current total number of shares and votes in Lindab. Transfer of repurchased own shares will have the effect that shares which previously could not be represented at the Annual General Meeting or entitle to dividend can after the transfer be represented at the Annual General Meeting and will entitle to dividend.
6. The preparation of the proposal
The Call Option Plan has been prepared by the remuneration committee of the Board and has been discussed at Board meetings during the spring 2023.
7. Other incentive plans in Lindab
Lindab has three previous outstanding option-based incentive programs decided at the Annual General Meetings 2020, 2021 and 2022. Further information is available in the Lindab Annual Reports of 2021 and 2022 and on Lindab's website www.lindabgroup.com. Long-term variable remuneration in cash in Lindab follows from the proposal regarding guidelines for remuneration to senior executives.
8. Special authorization for the CEO
The CEO of Lindab is authorized to make such minor adjustments to the resolution by the Annual General Meeting that may be required for registration with Euroclear Sweden AB.
9. The Board's proposed resolution
Referring to the description above, the Board proposes that the Annual General Meeting resolves on the Call Option Plan.
10. Majority requirements
A resolution on the Call Option Plan in accordance with the Board's proposal is valid if it is supported by shareholders representing more than nine tenths of the votes cast and the shares represented at the Annual General Meeting.
Remuneration to the auditors
The auditors’ fees to the company’s accounting firm, Deloitte AB, shall be paid in accordance with approved account.
For additional information on the company´s remuneration, see the Annual Report 2022 on the page Financial reports >>.