Senior managers means the Group management and the Board of Directors. The guidelines also apply to prospective remuneration to Board members in addition to the board fee.
The guidelines apply to remuneration agreed to after the Annual General Meeting 2020 and to amendments to already agreed remunerations which are made thereafter. These guidelines do not apply to remuneration resolved by the General Meeting.
The AGM 2020 decided on the following guidelines for remunerating senior managers:
The guidelines’ promotion of the Company’s business, long-term interests and sustainability
In order to successfully act on the market and safeguard the Company’s long-term interests, including its sustainability, it is required that NOTE is able to recruit and retain qualified employees. The total remuneration to the Company’s employees shall therefore be marketable and competitive and be related to responsibility and competence.
Forms of remuneration, etc.
The remuneration may consist of the following components: fixed salary, variable remuneration in accordance with separate agreements, pension and other benefits. The General Meeting may in addition – irrespective of these guidelines – resolve on, for instance share or share price-based remuneration.
The fixed salary shall consist of fixed cash salary and shall be reviewed yearly. The fixed salary shall reflect the demands of the position held regarding competence, responsibility, complexity and in which way the remuneration promotes the business targets. The fixed salary shall also reflect the performance of the executive and is therefore individual and differentiated.
In addition to the fixed salary, the Chief Executive Officer and other senior executives may, in accordance with separate agreements, receive variable remuneration upon fulfilment of the predetermined criteria. The variable remuneration shall be linked to one or several predetermined and measurable targets resolved by the Board of Directors. The outcome shall be linked to the fulfilment of targets of financial nature, such as earnings performance, growth and cash-flow, and if necessary, individually measurable targets and qualitative targets.
The targets are linking the managements remuneration to the Company’s result and sustainability, and therefore promote the accomplishment of the Company’s business strategy, long term interests and competitiveness. The criteria shall be valid for one financial year at a time. The fulfillment of the criteria for remuneration shall be measured yearly. In regard to financial targets, the assessment shall be based on the latest financial information made public by the Company. The criteria for variable remuneration is formulated in a way that allows the Board to, in case of exceptional financial circumstances, limit or abstain from payment of variable remuneration if such a measure is deemed reasonable.
Additional variable cash remuneration may be paid under exceptional circumstances if to reward extraordinary work contributions beyond the persons ordinary assignment. A decision regarding such remuneration shall be resolved by the Board after proposal from the Remuneration Committee. The total variable remuneration during a calendar year may not amount to more than 100% of the fixed salary.
Pension benefits, including health insurance, for the Chief Executive Officer and other senior executives shall be fixed and the premiums may not exceed 30% of the fixed salary. Variable remuneration shall not contribute to the pension.
Other benefits, which may include car benefit, travel benefit and health care insurance, shall be marketable and constitute a limited share of the total remuneration.
Termination of employment
The notice period for termination for the Chief Executive Officer and other senior executives shall be 6 months when termination is made by the senior executive. When termination is made by the Company, the notice period shall not exceed 12 months. When termination is made by the Company, dismissal pay and severance pay shall not all in all exceed an amount equal to 24 months fixed salary.
Additional remuneration may be paid for non-compete undertakings. Such remuneration shall compensate for loss of income and shall only be paid in so far as the previously employed executive is not entitled to severance pay. The remuneration may not exceed 100% of the fixed salary at the time of termination of employment and be paid during the time the non-compete undertaking applies, however not for more than 24 months following termination of employment.
Remuneration to the Board of Directors
The Board of Directors of NOTE, elected by the General Meeting, may under certain circumstances and during a limited period be paid for services within their field of competence which is not board work. The remuneration for such services (including services conducted by a company wholly owned by the Board member) shall be marketable and the services shall contribute to NOTE’s business and long-term interest, including sustainability.
Salary and employment conditions for employees
In the drafting process of the Board of Directors’ proposal of these guidelines, the salary and employment terms of the Company’s employees have been taken into account by the inclusion of information on the employees’ total income, the components of the remuneration and the remunerations increase and growth rate over time in the Remuneration Committee’s and the Board of Directors’ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.
The Board of Directors has established a Remuneration Committee, which shall, among other tasks, prepare principles for remuneration to the senior executives and the Board of Directors’ proposal on guidelines for remuneration to senior executives. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and present it to the General Meeting. The guidelines shall be in force until new guidelines are adopted by a General Meeting.
The Remuneration Committee shall also monitor and evaluate programmes for variable remuneration for the executives, the application of the guidelines for salary and other remuneration to the executives as well as the current remuneration structures and compensation levels in the Company. Remuneration to the Chief Executive Officer shall be resolved by the Board of Directors within the scope of the approved guidelines after processing and recommendation from the Remuneration Committee. Remuneration to other senior executives shall be resolved by the Chief Executive Officer within the scope of the approved guidelines and after reconciliation with the Remuneration Committee. The Chief Executive Officer or other senior executives do not participate in the Board of Directors’ processing of, and resolutions regarding, remuneration-related matters if they are affected by such matters.
Deviations from the guidelines
The Board of Directors may temporarily resolve to deviate from the guidelines, in whole or in part, if in a specific case there is special cause for the deviation and a deviation is necessary to serve the Company’s long-term interests, including its sustainability, or to ensure the Company’s financial viability.
Regarding employments which are subject to other legislation than Swedish legislation, appropriate adjustments regarding pension benefits and other benefits may be done in order to comply with mandatory statues or local customs, whereby these guidelines’ comprehensive purpose shall be catered as far as practically possible.
Information regarding outstanding remunerations
On 10 June 2019, new rules were implemented in the Swedish Companies Act, inter alia regarding the wording of the guidelines for remuneration. According to the transitional provisions, the proposal for guidelines for remuneration shall contain information regarding outstanding remuneration. There are no outstanding remunerations to senior executives save for the obligation to continuously pay remuneration such as fixed salary, pension and other benefits. For further information regarding remuneration to senior executives, see note 8 in the Annual Report.