The following guidelines for remuneration to senior executives shall apply to remuneration agreed upon, and to changes made to already agreed remuneration,after the guidelines have been adopted by the 2023 annual general meeting. The guidelines cover remuneration for board members, the managing director and deputy managing director as well as other persons in the company's management (group management), but not remuneration decided by the general meeting.
The board of directors shall have the right to temporarily deviate, in whole or in part, from the guidelines if in individual cases there are special reasons to do so, and a deviation is necessary to satisfy the company’s long-term interests and sustainability or to ensure the company’s financial viability. If such deviations occur, this must be reported in the remuneration report prior to the next annual general meeting. The guidelines refer to the period from the 2023 annual general meeting. Matters concerning deviations from the guidelines shall be prepared by the Remuneration Committee and decided by the board.
The guidelines’ promotion of the company’s business strategy, long-term interests and sustainability
Bure is an investment entity and a good owner. By actively and long-term building successful companies, Bure creates a good return for shareholders. The basis of Bure’s operations is to actively participate in and develop wholly-owned or partly-owned companies and operations to increase the value of these assets over time.
The board believes that the recruitment and retention of senior executives with the skills and competence to achieve established goals is critical for the successful implementation of the company’s business strategy and to safeguard the company’s long-term interests, including its sustainability. To do this,the company needs to offer competitive overall remuneration that motivates senior executives to the best of their abilities. Variable remuneration covered by these guidelines shall be based on criteria aimed at promoting the company’s business strategy and long-term interests, including its sustainability, and where the fulfilment of criteria is determined by the method set out below.
Forms of compensation etc.
Remuneration and other terms of employment for senior executives must be market-based. Total remuneration consists of basic salary, variable remuneration, pension, and other benefits. In addition, the annual general meeting may – and independently of these guidelines – decide on share or share price-related remuneration.
Fixed basic salary
The fixed basic salary for the CEO and other senior executives is reviewed annually. Fixed basic salary constitutes a maximum of 57 per cent of total remuneration excluding LTI and assuming a 50 per cent outcome of STI.
Remuneration is paid according to goals achieved for the company as a whole. Criteria are based on the outcome of a number of, mainly, quantitative parameters, compared with established targets. Quantitative parameters are attributable to the company’s share price, the company’s net asset value per share, and focus issues for each financial year. Other senior executives, but not the CEO, are also subject to a discretionary parameter. Overall, criteria must contribute to the company’s business strategy, long-term interests, and sustainability through a clear connection to these components and thus to the company’s long-term value creation. The fulfilment of criteria is determined by the company’s audited annual accounts. Remuneration may amount to a maximum of 100 per cent of fixed basic salary for the CEO and 80 per cent for other senior executives. In the event of full entitlement, remuneration may amount to a maximum of 43 per cent of total remuneration excluding LTI for the CEO and 40 per cent of total remuneration excluding LTI for other senior executives. Variable remuneration shall not be pensionable. Remuneration entitlements are prepared by the Remuneration Committee and determined by the board in conjunction of the end of the qualification period. Thereafter, compensation is paid. The company has no contractual right to reclaim compensation.
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, along-term incentive program 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 allocation of the performance shares 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 2026 have been met.
Equivalent long-term incentive programs will apply for all other Company employees.
Other benefits
Pension benefits
The agreed retirement age for the CEO and for other senior executives is 65 years. All pension benefits for senior executives are contribution-based. This means that the company pays an individually agreed contribution pension premium for senior executives. The company has no additional pension obligations.
Company cars etc.
The CEO is entitled to a company car. In addition, all senior executives are covered by standard health insurance.
Other benefits constitute a maximum of 17 per cent of total compensation excluding LTI and assuming a 50 per cent STI entitlement.
Notice period and severance pay
Senior executives’employment or assignment agreements are valid until further notice or for a specified period. The company and the CEO have a mutual notice period of 12 months in the event of termination of employment. The CEO is entitled to severance pay corresponding to 12 months’ salary in the event of termination of employment by the company. Severance pay is not paid upon retirement. For other senior executives, six months’ notice applies in the event of termination by the company. Other senior executives are not entitled to severance pay. During the notice period, current employment contracts continue with associated benefits. In cases where severance pay was to be paid, no other benefits are paid for the period after the end of the notice period.
Salary and terms of employment for employees
In preparation of the board’s proposal for the guidelines for remuneration to senior executives, company employees’ salary and terms of employment for have been considered. Information on employees’ total remuneration, the components of the remuneration and the increase and rate of remuneration over time was identified and formed part of the Remuneration Committee’s and board’s decision making in evaluating the reasonableness of the guidelines and their limitations.
Decision making process
The board shall prepare proposals for new guidelines when there is a need for significant amendments to the guidelines, and at least every four years. The board’s proposals are prepared by the board’s Remuneration Committee. The chairman of the board may be the chairman of the Remuneration Committee. Other member selected by the annual general meeting who are members of the Remuneration Committee shall be independent in relation to the company and the company management. If the board feels it more appropriate, the entire board may perform the tasks of the Remuneration Committee, provided that the board member who is a member of the company management does not participate in these tasks.
The Remuneration Committee shall, inter alia, monitor and evaluate the application of the guidelines for remuneration to senior executives decided on by the annual general meeting. When the Remuneration Committee has prepared a proposal, it is submitted to the board for decision. The CEO does not attend the board’s review of decisions in remuneration-related matters or other persons in the company management, insofar as they are affected by the matters.
If the annual general meeting decides not to adopt guidelines in conjunction with proposals for such, the board shall submit a new proposal no later than before the following annual general meeting. In such cases, compensation shall be paid in accordance with the guidelines that already apply or, if such do not exist, in accordance with company praxis.
In the preparation of these matters, external advice is used when deemed necessary.