The Board's proposal on remuneration
Proposal for principles for remuneration of senior executives to be recommended to the Annual General Meeting
The Board of Directors’ proposal for guidelines for remuneration of senior executives to apply for the period up to the next annual general meeting will be adopted at the 2011 Annual General Meeting.
The proposal is designed to ensure that Seco Tools, from a global perspective, is able to offer market-based compensation intended to attract and retain qualified staff for Seco Tools executive management.
- Issues pertaining to remuneration of executive management are prepared by the Remuneration Committee and submitted annually to the Board of Directors for resolution. The total remuneration includes fixed salary, as well as variable salary comprising an annual portion and a long-term portion. In addition, pension and other customary benefits are also included.
- The fixed salary, which is individual and differentiated based on the individual’s responsibilities and performance, is based on market-based principles and subject to annual review.
- The variable portion is based on the attainment of predetermined targets, which are related to the company’s earnings trend and the attainment of other key objectives. For the executive management, the annual variable portion may amount to a maximum of 30-60 per cent of the fixed salary and the long-term portion to a maximum of 20-40 per cent of the fixed salary.
- In the event that a senior executive acquires shares in Seco Tools AB, this individual can be offered compensation corresponding to the net interest expense for up to 10,000 shares during the period the shares are held.
- The pension system for the President entails a premium-based pension comprising 35 per cent of the fixed salary. The retirement age is 62-65 years. The remaining members of executive management are connected to the ITP plan, with the retirement age of 62-65 years. In addition, a supplementary premium-based pension may be paid.
- If termination of employment is initiated by Seco Tools, and termination is not due to negligence, severance pay is provided. Any income from employment is deducted from the termination benefits, which correspond to between 12 and 18 monthly salaries for individuals under the age of 55 years and between 18 and 24 monthly salaries for individuals over the age of 55 years.
- The Board shall have the right to deviate from the guidelines adopted by the Annual General Meeting when there is special reason in an individual case. The senior executives covered by the proposal include the President and the other members of the Group Executive Management.
Fagersta, 24 February 2011