Remuneration to the Members of the Board of Directors

It was resolved at the Annual General Meeting on May 16 2018, that until the end of the next AGM 2018, the fee to directors will be paid in SEK 600,000 for the Chairman of the Board and SEK 300,000 each for other directors elected at the AGM. In addition, SEK 100,000 is payable to the chair of the audit committee and SEK 75,000 to other members of the audit committee, SEK 70,000 to the chair of the remuneration committee, and SEK 50,000 to other members of the remuneration committee.

It was resolved at the meeting that fees would be paid to the auditor in accordance with approved invoices.

Guidelines for Remuneration to the CEO and other Senior Executives

Pursuant to the Swedish Companies Act, the Board of Directors is required to propose to the annual general meeting guidelines for remuneration of the Chief Executive Officer and other Senior Executives. Such guidelines adopted by the annual general meeting are only applicable to new employment agreements entered into between the Company and the respective Senior Executives, and therefore employment agreements may exist that do not fully conform to the guidelines currently in force.

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The basic principle is that remuneration and other terms of employment shall be in line with market conditions and be competitive. The Alimak Group takes into account both global remuneration practices and practice in the home country of each member of senior management. The total remuneration of the senior management should consist of basic salary, variable components in the form of annual and long-term variable remuneration, other benefits and pension. The basic salary should be competitive and reflect responsibility and performance.

All Senior Executives may, from time to time, be offered cash bonuses. In addition, the annual general meeting may resolve to offer long-term incentive programs such as share and share price-related incentive programs. These incentive programs shall be intended to contribute to long-term value growth and provide a shared interest in value growth for shareholders and employees.

Matters of remuneration to the Chief Executive Officer and to other Senior Executives shall be prepared by the Compensation Committee and be resolved by the Board of Directors.

The Board of Directors may deviate from the guidelines in certain cases if there are particular reasons for doing so.

Remuneration financial year 2017

The table below presents an overview of remuneration to the Board of Directors, the Chief Executive Officer and other members of Group Management for the 2017 financial year.

Fee Fixed salary Variable salary Pension Other benefits Total (MSEK)
Members of the Board of Directors 2.5 2.5
President and CEO 4.2 3.4 1.8 9.4
Other members of Group Management 25.3 6.0 5.3 1.1 37.7

Performance-based stock savings program for senior executives (LTI 2018)

The 2018 annual general meeting has resolved to adopt a performance-based stock savings program for senior executives, LTI 2018. The duration of the program is about three years and will be offered to 50 senior executives and key employees within the Alimak Group.

In order to participate in the program, a personal investment in Alimak-shares is required. Each acquired Alimak-share gives the participant a right to, after a period of three years, be allotted a number of shares, without any payment of consideration, provided that certain performance targets on earnings per share have been reached.

The maximum number of Alimak-shares which may be allotted under LTI 2018 is 73,500, corresponding to approximately 0.14 per cent the shares in the company. The maximum profit per allotted share for the participants is limited to 300 percent of the average share price when LTI 2018 is launched.

Assuming complete fulfillment of the performance target and that the share price reaches the maximum SEK 560 (i.e. a 300 per cent gain on an assumed share price of SEK 140 when LTI 2018 is launched), the maximum costs for LTI 2018, including employer payroll taxes, will total approximately SEK 23.3 million which corresponds to approximately SEK 7.8 million on an annual basis. If under the same conditions only 50 per cent of the performance target is reached, the costs for LTI 2018, including employer payroll taxes, will total approximately SEK 16.8 million, which corresponds to SEK 5.6 million on an annual basis.

Current Employment Agreements for the CEO, Group Management and other Senior Executives

Remuneration to the Chief Executive Officer and to other members of Group Management consists of base salary, variable salary, other benefits and pensions. The variable salary generally amounts of 40% to 70% of the annual base salary and is linked to the performance of the Company.

For a majority of the members of the Group Management, a notice period of six to 12 months applies if the employment agreement is terminated by the Company. Four of the Group Management members and Senior Executives are entitled to severance pay (during a period of 12 to 18 months). The severance pay of the Chief Executive Officer corresponds to 12 months’ base salary.

Information regarding pension commitments is set out in the Company’s audited consolidated financial statements for the year ended December 31, 2017, note 6.