Remuneration

Trelleborg details all aspects of remuneration – from guiding principles to breakdowns of remuneration to Group Management and the Board of Directors – in order to ensure a high degree of transparency for shareholders and other interested parties.

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Principles for Remuneration

The following are the principles for remuneration of senior executives adopted by the Annual General Meeting:
Trelleborg will offer market-based terms of employment that enable the company to recruit, develop and retain senior executives.
The remuneration structure will comprise fixed and variable salary, pension and other remuneration, which together form the individual’s total remuneration package.
Trelleborg continuously gathers and evaluates information on market-based remuneration levels for relevant industries and markets.
Principles for remuneration may vary depending on local conditions.
The remuneration structure will be based on such factors as position, expertise, experience and performance.

Senior executives comprise the President and other members of Group Management. The principles are supplemented by a policy for benefits for senior executives as well as a global Remuneration Policy covering all managers and senior salaried employees. In 2014, total remuneration of Group Management amounted to SEK 76,898,000 (75,203,000), excluding pension premiums, and SEK 97,629,000 (91,811,000), including pension premiums.

Annual variable salary Variable salary is dependent on the achievement of certain performance indicators. The 2014 targets ertained to the Group’s profit before tax and the Group’s operating cash flow, both excluding the effect of structural changes approved by the Board and the profit effect from TrelleborgVibracoustic. In addition, a minor portion of the annual variable salary of the President and a few senior executives was based on the operating profit in TrelleborgVibracoustic. For the business areas, other operating key figures also served as targets for annual variable salary. Annual variable salary does not constitute pensionable income and does not form the basis of vacation pay. The President’s annual variable salary can be a maximum of 65 percent of fixed salary and for other senior executives a maximum of 30-60 percent of fixed salary. 

Other benefits
The President and other senior executives have the possibility of having, primarily, a company car and medical expenses insurance.

Pension
The pension agreements comprise defined-contribution schemes. For the President and other senior executives, the premium can vary between 20 and 45 percent of the fixed salary, where this is legally possible. For the President, the premium is computed as 40 percent of the fixed salary. Pensionable age for the President is 65; however, both the company and the President have the right, without special motivation, to request early retirement from the age of 60, with a mutual six-month notice of termination. If the President enters early retirement, the employment agreement and pension agreement are rendered invalid. Some of the senior executives have agreements specifying mutual rights to request early retirement from the age of 60. In this case, compensation amounting to 60 percent of fixed annual salary is paid until the age of 65, after which the regular retirement pension payments become effective.

Severance pay
For the President, a period of notice of 24 months applies when termination of employment is initiated by the company. The period of notice when termination of employment is initiated by the President is six months. Fixed salary is payable during the period f notice. Certain senior executives have extended notice of termination periods when initiated by the company, normally 12, 18 or 24 months. The period of notice from the senior executive is six months.

Long-term incentive program

Since 2005, the Board of Directors has annually resolved on a long-term incentive program for the President and for certain senior executives considered to exercise a significant influence on the Trelleborg Group’s earnings per share. These programsare ongoing, three-year programs. The Board determines annually whether to instigate new programs and, if so, the scope, objective and participants of such new programs. The incentive programs are a cash-based supplement to the annual variable salaries, provided that the executive has not terminated his employment as per December 31 in the year in which the program ends.

Taking notes with Trelleborg pen
Purpose
The incentive programs are directional and have long-term content. The aim is to increase value for the Group’s shareholders by promoting and retainingthe commitment of senior executives to the Group’s development.

Target figures
The target value for the incentive programs is an annual improvement of 10 percent in the Trelleborg group’s earnings per share. This target excludes the items affecting comparability attributable to the Trelleborg Group and TrelleborgVibracoustic and the impact of any share buyback programs. The outcome for 2014 was earnings per share of sek 9.23. For the current programs, the Board has established a target of sek 6.02 in earnings per share for 2012 and a target of sek 6.08 for 2013, with the upper cap for payments for all programs set at 25 percent of the maximum annual variable salary per program per year. For 2014, the target figure used the total for 2013 as a base, that is, sek 7.56. For this program, the upper cap for payment is 33.3 percent of the maximum annual variable salary.

Outcome and payment
The result is calculated annually and accumulated over the three-year period and potential payments are made in the first quarter of the year after the program expires. A payment was made in the first quarter of 2014 for the program approved in 2011. For the program approved for 2012, payment will be made in the first quarter of 2015, for the program approved for 2013, payment will be made in the first quarter of 2016, and for the program approved for 2014, payment will be made in the first quarter of 2017. The outcome does not constitute pensionable income and does not form the basis of vacation pay. In 2014, the Group’s earnings were charged with sek 34,924,000 (27,012,000) and additional payroll overheads of sek 8,172,000 (6,370,000).

Other incentive programs
The Group has no ongoing convertible debenture or warrant programs at the present time.

Remuneration to the Group Management 2014

 

SEK 000s Fixed salary Annual variable salary Incentive-program* Other Benefits Total  Pension Total including pension

President 2014

9,712**

5,655

4,453

161

19,981

3,718

23,699

2013 9,177 5,655 4,390 158 19,380  3,538 22,918
Group Management, other (10 persons)** 2014 32,035 12,390 11,127  1,365  56,917  17,013  73,930 
2013 30,172   13,301  11,040  1,390  55,823  13,070  68,893
Total 2014 41,747 18,045 15,580  1,526  76,898 20,731  97,629 
Total 2013 39,349 18,956  15,430  1,468  75,203  16,608  91,811 
 

*) Expensed 2014.
**) Of this amount, fixed salary represented SEK 9,135,000 with the remainder mainly consisting of a change in vacation pay liability. 

Total remuneration

In 2014, total remuneration of Group Management amounted to sek 76,898,000 (75,203,000), excluding pension premiums, and sek 97,629,000 (91,811,000), including pension premiums. 

Remuneration to the Board of Directors

     2014*     2013*  

TSEK

Board  Committee  Total  Board

Committee

Total

Sören Mellstig  1,150   100 1,250  1,100 150  1,250 
Hans Biörck  435 200  635  420 150  570 
Jan Carlson 435  50  485  420  420 
Claes Lindqvist  435 100  535  420  150  570 
Peter Nilsson - - 
Bo Risberg  435 150  585  420  100  520 
Nina Udnes Tronstad  435 435  420    420 
Heléne Vibbleus  435 150  585  420  150  570 
Göran Andersson - -
Peter Larsson -
Mikael Nilsson - -
Ingemar Thörn - - 
 

* Remuneration paid to the Board of Directors for the period May 2013 – April 2014. The fees paid to the membersof the Board of Directors elected by the Annual General Meeting are approved by the Annual General Meeting based on the proposals of the Nomination Committee. For the 2013 calender year, remuneration was paid as per Note 3 in the Annual Report of 2013. Remuneration is not paid to members of the Finance Committee. No consulting fees were paid to Board members. Remuneration is not paid to executive Board members. Remuneration excludes travel allowances.

 

Related documents

Principles of remuneration and other conditions of employment for senior executives

Nomination Committee’s reasoned statement regarding proposals for the Board  

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