Guidelines for remuneration to senior executives
General
The guidelines shall apply to remuneration that has been agreed upon or to changes in already agreed remunerations after the guidelines have been adopted by the annual general meeting. The guidelines do not apply to remunerations that has been resolved by the general meeting and any remuneration through shares, warrants, convertibles, or other share-related instruments such as synthetic options or employ stock options shall therefore be resolved by the general meeting.
These guidelines apply to the CEO and other senior executives in the company group and all other remuneration to members of the board except fees to the board of directors.
Regarding employment conditions that are governed by rules other than Swedish, appropriate adjustments may be made to comply with such mandatory rules or established local practice, whereby the general objectives of these guidelines shall, to the extent possible, be met.
The guidelines promotion of the Company’s business strategy, long-term interest and sustainability
The guidelines shall contribute to the possibility to create conditions for the Company to retain and recruit competent and committed employees to successfully implement the Company’s business strategy and meet the Company’s long-term interests, including sustainability. The guidelines shall further stimulate an increased interest in the business and earnings development, and to increase the motivation for the senior executives and increase positive cohesion in the Company. The Guidelines shall also contribute to good ethics and corporate culture.
To achieve the Company’s business strategy, the total annual remuneration must be market based and competitive in the employment market in which the senior executive is situated and taking into account the individual’s qualifications and experience and that exceptional performance must be reflected in the total remuneration.
For more information regarding the Company’s business strategy, please see www.biovica.com.
The forms of remuneration etc.
The remuneration to the senior executives in the Company shall comprise of fixed salary, possible variable cash remuneration and other customary benefits and pension payments. The total remuneration, including pension benefits, shall, on a yearly basis, be in line with market practice and competitive on the labor market where the senior executive is based and consider the individual qualifications and experiences of the senior executive as well as reflecting any notable achievements. The fixed salary shall be revised on a yearly basis.
Fixed salary
The senior executives’ fixed salary is to be competitive and based on the individual senior executive’s competences, responsibilities, and performance.
Variable remuneration
The senior executives may receive variable remuneration in addition to fixed salaries. Variable cash remuneration is conditional upon the fulfillment of defined and measurable goals which should be determined by results. The variable cash remuneration should at most amount to 50 percent of the annual fixed salary for the respective senior executive.
The targets for receiving variable cash remuneration may include share based or financial targets, either on group or section level, operative goals and goals for sustainability and social responsibility, employee engagement or customer satisfaction. These targets are to be established and documented annually. The Company has established financial targets and KPIs in relation strategic and business critical initiatives and projects which ensures alignment with the business plan and business strategy for a continued sustainable business. The variable remuneration shall also be designed with the aim of achieving greater community of interest between the participating senior executive and the Company’s shareholders to contribute to the Company’s long-term interest.
Cash based variable remuneration shall be calculated proportionally during the vesting year and requires continued employment and no notice of termination at the fiscal year end. Terms for variable cash remuneration should be designed so that the board of directors may limit or omit payment of variable cash remuneration, provided that exceptional economic circumstances are at hand or if it motivated because of any other reasons, if the board of directors finds the payments unreasonable and incompatible with the Company’s responsible in relation to its shareholders. The board of directors shall also have the right to pay variable remuneration on individual level in special circumstances for extraordinary achievements or during the year change the criteria for fulfillment of bonus targets if special reasons for it and a deviation is necessary to ensure the Company’s long-term interests and sustainability or to ensure the Company’s economic viability. Such remuneration may not exceed an amount corresponding to 30 percent of the fixed annual salary and not be paid more than once a year per individual. A resolution for such remuneration shall be made by the board after proposal from the remuneration committee. The Company has no right according to agreements to reclaim variable remuneration paid in cash.
Other benefits
The Company may provide other benefits to senior executives in accordance with local practice. Such other benefits may include company car and company healthcare etc. Such benefits may amount to a maximum of 20 percent of the fixed annual cash salary.
For executives who are stationed in a country other than their home country, additional remuneration and other benefits may be paid to a reasonable extent, considering the particular circumstances associated with such expatriation, whereby the overall purpose of these guidelines is to be met as far as possible. Such benefits may amount to a maximum of 30 percent of the fixed annual cash salary.
Pensions
Pension benefits for the CEO and other senior executives must reflect customary market terms, compared with that which generally applies to executives in comparable positions in other companies, and should normally be based upon defined contribution pension plans. Retirement occurs at the relevant/applicable retirement age.
Pension benefits, including health insurance, must be defined in contribution schemes with respect to the CEO. Variable cash payments to CEO shall not entitle to pension. Pension premiums for defined contribution schemes shall amount to a maximum of 30 percent of the fixed annual cash salary.
For other senior executives, pension benefits, including health insurance, must be defined in contribution schemes unless the employee is covered by defined-benefit pensions under compulsory collective agreement provisions. Variable cash compensation must be pension-based insofar as it is compelled by compulsory collective agreement provisions applicable to the senior executive. Pension premiums for defined contribution schemes shall amount to a maximum of 30 percent of the fixed annual cash salary.
Consultancy fees
Payment of consultancy fees and additional remuneration may be paid to directors after decision by the board of directors, after preparation by the remuneration committee, if a director performs services on behalf of the Company, which do not constitute board work. Such remuneration shall be designed in accordance with these guidelines.
Notice of termination and severance pay
The maximum mutual notice period in any senior executive’s contract may be no more than twelve months during which time salary payment will continue. Fixed salary during the notice period and any severance pay shall in total not exceed an amount corresponding to a maximum of a 24 months of fixed salary. The Company shall not allow any additional contractual severance payments.
Deviations from the guidelines
The board of directors shall be entitled to deviate from the guidelines, for example with respect to recruitments of senior executives on the global labor market to be able to offer competitive terms and conditions, in an individual case if there are special reasons for it and a deviation is necessary to ensure the Company’s long-term interests and sustainability or to ensure the Company’s economic viability.
Preparation, decision processes etc.
Decisions regarding salary and other remuneration to the managing director and other senior executives are prepared, within the scope of the guidelines resolved upon by the annual general meeting, by the remuneration committee and resolved on by the board of directors.
The remuneration committee shall also prepare the board of directors’ decisions on issues concerning principles for remuneration. The remuneration committee shall also monitor and evaluate programs for variable remuneration, both ongoing and those that have ended during the year, for the senior executives and monitor and evaluate the application of these guidelines for remuneration to the senior executives, as well as and current remuneration structures and levels in the Company.
The board of directors shall prepare proposals for new guidelines at least every four years and submit the proposal for resolution at the annual general meeting. The guidelines shall apply until new guidelines have been adopted by the annual general meeting.
The guidelines shall be applied in relation to every commitment on compensation to senior executives and every change in such commitment, which is resolved after the annual general meeting at which the guidelines were adopted. Thus, the guidelines have no impact on already preexisting contractually binding commitments. Guidelines resolved upon may also be amended by way of a resolution by any other general meeting. Within the scope and on the basis of the guidelines, after preparation by the remuneration committee, the board of directors shall annually decide on the specific revised remuneration terms for the CEO and each senior executive and make such other decisions on compensation to senior executives that may be required. The CEO or other senior executives shall not participate in the remuneration committee’s and the board of directors’ processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters.
Day to day costs such as travel expenses for the CEO are approved by the chairman of the board. Other day to day costs is approved by the CEO. Payout of fixed base pay is prepared by local payroll departments and are approved before payout by the local HR representative. Payout of short-term variable remuneration to senior executives and the CEO is subject to approval from the remuneration committee. Eligibility for share-related incentive program must be approved by the board of directors based on the proposal approved at the annual general meeting.
Compliance with guidelines is controlled annually through the following activities:
- Collection of documented annual targets for short-term variable pay.
- Random samples of salary payout approvals.
- Sample reports from payroll systems to identify any out of the ordinary payouts.
The results of the controls are summarized and reported to the remuneration committee. In the preparation of the board of directors’ proposal for these guidelines for compensation to the CEO and other senior executives, salary and employment conditions for employees of the Company have been taken into account by including information on the employees’ total remuneration, the components of the remuneration and increase and growth rate over time, in the board of directors’ basis of decision.
The board of directors considers that the guidelines on remuneration to senior executives are proportionate in relation to salary levels, remuneration levels and conditions for other employees in the group.
Share-related incentive programs
The table below provides an overview of the content of each program.
| Program | To | Class B shares | Subscription price | Subscription period | Number of class B shares |
|---|---|---|---|---|---|
| TO4 | Board of Directors | 150,000 | 19.50 | 25 March 2022 - 25 August 2023 | 150,000 |
| TO5 | Employees | 170,000 | 17.16 | 25 August 2021 - 25 August 2022 | 170,000 |
| TO6 | Employees | 173,000 | 45.14 | 25 August 2022 - 25 August 2023 | 173,000 |
| TO7 | Board of Directors | 200,000 | 45.14 | 25 August 2022 - 25 August 2023 | 200,000 |
| TO8 | Employees | 285,000 | 70.35 | 25 August 2023 - 25 August 2024 | 285,000 |
| TO9 | Board of Directors | 175,000 | 70.35 | 1 August 2025 - 30 September 2025 | 175,000 |
| TO10 | Employees | 165,000 | 70.35 | 30 September 2021 - 30 September 2024 | 165,000 |