Remuneration principles

The principles for remuneration and terms of employment for Group Management described below were resolved at the Annual General Meeting 2021. 

Background
Under the Swedish Companies Act and the Code of Corporate Governance, the General Meeting is to decide on principles for remuneration and other conditions of employment for Group Management. At Wihlborgs, currently only the Chief Executive Officer is encompassed by the legal definition of senior executives. The remainder of the Group Management comprises the Chief Financial Officer, Director of Communications and Marketing, Director of Sustainable Business and the Director of Projects and Development, Regional Director Malmö, Regional Director Lund and Regional Director Helsingborg.

The guidelines’ promotion of Wihlborgs’ business strategy, long-term interests and sustainability
An overriding objective of the operations is for Wihlborgs to generate positive growth in shareholder value over time, which is to be achieved through implementing the company’s business strategy. In brief, Wihlborgs’ business strategy is to specialise in efficient sub-markets in the Öresund region, where Wihlborgs will own, manage in-house and develop commercial properties. Additional information on Wihlborgs' business strategy. Wihlborgs applies the requisite remuneration levels and employment terms to be able to recruit and retain senior executives with high levels of competence and capacity to reach the set goals, implement the business strategy and promote Wihlborgs’ long-term interests, including its sustainabiity agenda. The Board of Directors considers and evaluates remuneration as a whole, comprised of the components of fixed salary, variable remuneration, pension benefits and non-monetary benefits. Conformity to market conditions and competitiveness apply as general principles for remuneration of senior executives of Wihlborgs and these guidelines enable senior executives to be offered such remuneration. 

Preparation
The entire Board, excluding the Chairman of the Board, prepares issues pertaining to the guidelines governing remuneration and terms of employment for senior executives, and decides the remuneration and terms of employment for senior executives. In that connection, the Board prepares a proposal for new guidelines at least every fourth year and submits the proposal for resolution by the AGM. The guidelines apply until such time as new guidelines are adopted by the general meeting. In this capacity, the Board of Directors monitors and evaluates variable remuneration programs for senior executives, the application of guidelines for remuneration for senior executives and the applicable remuneration structures and remuneration levels in the company. The majority of the participating Board members are to be independent in relation to the company and the company management. Neither the CEO nor other members of Group Management participate in the Board of Directors’ processing of and decisions on remuneration-related matters, insofar as they are impacted by these matters.

Remuneration
Wihlborgs’ Board of Directors proposes that remuneration and other terms and conditions of employment should be set taking into consideration competence and area of responsibility. All senior executives receive fixed remuneration. Any remuneration over and above the fixed salary is capped at half of the fixed remuneration, and is to be settled in cash. Where appropriate, remuneration in addition to the fixed salary is based on outcomes relative to set targets and must accord with the interests of the shareholders. The company currently has no remuneration commitments to senior executives or the other members of Group Management apart from the fixed salaries. At Wihlborgs, there is a profit-sharing fund that encompasses all employees. Allocations to the fund are based on the return on equity and are limited to a maximum of one basic amount (as defined by Statistics Sweden) per year for each employee.

Pension benefits
The pensionable age is 65 for all members of Group Management. The cost of the CEO’s pension is fixed at premium of 35 percent of the pension-based salary per year during the period of employment. For other members of Group Management, the ITP plan or its equivalent applies.

Non-monetary benefits
Non-monetary benefits to senior executives may comprise health insurance, mobile phones and company cars.

Period of notice and severance pay
For the CEO, a mutual period of notice of six months applies; for other members of Group Management, a period of notice of four to six months applies. Severance pay for the CEO amounts to 18 months’ salary and for other members of Group Management a maximum of 12 months’ salary. Severance pay is offset by other revenue.

The entire Board, with the exception of the Chairman of the Board, prepares the question on the principles for remuneration and terms of employment for Group Management and decides on the CEO’s remuneration and terms of employment.

Salary and terms of employment for other employees
In the preparation of the Board of Directors’ proposal for these remuneration guidelines, salary and employment terms for Wihlborgs’ other employees have been taken into account by including information on the employees’ total remuneration, the components of the remuneration as well as its increase and growth rate over time in the Board of Directors’ decision data when evaluating whether the guidelines and the limitations set out herein are reasonable.

Departure from the guidelines in the case of special circumstances
The Board of Directors may temporarily resolve to depart from these guidelines, in whole or in part, if in a specific case there are special reasons for the departure and the departure is necessary to satisfy the company’s long-term interests, including its sustainability, or to ensure the company’s financial viability.

Description of material changes in the guidelines and how shareholder views have been addressed
These guidelines have been prepared pursuant to the new requirements that apply ahead of the 2020 AGM. The connection to the company’s business strategy and criteria for variable remuneration has been clarified. Otherwise, the same guidelines as previously apply for fixed and variable salaries, other benefits, allocations to the company’s profit-sharing fund, terms of employment, etc.