The remuneration principles are to motivate senior executives to enhance the Group’s market position and earnings, and are to be linked to long-term growth in shareholder value. In addition, variable remuneration is to be linked to quantifiable criteria set in advance. The levels of remuneration paid to senior executives in related sectors and markets are continually monitored and assessed. The total remuneration is to comprise the following components: base salary, pension benefits, variable remuneration in the form of a cash bonus, other remuneration and benefits, and severance pay.
The CEO and other senior executives in the company, excluding the CEO of ICA Banken, shall be included in two variable remuneration schemes taking the form of a cash bonus, one of which runs for one year and the other for three years.
A comprehensive description of the guidelines is to be found in the documentation issued in connection to the AGM 2019 ›
The Remuneration Committee annually evaluate the remuneration to senior executives and this is reported by the Board according to Swedish Corporate Governance Code, section 9.1.
Annual bonus programme
The annual bonus programme is cash-based and linked to the targets for each financial year and maximised at 27,5% of annual salary (55% for the CEO).
The targets for the bonus programme are determined by the Board of Directors ahead of each new financial year and individual bonus agreements are to be signed with each participant. The content of the agreements depends on the participant’s position at the time of signing. The targets, which shall be financial and operational, shall be objectively measurable and related to ICA Gruppen’s strategic themes.
The bonus will be determined annually in conjunction with publication of the year-end report for the respective financial year based on an evaluation of the participants’ achievement of the targets as described in the bonus agreements. Payment of bonus will be conditional upon the participant remaining employed for the duration of the programme. The Board of Directors has the right to adjust the bonus system during the term of the programme in the case of, for example, extraordinary increases or decreases in the Group’s earnings.
Long-term bonus programme
The lon-term bonus programme is cash-based and linked to value creation in the Group. The bonusprogramme is maximised at 30% of annual salary (60% in the case of the CEO). The targets for the bonus programme are to be objectively quantifiable and determined by the Board as well as being linked to both absolute and relative performance requirements. Fulfilment of the absolute performance criteria accounts for 60% of the maximum outcome of the long-term bonus programme and relates to:
(i) operating margin (EBIT margin) excluding non-recurring items;
(ii) return on capital employed (ROCE) in the Group excluding ICA Banken; and
(iii) net sales increase.
The relative performance requirements account for the remaining 40% of the maximum outcome in the long-term bonus programme and relate to the Company’s ranking in a benchmark group consisting of ten other companies in Europe conducting similar operations. The outcome is dependent on the Company’s ranking in this benchmark group in terms of:
(i) net sales increase; and
(ii) EBIT margin.
In the event of a ranking between 9 to 11, no bonus will be paid in relation to the relative performance requirements. Fulfilment of the relative performance requirements is evaluated annually and the average for the entire bonus period is determined by the average for each individual year. Payment of bonus will be conditional upon the participant remaining employed for the duration of the programme. The Board of Directors shall have the right to adjust the bonus system during the term of the programme in the case of, for example, extraordinary increases or decreases in the Group’s earnings.
