Compensation paid to the CEO and the other members of the group management in 2018

KSEK Ordinary compensation Other benefits Pension benefits Total
CEO 2,638 1,710 264 4,612
Other senior executives 6,909 2,542 927 10,378
Total 9,547 4,252 1,191 14,990

Guidelines

Pursuant to the Swedish Companies Act, the annual general meeting of the Company shall adopt guidelines for remuneration to the senior executives. The annual general meeting on 22 February 2019 resolved to adopt the below guidelines for remuneration to the senior executives for the period until the close of the annual general meeting 2020.

General principles for remuneration and other terms and conditions

Remuneration and other terms and conditions of employment shall be adequate to enable Karnov to retain and recruit skilled senior executives at a reasonable cost. The remuneration to senior executives shall consist of fixed remuneration, variable remuneration, pension and other benefits, and it shall be based on principles of performance, competitiveness and fairness.

Principles for fixed remuneration

Each senior executive shall be offered a fixed remuneration in line with market conditions and based on the manager’s responsibility, expertise and performance.

Principles for variable remuneration

Variable remuneration may comprise annual variable cash salary and long-term variable pay in the form of cash, shares and share-price related instruments in the Company. Variable remuneration shall be subject to the fulfilment of defined and measurable targets aimed at promoting the Company’s long-term value creation.

Variable remuneration paid in cash shall be set at a maximum percentage of the annual fixed salary. For the CEO, the target amount of any variable remuneration paid in cash shall be set to not more than 50 per cent of the annual fixed salary and the maximum amount shall be capped to a 100 per cent of the annual fixed salary. For the other senior executives, the target amount of any variable remuneration paid in cash shall be set to not more than 40 per cent of the annual fixed salary and the maximum amount shall be capped to 75 per cent of the annual fixed salary.

In special cases, agreements may be reached on remuneration of a non-recurring nature, provided such remuneration does not exceed an amount corresponding to the individual’s annual fixed salary and maximum variable cash salary, and is not paid more than once per year and per individual.

Principles for share and share-price related incentive programs

Long-term variable remuneration in the form of shares and share-price related instruments may only be paid by means of participation in long-term incentive programmes adopted by a general meeting. Share and share-price related incentive programs are to be designed with the aim of achieving increased alignment between the interests of the participating individual and the interests Company’s shareholders. The vesting period or the period from the commencement of an agreement to the date for acquisition of shares is to be no less than three years. Programs that involve acquisition of shares are to be designed so that a personal holding of shares in the Company is promoted.

Principles for pensions, remuneration during periods of notice and severance pay

Agreements regarding pensions shall, where applicable, be premium based and designed in accordance with the level and practice applicable in the country in which the senior executive is employed.

Fixed remuneration during notice periods and severance payment, including payments for any restrictions on competition, shall in aggregate not exceed an amount equivalent to the fixed remuneration for 24 months for the CEO and 12 months for other senior executives. No severance pay shall be paid in the case of termination by the employee.

Other benefits, such as a company car, preventive care, health care and health insurance, shall comprise a small portion of total compensation and comply with customary market-based terms.

Principles for deviations from the guidelines

The board of directors may resolve to deviate from the guidelines if the board of directors, in an individual case, is of the opinion that there are special circumstances justifying a deviation.