The program for variable compensation is divided into a short term portion, which has applied to the Group for a number of years, and a long term portion, which has applied to the member of the GEC employed in the U.S.A. for quite some time but which has been introduced to the CEO and the other members of the GEC domiciled outside the U.S.A. during 2011.
The short term portion (“Short Term Incentive” or STI) for the CEO and the other members of the GEC domiciled outside the U.S.A. may amount to a maximum of 50 percent of the annual base salary.
The corresponding limitation for the GEC member in the U.S.A. is 180 percent of the annual base salary.
The STI program consists of three different levels of objectives; SSAB Group Objectives where focus is on the profitability of the Group compared to a number of competitors and on capital turnover, Business Unit Objectives which are governed by an annual business plan and Individual Objectives.
The long term portion (“Long Term Incentive” or LTI) for the CEO and other members of the GEC domiciled outside the U.S.A. may amount to a maximum of 25 percent of the annual base salary. The outcome of the LTI Program is depending on the SSAB Group’s TSR growth (Total Shareholder Return) over a three year period compared to a peer group of companies.
The maximum outcome for the member of the GEC employed in the U.S.A. is 150 percent of the annual base salary. The American LTI program is partly based on the same TSR index as above, but it is also based on profitability and performance over a three year period for SSAB’s business area in America.
The peer group consists of the following eight companies:
- Voest Alpine
- US Steel
- AK Steel
- Steel Dynamics
Should the SSAB Group’s TSR be better than all other companies in the peer group during the period, the LTI will result in maximum outcome. If the SSAB share ends up in second place the LTI will result in 85%, third place will result in 50% and a fourth place will result in 20% of the maximum outcome. If the SSAB share performs less than four other companies within the peer group the LTI will result in no outcome.
The outcome on variable remuneration is shown in note 2 of the Annual Report.