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Remuneration to senior executives

Compensation and benefits for the President and other members of the Group Executive Commitee  President
  Other Group Executive Committee
SEK millions 2016  2015 2016  2015
Fixed salary 1) 9.3 9.3 23.2 27.8
Other benefits 2) 0.3 0.3 0.6 2.3
Short-term variable salary 3) 5.6 0.4 15.6 4.0
Long-term variable salary 3) - - 0.7 0.5
Total compensation 15.2 10.0 40.1 34.6
Pension expenses 4.0 3.9 9.3 8.0
Total 19.2 13.9 49.4 42.6
1) For 2016, includes payment of SEK 0.2 (0.1) million to the President in respect of accrued, non-utilized vacation, and vacation compensation, as well as cost compensation in respect of company residence in the amount of SEK 0.2 (0.2) million.
2) Relates primarily to car and gasoline benefits, as well as housing benefits.
3) The amounts relate to payments made in the relevant financial year, which were earned in previous years. Since the compensation is not known at the end of the accounting year due to the fact that comparisons are made with competitors who have not yet reported their figures, and also the fact that the Board can decide to reduce the compensation if special reasons exist, compensation in this table is reported only in the year in which payment has taken place. Booked variable salary components for the entire Group Executive Committee amounted to SEK 2.8 (16.3) million.

 

Variable remuneration

The variable compensation for the CEO is in all limited to 100 percent of the annual base salary and for the other members of the Group Executive Committee (GEC) domiciled outside the U.S.A. to a maximum of 75 percent of the annual base salary. For the member of the GEC employed in the U.S.A., the maximum outcome is 308 percent of the annual base salary.

The program for variable compensation for the CEO and the other members of GEC is divided into a short term incentive and a long term incentive. There is no share-related compensation.

The short term portion (“Short Term Incentive” or STI) may amount to CEO a maximum of 75 percent of the annual base salary. For the other members of the GEC domiciled outside the U.S.A. STI 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 objectives related to the Group’s EBITDA margin relative to other comparable steel companies, a working capital related to sales objective and to an objective related to injury frequency established by the Board,.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 128 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 Americas.

The outcome on variable remuneration is shown in note 2 of the Annual Report.

 

Pension benefits

The CEO and the other members of the GEC domiciled outside the U.S.A. have the right and are obligated to retire at the age of 62.

In addition to the statutory pension plans (in Sweden ITP plan), they also have a defined contribution top-up plan where the premium is paid to a capital-sum insurance according to a matrix of age and salary levels. The plan aim to cover early retirement at the age of 62 instead of 65, and also to compensate at salary levels where no contributions are made according to the statutory retirement plans.


Due to previous commitments, two GEC members are exceptions of this general pension plan setup. One of them has a defined benefit pension plan originating from his employment in former Rautaruukki, according to which he is entitled to retire at the age of 60. For one of the GEC members the agreed retirement age is 65.  An executive leaving the company before retirement age is entitled to receive a benefit equal to the balance in the capital-sum insurance.

Survivors’ benefits and cost for waiver of premium fee are financed within the premium matrix In case of long term illness, the CEO and other GEC members receive pension benefits according to separately specified terms.

For the member of the GEC employed in the U.S.A, there is a defined contribution 401(k) plan where the company matches the employee’s contribution. If the executive leaves the company, he is entitled to receive a benefit equal to the vested balance in his participant account. In case of death before retirement, the designated beneficiary is entitled to receive a benefit equal to the vested balance in the participant account.