Remuneration to senior executives1) For 2018, includes payment of SEK 0.4 (0.2) million to the President in respect of vacation compensation, as well as cost compensation in respect of company residence in the amount of SEK 0.3 (0.2) million.
2) Relates primarily to car and gasoline benefits, housing benefits as well as relocation benefits.
3) The amounts relate to payments made in the relevant financial year, which were earned in previous years. The compensation for 2018 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 2018 for the entire Group Executive Committee amounted to SEK 20.9 (22.0) million.
4) Includes compensation to 8 (8) members of the Group Executive Committee for the full year, including compensation during the termination period for 1 (0) member of the Group Executive Committee. 2 (0) members of the Group Executive Committee for nine months and 1 (0) members of the Group Executive Committee for three months.
Variable remunerationThe variable compensation for the CEO is in all limited to 105 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 80 percent of the annual base salary. For the member of the GEC employed in the U.S.A., the maximum outcome is 315 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 short-term variable salary component is related to: A) three Group objectives, 1. EBITDA margin relative to other comparable steel companies (Arcelor Mittal, AK Steel, Nucor, Salzgitter, ThyssenKrupp, US Steel and Tata Steel Europe), 2. net cash flow objective and 3. a sustainability objective established by the Board, measuring injury frequency, combined with B) divisional financial and operational objectives as well as C) one or more individual objectives. The individual objectives account for 15% of the total short-term variable pay. The other 85% relate to SSAB Group objectives and divisional objectives. SSAB Group objectives account for 85% of the President’s short term variable salary. For Executive Vice Presidents of Group functions, SSAB Group objectives account for 70% of short-term variable salary and for divisional Executive Vice Presidents 30–40%. Financial or operational divisional or functional objectives account for the remaining part.
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 30 percent of the annual base salary. The program applies for rolling three-year periods, is cash-based and linked to the total return on the SSAB share compared with a comparison group comprising the company’s competitors (Arcelor Mittal, AK Steel, Nucor, Salzgitter, ThyssenKrupp and US Steel) and return on capital employed The maximum outcome for the member of the GEC employed in the U.S.A. is 135percent of the annual base salary. The American LTI program is partly based on the same targets as above, but is also linked to SSAB Americas’ results and return on capital employed.
The outcome on variable remuneration is shown in note 2 of the Annual Report.
The minimum retirement age for members of the Group Executive Committee stationed outside the USA is 62.
Pensions are based on contributions, exceptions from this are Olavi Huhtala; he continues to be covered by the benefit-based pension scheme with a retirement age of 60 via Rautaruukin Eläkesäätiö, of which he has long been covered through his employment at Rautaruukki, as well as Charles Schmitt, whose pension scheme is in accordance with US legislation and practice
SSAB does not have a clawback-policy for senior executives and no change of control clause is applied. Furthermore, there are no stock ownership guidelines and no stock holding requirements. There is, however, an incentive for senior executives to buy shares for the payments under the long-term incentive program, as there is a top-up of 20% if the proceeds are invested in SSAB shares. The top-up is included in figures above.