Remuneration to senior executives

 

Compensation and benefits for the
President and other members of the
Group Executive Commitee 1)  

President

Other Group
Executive
Committee

 SEK millions  2021  2020  2021  2020
 Fixed salary 2)  12.9  11.6  35.5  31.1
 Other benefits 3)    0.4   0.4   2.1  1.6
 Short-term variable salary 4)   0.0   5.2   0.0  13.5
 Long-term variable salary 4)   1.0   1.3   6.0  2.3
 Total compensation  14.3  18.5  43.7  48.8
 Pension expenses   5.8   5.6  11.4  12.1
 Total  20.1  24.1  55.1  60.9

 

 

1) Includes compensation to 10 (11) members of the Group Executive Committee for the full year, 1 (0) member of the Group Executive Committee for 11 months and 1 (0) member of the Group Executive Committee for 2 months.

2) For 2021, includes payment of SEK 0.18 (0.3) MSEK 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 (0.3) million.
During the period April to December 2020 temporary cost savings were implemented through deductions in salary for the CEO and Group Executive Committee. For the CEO, deduction was SEK 0.9 million and for other members of the Group Executive Committee SEK 2.3 million.

3) Relates primarily to housing-benefit, car and gasoline benefits. For 1 (0) member of the Group Executive Committee, benefits in connection with international assignment is included.

4) The amounts relate to payments made in the relevant financial year, which were earned in previous years. The compensation for 2021 is not known at the end of the accounting year due to the fact that comparisons are made with competitors who h ave 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 2021 for the entire Group Executive Committee amounted to SEK 26,2 (6,0) million. For 1 (0) member of the Group Executive Committee the long-term variable salary component refers to two payments due to postponement the 2020 payout.

Compensation to Senior Executives in 2021

Compensation to the President and other members of the Group Executive Committee consisted of a fixed salary component, a short-term variable salary component, and a long-term variable salary component. There is no share-related compensation.

The short-term variable salary component is related to: A) three Group objectives, 1. EBITDA margin relative to other comparable steel companies (Arcelor Mittal, Nucor, Salzgitter, ThyssenKrupp, US Steel and Tata Steel Europe), 2. net operating working capital of sales 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.

This short-term variable salary component is capped at 75% of fixed salary for the President and at 50% for others. The divisional head of SSAB Americas receives variable compensation which is considered to be competitive in the local market. The target result is 60% of fixed salary but may amount to a maximum of 180% in the event of extremely high performance.

In 2011, a long-term incentive program was introduced covering at the time a maximum of 100 (now 150) key persons throughout the Group, including the company’s President and other senior executives. The purpose of the program is to promote the company’s ability to recruit and retain key contributors. 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, Nucor, Salzgitter, ThyssenKrupp and US Steel) and return on capital employed. For participants in the program outside North America, the result is capped at between 18% and 30% of fixed salary. The outcome for participants in North America is capped at between 30% and 108%, for these participants, the program is also linked to SSAB Americas’ results and return on capital employed. The estimated annual cost for the 2021 program is SEK 79 million excluding social fees in the event of maximum realization.

Payments under the long-term incentive program take place in cash and on condition that the employment remains.

 

President and Chief Executive Officer

The total paid compensation package, excluding pension, amounted to SEK 14.3 (18.5) million out of which the short-term variable pay amounts to SEK 0 (5.2) million, which is 0% of the maximum outcome of the program or 0% of the annual base pay. The retirement age is 62. The pension is based on contributions and is covered by insurance. The cost amounted to 45 (49)% of fixed salary. Earned pension is inviolable but premium payments cease upon termination of employment. There is a 12-month notice period in the event of dismissal by the company. In addition, in such situation, severance compensation is payable equal to 12 months’ salary. In the event of the President’s resignation, the termination period is 6 months and, in such a situation, there is no entitlement to severance compensation. Variable salary components are earned during the termination period only on condition that the President remains in active service.

 

Other Group Executive Committee members

Apart from the President, the Group Executive Committee comprised 10 (10) persons. The Group Executive Committee is presented in the Corporate Governance Report.

The total paid compensation package, excluding pension, amounted to SEK 43.7 (48.8) million out of which the short-term variable pay amounts to SEK 0 (13.5) million, which is 0% of the maximum outcome of the program.

The minimum retirement age for members of the Group Executive Committee 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 possible 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.

The other members of the Group Executive Committee are entitled to 12 months’ notice in the event of dismissal by the company. In addition, in such a situation, severance compensation is payable equivalent to 6 months’ salary. Members of the Group Executive committee must give 6 months’ notice of resignation, whereupon there is no entitlement to severance compensation.

No change of control clause is applied.