Remuneration

Remuneration to the members of the Board of Directors

Fees and other remuneration to the members of the Board of Directors are resolved by the Shareholders’ meeting. At the annual Shareholders’ meeting held on 8 June 2020, it was resolved that EUR 275,000 shall be paid to the Chairperson of the board of directors and EUR 125,000 to each of the other board members. In addition, EUR 40,000 shall be paid to the Chairperson of the audit committee and the remuneration committee, respectively, and remuneration to each of the other members of the relevant committee shall be paid EUR 20,000 each. The members of the board of directors are not entitled to any benefits following termination of their assignments as directors of the board.

The Company’s nomination committee recommends the members of the board of directors (who do not already have such holding) to acquire, over a three-year period, listed EQT AB shares corresponding to at least one year’s board compensation, before taxes, excl. compensation for committee work.

Remuneration to the members of the board during the 2019 financial board was paid as set out below.

Name

Function

Renumeration from

Renumeration

Pension expenses

Other benefits

Total
(MEUR)

Conni Jonsson

Chairperson

EQT AB

0,3

 

 

0,3

   

Subsidiary* 

0,1

0,0

0,0

0,1

Finn Rausing

Board member

EQT AB

0,1

   

0,1

Gordon Orr

Board member

EQT AB

0,2

   

0,2

Peter Wallenberg Jr

Board member

EQT AB

0,1

   

0,1

Johan Forssell

Board member

EQT AB

0,1     0,1

Edith Cooper

Board member

EQT AB

0,2

   

0,2

Guidelines for remuneration to executive management

The board of directors seeks to attain a remuneration system for the CEO, other members of the executive management (ExCom) and other employees which is in line with market conditions and competitive, so that EQT is able to recruit, motivate and retain qualified personnel and the best talent.

Guidelines for executive remuneration (remuneration policy)
The CEO, the deputy CEO and other members of the Executive Committee (executive management) fall within the provisions of these guidelines. To the extent a board member conducts work for EQT, in addition to the board work, consulting fees and other compensation for such work may be paid. The guidelines are forward-looking, i.e. they are applicable to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the annual shareholders’ meeting 2020. These guidelines do not apply to any remuneration separately decided or approved by the shareholders’ meeting.

EQT has a clear remuneration philosophy (including for variable cash) applicable across the whole group which also governs the remuneration to the Executive Committee and links compensation to EQT AB Group’s business strategy, sustainability, long-term interests and long-term value growth for its shareholders.

Most important is to incentivize fund performance and ensure aligned interest with our limited partners in the EQT funds, EQT AB’s shareholders as well as EQT’s long term approach. EQT is a performance driven organization focused on long-term value creation in line with our culture. Team performance and individual performance are important – therefore we reward both. Performance is key to our success and we award higher performance with higher compensation.

To be able to achieve the business goals, EQT needs to be able to attract and retain world class talent suitable for each role. To achieve this, EQT applies market competitive total compensation.

EQT compensate locally based on geography and in line with local practice and regulations, taking into account, to the extent possible, the overall purpose of these guidelines.

The principles in these guidelines enable EQT AB to offer the Executive Committee a competitive total remuneration.

For more information regarding the EQT AB Group’s business strategy, please see https://www.eqtgroup.com/About-EQT/.

EQT Share program
An incentive program, the EQT Share program, has been implemented in the EQT AB Group. The EQT Share program has been resolved by the shareholders’ meeting and is therefore excluded from these guidelines. The program includes members of the Executive Committee in EQT AB. The performance criteria used to assess the outcome of the program are distinctly linked to the EQT AB Group’s business strategy, sustainability, long-term interests and value growth for its shareholders. These performance criteria comprise financial targets, inter alia, revenue growth and EBITDA and in addition thereto the general competitiveness as well as the individual meeting or exceeding EQT AB’s highly set expectations on adding value to the EQT platform. The participants will invest a variable amount (financed by EQT) in C shares after a performance year, whereupon a three-year (approximately) holding period follows. For more information regarding the EQT Share program, including the criteria which the outcome depends on, please see eqtgroup.com/shareholders/corporate-governance/incentive-programs/.

Types of remuneration, etc.
The remuneration shall be on market terms and may consist of the following components: fixed remuneration, variable cash remuneration, pension benefits and other benefits. Additionally, the shareholders’ meeting may – irrespective of these guidelines – resolve on, among other things, share-related or share price-related remuneration.

Fixed remuneration                
The fixed remuneration, i.e. base salary, should be competitive and reflect responsibility and performance.

Variable remuneration           
The satisfaction of criteria for awarding variable cash remuneration, within the EQT Bonus program, shall be measured over a period of one year. The variable cash remuneration may amount to no more than 100 percent of the annual base salary, apart from variable cash remuneration to the Capital Raising and Client Relations responsible, which may amount to no more than 700 percent of the annual base salary.

The EQT Bonus program consists of a performance assessment of the business as well as an individual performance assessment. Important business performance factors determining the size of the bonus is the success of the underlying business measured by business performance in the funds (investments and exits as well as portfolio and fund performance), business profitability, fundraising as well as organizational development. The individual performance is assessed versus agreed targets as well as meeting, exceeding or not meeting high set individual performance expectations for the individual in the current role.

To which extent the criteria for awarding variable cash remuneration has been satisfied shall be evaluated/determined when the measurement period has ended. The remuneration committee shall be responsible for the evaluation so far as it concerns variable remuneration to the CEO. For variable cash remuneration to other members of the Executive Committee, the CEO shall be responsible for the evaluation. For financial objectives, the evaluation shall be based on the latest financial information made public by EQT AB.

The Executive Committee partly consists of owners of EQT AB. Owners with ownership above 1.5 percent of the shares of EQT AB may not be comprised by the EQT Bonus program, i.e. variable cash remuneration, nor the EQT Share program. Therefore, total remuneration for the majority of the Executive Committee consists of base salary, pension benefits and other benefits.

Pension
All members of the Executive Committee shall be covered by defined contribution pension plans, for which pension premiums shall be based on the members’ base salary and paid by the company during the period of employment. For current members of the Executive Committee pension contributions shall be based on base salary and follow contribution levels in accordance with local market practice, except for the application of a cap. For Sweden, this means that it shall be comparable to the old BTP-plan with a contribution cap for base salary exceeding 40 Income base amounts. The pension premiums shall amount to no more than 25 percent of the annual base salary.

Other benefits
Other benefits, such as insurances (health, life, travel), sports contributions or occupational health services, should be payable to the extent this is considered to be in line with market conditions in the market concerned. Premiums and other costs relating to such benefits may amount to no more than 25 percent of the annual base salary.

Termination of employment and terms for severance pay for the CEO
A twelve month notice period will apply if notice is given by the CEO or EQT AB. The CEO’s employment terms include a non-competition clause. If used, this would entitle the employee to an additional compensation corresponding to a maximum of twelve months’ salary, however, reduced by any remuneration paid by a new employer.

Termination of employment and terms for severance pay for senior executives
In the event of notice being given by the EQT AB Group, a notice period of nine months applies, while in the event of notice being given by the senior executive a period of notice of six months applies. The senior executives’ employment terms also include a non-competition clause. If used, this entitles the employee to an additional compensation corresponding to a maximum of nine months’ salary, however, reduced by any remuneration paid by a new employer. Base salary during the notice period and severance pay may not together exceed an amount corresponding to the base salary for eighteen months. When termination is made by the executive, the notice period may not exceed six months, without any right to severance pay.

Salary and employment conditions for employees taken into account during preparations of these guidelines
In the preparation of the board of directors’ proposal for these remuneration guidelines, salary and employment conditions for employees of the EQT AB Group have been taken into account by including information on the employees’ total income, the components of the remuneration and increase and growth rate over time, in the remuneration committee’s and the board of directors’ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.

The decision-making process to determine, review and implement the guidelines
The board of directors has established a remuneration committee. The committee’s tasks include preparing the board of directors’ decision to propose guidelines for executive remuneration. The board of directors shall prepare a proposal for new guidelines at least every fourth year and submit it to the shareholders’ meeting. The guidelines shall be in force until new guidelines are adopted by the shareholders’ meeting. The remuneration committee shall also monitor and evaluate programs for variable remuneration for the Executive Committee, the application of the guidelines for executive remuneration as well as the current remuneration structures and compensation levels in the EQT AB Group. The members of the remuneration committee, apart from Conni Jonsson, are independent of EQT AB and its Executive Committee. The CEO and other members of the Executive Committee do not participate in the board of directors’ processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters.

Deviation from the guidelines
The board of directors may temporarily resolve to deviate from the guidelines, in whole or in part, if in a specific case there may be special cause for the deviation and a deviation should be necessary to serve the EQT AB Group’s business strategy, sustainability, long-term interests and long-term value growth for its shareholders, or to ensure the EQT AB Group’s financial viability. As set out above, the remuneration committee’s tasks include preparing the board of directors’ resolutions in remuneration-related matters. This includes any resolutions to deviate from the guidelines.