Guidelines for remuneration to the senior executives

Pursuant to the Swedish Companies Act, the general meeting of the company shall adopt guidelines for remuneration to the senior executives. The annual general meeting held on 8 May 2024 resolved to adopt the below guidelines for remuneration to the senior executives.

The following guidelines apply to the Company’s CEO and other members of Group management. In addition to the Company’s CEO, heads of business areas, CFO, head of M&A, the heads of Storskogen DACH and UK and any of the Company’s Board members who have entered into an employment agreement or consulting agreement with the Company or another Group company. After adoption by the annual general meeting, the guidelines shall be applied to any remuneration agreed upon and to changes to already-agreed remuneration. The guidelines do not apply to any remuneration resolved upon by the annual general meeting.

The guidelines’ promotion of the Company’s business strategy, long-term interests and sustainability
Storskogen strives to be the best owner for small and medium-sized enterprises. The focus is on long-term ownership, good profitability, stable cash flows and supporting companies to maintain and develop a strong position in their niche.

A prerequisite for successfully implementing the Company’s strategy is that the Company is able to recruit and retain qualified senior executives, which is enabled by these guidelines.

Remuneration that is subject to these guidelines shall aim to promote the Company’s business strategy, sustainability and long-term interests.

Remuneration components and other terms and conditions
Total remuneration shall be on market terms and may comprise the following components: a fixed cash salary, short-term variable cash remuneration, long-term variable cash remuneration, other benefits and pension. In addition to the provisions in the guidelines, the general meeting may resolve on share-based remuneration or remuneration linked to the share price.

The performance criteria measurement period for payment of variable cash remuneration shall be measurable over a period of one or several years. Total variable cash remuneration must not exceed 50 percent of the fixed cash salary during the measurement period.

Additional variable cash remuneration may be payable under extraordinary circumstances, provided such special arrangements are limited in time and only agreed upon on the individual level to recruit or retain senior executives or as remuneration for extraordinary efforts in addition to the individual’s regular work duties. Total extraordinary remuneration must not exceed 10 percent of the fixed cash salary.

The Group management’s pension benefits shall be on market terms in relation to the common practice for comparable executives in the market in which the senior executive operates and should be based on defined contribution pension plans or be in line with general pension plans (in Sweden, the ITP plan).

Subject to applicable law or mandatory provisions in collective bargaining agreements, pension benefits may not exceed 20 percent of the fixed cash salary, and variable cash remuneration shall not be pensionable.

Other benefits may include preventive healthcare and company car benefits. Premiums and other expenses relating to such benefits may not exceed 10 percent of the fixed cash salary.

Repayment and adjustments
Under certain circumstances and during a certain time, senior executives who participate in the Company’s short-term and long-term incentive programmes are obliged to repay any remuneration already paid, fully or in part, if the payment was made mistakenly or based on intentionally forged data or in the event of a material adjustment of the Company’s financial performance. Also, under extraordinary circumstances or to adjust for unforeseen non-recurring events, the board of directors may resolve to change payments according to incentive plans (before such payments are made).

Termination of employment
The notice period for a member of the Group management shall be no more than 12 months. During the notice period, the fixed cash salary and potential severance pay, including compensation for any competition restrictions, combined may not exceed an amount corresponding to the fixed cash remuneration for two years for a member of the Group management.

Criteria for variable cash remuneration
Variable cash remuneration is intended to award meeting predetermined and measurable criteria that promotes the Company’s business strategy and long-term interests, including the Sustainability Policy. Such criteria may be linked to the Company’s profit or loss, sales, cash flows and/or sustainability targets.

When the performance criteria measurement period for the payment of variable cash remuneration has ended, an evaluation of the outcome shall be made. The Remuneration Committee is responsible for evaluating the CEO’s outcome while the CEO is responsible for evaluating the other senior executives’ outcomes.

Salary and terms of employment
When the board of directors’ proposal for these remuneration guidelines was considered, salaries and terms of employment for the Company’s employees were considered by way of assessing information on the total remuneration to employees, the components of such remuneration and the remuneration’s growth and growth rate over time. This information was included in the basis for the board of directors’ decisions when evaluating the reasonableness of the guidelines and the limitations set by them.

Decision-making process for guidelines
The board of directors’ Remuneration Committee prepares the board of directors’ decisions on proposals for guidelines for remuneration to senior executives. The board of directors shall prepare a proposal for new guidelines at least every four years and submit a proposal for adoption by the annual general meeting. The guidelines shall apply until new guidelines have been adopted by the annual general meeting.

The Remuneration Committee shall also monitor and evaluate programmes for variable remuneration to the Group management and the application of the guidelines in terms of remuneration levels and structures. Members of the Group management must not be present during the board of directors’ deliberations and decisions on remuneration-related matters if they are affected by the issues.

Deviations from the guidelines
The board of directors may temporarily resolve to deviate from the guidelines, in whole or in part, if there are special reasons for such in an individual case and it is necessary to serve the Company’s long-term interests, including its sustainability, or to ensure the Company’s financial viability. As stated above, the Remuneration Committee prepares the board of directors’ resolutions on remuneration-related matters, which includes any resolution to deviate from the guidelines.