In accordance with the provisions of the Swedish Financial Supervisory Authority, FFFS 2007:5, information pertaining to the Remuneration Policy of Länsförsäkringar Hypotek AB (Länsförsäkringar Hypotek) and its application must be published annually.
1. Process and decision-making process
Länsförsäkringar Hypotek AB (Länsförsäkringar Hypotek) is part of the Länsförsäkringar AB Group (LFAB Group). A Group-wide remuneration policy has been prepared for the LFAB Group. The policy, which is revised every year, was most recently adopted by LFAB’s Board of Directors on 17 June 2015 and by Länsförsäkringar Hypotek’s Board of Directors on 25 August 2015.
The revised Remuneration Policy for Länsförsäkringar Hypotek is based on a risk analysis of the risks that may be connected to the Remuneration Policy. The risk analysis, performed by Länsförsäkringar Hypotek’s Risk Control Function, resulted in an assessment that very limited risks are connected to the Remuneration Policy. The assessment is based on such factors as i) any variable remuneration is to comprise a bonus that may be paid in individual cases for exceptional work performance and at a maximum of two monthly salaries, ii) employees whose work duties have a significant influence on the company’s risk profile do not receive 60% of their variable remuneration until three years later and iii) variable remuneration for which payment has been deferred is only paid to the employee to the extent that it is justifiable considering the company’s financial situation.
Specifically controlled personnel at Länsförsäkringar Hypotek are identified when deciding on the remuneration policy.
Länsförsäkringar Hypotek’s Board decides on remuneration of employees who are members of corporate management and employees who have overall responsibility for one of the company’s control functions. Länsförsäkringar Hypotek’s Board has elected a Remuneration Committee from within its ranks, with the task of preparing issues pertaining to remuneration of these individuals prior to the Board’s decisions on such matters. The Remuneration Committee is also to prepare decisions on measures for following up the application of the Remuneration Policy. The Remuneration Committee has no decision-making mandate. One meeting of the Remuneration Committee was held in 2015.
Rikard Josefson and Christer Malm were elected members of the Remuneration Committee at the Board meeting on 28 May 2015.
2. Remuneration model and remuneration criteria
The basis of the Group-wide remuneration model is that it must contribute to generating favourable conditions for the LFAB Group to satisfactorily perform its task from the owners. The remuneration model must be compatible with, and promote sound and efficient risk management and counteract excessive risk-taking, while conforming to the LFAB Group’s long-term interests.
2.1 Fixed remuneration
The base of the remuneration model is to consist of fixed remuneration. The fixed remuneration must be at the correct level to attract and retain the right competency and must be set at an individual level, with a distinct connection to the employee’s work and performance, and comply with applicable collective agreements.
2.2 Variable remuneration
Variable remuneration can, in individual cases, be paid to reward exceptional work performance after the event, and in such a case in the form of bonus. The bonus may correspond to a maximum of two monthly salaries per year. Employees in control functions are not entitled to any form of variable remuneration.
2.3 Deferred remuneration
For an employee who can influence the company’s risk level and who receives variable remuneration, 60% of this variable remuneration is not paid until three years later. Länsförsäkringar Hypotek’s Board of Directors must ensure that the deferred remuneration payment is only paid or transferred to the employee in an amount that is justifiable considering the company’s financial situation and fulfilment of the criteria for the variable remuneration.
2.4 Remuneration for new employees
For new employees, what is known as guaranteed remuneration may be paid during the first year of employment. The guaranteed remuneration may amount to a maximum of 50% of fixed remuneration for the first year of employment.
2.5 Other remuneration and benefits
According to the Remuneration Policy, commission-based remuneration is paid to sales personnel and is regulated by collective agreement.
In addition to cash remuneration, the company may also offer benefits to employees in the form of, for example, discounts on company products, company cars, collectively agreed lunch subsidies and healthcare benefits.
Pension and severance terms and conditions are to comply with collective agreements. The LFAB Group may, within the framework of the remuneration policies governing remuneration of senior executives adopted by the Annual General Meeting, agree on special pension and severance terms and conditions.
Total remuneration expensed during the 2015 fiscal year
|Breakdown by category||Fixed remuneration SEK M||Variable remuneration SEK M||Individuals with fixed remuneration||Individuals with variable remuneration|
Other employees who can influence the company’s risk level
The “Corporate management” category comprises the President, Executive Vice President and other members of executive management or similar bodies who report directly to the Board of Directors or the President.
The “Other employees who can influence the company’s risk level” category comprises those defined as specifically controlled personnel.
During the 2015 fiscal year, remuneration totalling SEK 8.3 M was expensed and paid.
During the 2015 fiscal year, the expensed amount for severance pay amounted to SEK 0 and consisted of no employees. In addition, no severance pay offered was expensed.
This is a translation of the Swedish Länsförsäkringar Hypoteks ersättningssystem 2015.