Principles of Compensation

Klövern shall offer attractive premises and actively contribute to urban development in growth regions. Sustainability is a prerequisite for good business, and central to Klövern’s business strategy is the company’s sustainability strategy, which is based on the vision, the business concept and the company’s values. A well-integrated sustainability work in the business model and organization provides good profitability in a long-term perspective through attractive real estate, satisfied customers and committed employees.

The ability to recruit and retain qualified senior executives is an important condition for Klövern’s business strategy and sustainability agenda, both in the short and long term, to be successfully implemented in the company. An important part of this is that the company can offer a competitive total remuneration, which is made possible by these guidelines.

Variable cash benefits covered by these guidelines are intended to promote the company’s business strategy and long-term interests, including its sustainability.

Compensation components and conditions for members of the company’s management
Klövern shall offer market-based and competitive compensation that is in relation to responsibilities and powers. Furthermore, the remuneration should be based on factors such as the importance of the tasks, the competence, experience and performance of the employee. Remuneration shall consist of fixed salary, any variable remuneration, pension benefits and other benefits. In addition, the Annual General Meeting may – and regardless of these guidelines – decide on, for example, share and share price related remuneration.

Fixed salary
The fixed salary must be market-based and competitive and take into account the individual’s responsibilities and experience. The basic salary is reviewed every year. Senior executives do not receive fees for board assignments in the company or its subsidiaries.

Variable Remuneration
Variable Remuneration must be linked to pre-determined and measurable criteria, designed in the purpose of promoting the long-term value creation of the Company. Variable remuneration may amount to a maximum of 25 per cent of the fixed annual salary. Rewarded variable remuneration is paid as salary not conferring pension rights.

Pension benefits
Senior executives shall receive pension benefits in the form of old-age pensions and exemption from premiums, which must be defined contribution, and health insurance, which must be defined benefit. Pension premiums for senior executives can amount to a maximum of 35 percent of the fixed annual salary and the retirement age is 65 years. Variable cash benefits should not be pensionable.

Other benefits
Benefits in addition to salary, variable remuneration and pensions are paid to all senior executives in the form of company car, health insurance, dietary benefit and part of Klövern’s Profit sharing foundation. Provision for the foundation can amount to a maximum of one price base amount per employee and year and is based on a combination of Klövern’s earnings, return requirements and dividends to the shareholders.

Premiums and other costs due to such benefits may amount to a maximum of ten (10) percent of the fixed annual salary. For members of the company’s management operating in another country, pension benefits and other benefits are regulated in accordance with fixed or mandatory local practice, but adjustments must be kept as far as possible within the framework of these guidelines.

Profit-sharing foundation
Klövern´s profit-sharing foundation comprises all employees that have been employed during a specific period.

• The maximum allocation shall amount to a price base amount per employee.
• The size of the allocation must be determined with the guidance of established goals in Klövern’s business plan.
•  The assessment shall be made by the Board.
• An annual review of the goals shall be carried out.