AAK Annual Report 2020

AAK Annual Report 2020 118 other than for costs in connection with their participa- tion in Board activities. For further information about remuneration to members of the Board, please see page 87. Evaluation of the CEO The Board continuously evaluates the work and com- petence of the CEO and the Company’s management team. This is discussed at least once a year without representatives of the Company management being present. Guidelines for remuneration of senior executives The 2020 Annual General Meeting approved the principles for the remuneration of senior executives. The principles for the remuneration of AAK’s senior executives are designed to ensure, from an interna- tional perspective, that AAK can offer compensation that is competitive and at the prevailing market level to attract and retain qualified people. The total remuner- ation package paid to senior executives shall consist of fixed basic salary, annual variable salary, pension, company car and severance payment. The fixed salary shall be individually differentiated on the basis of responsibility and performance, and shall be set on market principles and revised annually. In addition to annual salary, senior executives shall also receive a variable salary, which shall have a pre-set ceiling and be based on the outcome in relation to goals set annually. The goals shall be related to the company’s performance and shall also be able to be linked to individual areas of responsibility. During 2020, it was decided that ESG targets henceforth should be a quali- fier for the Executive Committee’s remuneration. The annual variable portion must not exceed 110 percent of the fixed salary. In addition to the variable salary mentioned, share or share-price related incentive programs may be added as determined from time to time by the Annual General Meeting. The right to a pen- sion for senior executives shall apply from the age of 60 at the earliest. Pension plans for senior executives shall primarily be defined benefit plans. In the event of termination of employment by the Company, the notice period for the CEO and other senior executives shall be twelve months, and they shall be entitled to receive severance pay with a pre-determined ceiling corresponding to twelve months’ salary. For termina- tion of employment by the employee, a notice period of six months shall normally apply and no severance pay shall be payable. These guidelines will cover those persons who are in Group management positions during the period of time in which the guidelines apply. The guidelines apply to agreements entered into after a resolution by the Annual General Meeting, and in the event that changes are made to existing agreements after this point in time. The Board will be entitled to diverge from the guidelines if there are particular reasons to do so in an individual case. Board committees Audit and remuneration issues within the Board are handled in committees, whose task it is to prepare issues arising and submit proposals for decisions to the Board. The tasks and working practices of the committees are determined by the Board in written instructions, which constitute part of the Board’s working practices. Remuneration Committee In accordance with the Board’s working practices, issues of remuneration to the CEO and senior exec- utives shall be prepared by the Remuneration Com- mittee. The Remuneration Committee prepares and presents proposals to the Board relating to remuner- ation to the CEO and other senior executives. The final task of the Remuneration Committee is to monitor and evaluate the ongoing programs for variable remunera- tion of the company management team, and programs terminated during the year, as well as the application of the guidelines for the remuneration of senior executives and the current remuneration structure and remuneration levels in the Company. During 2020, the members of the Remuneration Committee were Georg Brunstam (Chairman) and Märta Schörling Andreen. The recommendations of the Remuneration Commit- tee to the Board include principles for remuneration, the relationship between fixed and variable salary, conditions for pensions and severance pay and other benefits payable to the management. Remuneration to the CEO of the Group has been decided by the Board on the basis of the recommendations of the Remuner- ation Committee. Remuneration to other senior exec- utives has been decided by the Chief Executive Officer in consultation with the Remuneration Committee. For further information, see page 87. During 2020, the Remuneration Committee met on two occasions, on which both members attended. Current guidelines for remuneration to senior executives can be found in Note 8. The Board’s proposal for new guidelines will be put to the Annual General Meeting in 2021 for a decision.