Note 13 – Salaries and other remuneration

Group Parent Company
SEK m 2017 2016 2017 2016
Salaries and other remuneration 852 784 95 89
Social security expenses 190 167 36 34
Pension expenses – defined contribution plans 33 39 24 19
Pension expenses – defined benefit plans 15 12
Total 1 090 1 003 155 142

Salaries and other remuneration for senior executives and other employees:

2017 2016
SEK m Salaries and other remuneration (of which bonuses) Pension expenses Salaries and other remuneration (of which bonuses) Pension expenses
Board, CEO, VPs and other senior executives 32 (2) 7 29 (2) 6
Other employees 820 40 755 45
Group, total 852 48 784 51

Board fees as well as employment and termination terms and conditions for senior executives

The Group’s Board consists of 5 (2016: 5) individuals, of whom 60% are men (2016: 60%).

Other senior executives’ comprise 9 (2016: 9) individuals, including the CEO, of whom 78% are men (2016: 78%).

Johan Sundelin succeeded Thomas Gustafsson as CEO on October 16, 2017. Thomas remained with the Company throughout 2017.

Principles
Fees and other remuneration for the Board of Directors, including Duni’s Board Chairman, are decided upon by the Annual General Meeting. Pursuant to guidelines for remuneration of senior executives adopted by the AGM on May 3, 2017, remuneration for the CEO and other senior executives shall be on market terms and consist of basic salary, other benefits (including car benefit), other remuneration (including bonuses and vacation pay) and pension. At present, there are no long-term share-related incentive schemes. “Other senior executives” are those persons who, together with the CEO, constitute Group Management. Pension benefits and other remuneration for the CEO and other senior executives are payable as part of the total remuneration package. The guidelines for remuneration of senior executives, which are proposed for adoption at the 2018 AGM, are in all essential respects the same as those which applied in 2017.

In accordance with a resolution adopted by the AGM on May 3, 2017, the annual fee for the current Chairman of the Board shall be SEK 562,000 (SEK 535,000), while the fee for other directors shall be SEK 300,000 (SEK 285,000) each. In addition, fees for committee work shall be SEK 63,000 (SEK 60,000) to the Chairman of the Remuneration Committee and SEK 29,000 (SEK 27,500) each to the other members of the Remuneration Committee, as well as SEK 121,000 (SEK 115,000) to the Chairman of the Audit Committee and SEK 57,000 (SEK 54,000) each to other members of the Audit Committee.

The Chairman of the Board received no remuneration other than fees for board work and committee work.

The tables below specify the amount by which the decided fees stated above were incurred in the 2017 and 2016 financial years.

Remuneration and other benefits during the year

2017, SEK k Basic salary/
Board fee
Pension
expenses*
Other
benefits
Variable
remuneration**
Signing bonus*** Total
Chairman of the Board – Magnus Yngen 638 638
Director – Pauline Lindwall 357 357
Director – Pia Rudengren 414 414
Director – Alex Myers 351 351
Director – Johan Andersson 324 324
CEO – Thomas Gustafsson 4 021 1 910 30 5 961
CEO – Johan Sundelin 833 335 11 2 500 3 679
Other senior executives 12 277 4 560 620 677 18 134
Total 19 214 6 805 661 677 2 500 29 857
* Of the Group’s pension expenses above, the entire item relates to the Parent Company.
** The variable remuneration relates to bonuses recognized as expenses for the 2017 financial year, which are paid out in 2018.
*** Signing bonus refers to remuneration received on the start date.
2016, SEK k Basic salary/
Board fee
Pension
expenses*
Other
benefits
Variable
remuneration**
Severance compensation Total
Chairman of the Board – Anders Bülow until May 3, 2016 206 206
Chairman of the Board – Magnus Yngen as from May 3, 2016 411 411
Director – Pauline Lindwall 334 334
Director – Pia Rudengren 400 400
Director – Alex Myers 339 339
Director – Magnus Yngen until May 3, 2016 115 115
Director – Johan Andersson as from May 3, 2016 208 208
CEO – Thomas Gustafsson 3 904 1 904 81 5 889
Other senior executives 11 826 3 842 531 783 16 982
Total 17 742 5 746 612 783 0 24 884
* Of the Group’s pension expenses above, the entire item relates to the Parent Company.
** The variable remuneration relates to bonuses recognized as expenses for the 2016 financial year, which are paid out in 2017.

Bonuses

The CEO and all senior executives are included in a bonus system based on profitability and capital tie-up targets, primarily with respect to their individual operational area, but also Group targets. For the CEO , the variable remuneration is capped at 75% (2016: 75%) of the basic salary. For other senior executives, the variable remuneration is capped at between 75%–45% (2016: 75%–45%) of the basic salary. The bonus system covers only one year each time following a decision by the Board of Directors. For the 2017 financial year, a bonus of SEK 0 m (2016: SEK 0 m) was paid to the CEO.

Pensions

CEO

The CEO has an agreed retirement age of 65 and is covered by Duni’s pension policy for salaried employees with a position within Group Management, with the addition that Duni pays 35% on the pension-qualifying income in excess of 7.5 income base amounts to the alternative ITP solution. Pension-qualifying income also includes a three-year average of paid bonuses. The pension expense corresponds to the costs for defined contribution plans. The occupational pension provision is fully tax-deductible for Duni. There are no other outstanding pension obligations to the CEO.

Other senior executives

The other senior executives have defined contribution plans. Two of them have a share in a pension plan which was closed some time ago and in which no new vesting takes place. “Pension entitlement salary” means fixed annual salary plus vacation pay, as well as an average of bonus payments received for the past three years. In addition, there are commitments regarding sickness pension and survivor’s pension. Each month, Duni pays a cash pension contribution in accordance with each senior executive’s individual pension plan. Pension is earned on a straight-line basis during the employment period, i.e. from the date of employment until retirement age. There are no outstanding pension obligations to other senior executives.

Severance compensation

CEO

The CEO has a separate agreement regarding severance compensation. The severance compensation comprises payment for twelve months following a notice period of six months. Only the Company is entitled to trigger the agreement.

The CEO is entitled to terminate his employment on six months’ notice. There is no entitlement to severance compensation in the event of termination by the CEO.

Thomas Gustafsson terminated his employment in July and his employment ends in the beginning of January. He will not receive any severance compensation. Johan Sundelin became the new CEO on October 16, 2017. Thomas received full remuneration for the full year and participated in Johan’s orientation program.

Other senior executives

The majority of the other senior executives have employment contracts which are terminable on six months’ notice, by either the Company or the executive. In the case of termination by the Company, the executive is entitled to severance compensation equal to six monthly salaries, which is included in the basis for pension computation. In the case of one executive, the employment is terminable by the on twelve months’ notice by either the Company or the executive, without severance compensation.

Signing bonus

CEO

Johan Sundelin received signing bonus of SEK 2,500 k on the start date. This amount qualifies neither for bonuses nor pensions.

Preparation and decision-making process

The Remuneration Committee prepares issues relating to remuneration for Duni’s senior executives based on the guidelines adopted by the AGM regarding remuneration for senior executives, and negotiates with the CEO regarding the latter’s salary.

The Remuneration Committee and its Chairman are appointed each year at the constituent Board meeting following election. The Committee comprises at least three of Duni’s directors, one of whom shall be the Chairman of the Board. Pursuant to Duni’s rules of procedure, the other members of the Remuneration Committee shall be independent in relation to the Company and company management. The CEO attends meetings of the Remuneration Committee, except when questions are addressed which relate to the CEO’s remuneration. The HR Director serves as secretary at meetings of the Remuneration Committee. The Remuneration Committee shall meet at least three times per year.

Duni’s Remuneration Committee is responsible for preparing issues concerning remuneration and other benefits for company management. Decisions are thereafter made by Duni’s Board. The Remuneration Committee also participates in the preparation of proposals regarding the adoption of any share-related incentive schemes within Duni. In 2017, the Remuneration Committee held three meetings at which minutes were taken.