Remuneration

Remuneration and other benefits 2023

1) Other benefits comprises company car and insurance (excluding pension insurance). Expenses during 2023 for all share programmes amounts to 0.9 MEUR for the President and CEO and to 6.1 MEUR for Other senior executives (current and former)
2) Including costs for senior executives who acceded and resigned their positions during the year. Former Executive Vice President is included in Other senior executives, more detailed information on remuneration to the former Executive Vice President can be found in the Remuneration Report 2023

Principles

The following is a summary of the principles for remuneration to senior executives in Hexagon adopted by the Annual General Meeting (AGM) 2024. The full proposal of the Board of Directors on guidelines for remuneration to senior executives can be found here.

The remuneration shall be on market terms and consist of fixed salary, variable remuneration, other benefits and pension. Additionally, the general meeting may – irrespective of these guidelines – resolve on, among other things, share-related or share-price related incentive programmes. The satisfaction of criteria for awarding variable cash remuneration shall be measured over a period of one year. The variable cash remuneration is capped and shall be maximised at up to 150 per cent of the fixed annual cash salary. The variable remuneration is based on results and other financial targets, such as organic growth and the cash conversion target rate. The design of the criteria for variable cash remuneration contributes to the company’s business strategy, long-term interests and sustainability.

The guidelines for remuneration are applicable until the AGM 2028, provided that no changes are proposed before then. The guidelines are applicable to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the AGM 2024. The Board of Directors may temporarily resolve to derogate from the guidelines, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the company’s long-term interests, including its sustainability, or to ensure the company’s financial viability.

Remuneration of Group Management

Remuneration to the President and CEO, as well as other senior executives, comprises fixed salary, variable remuneration, other benefits and pension. The variable remuneration is based on results and other financial targets, such as organic growth and the cash conversion target rate. Pensions and other benefits received by the President and CEO and other senior executives are paid as part of their total remuneration. The President and CEO of Hexagon AB did not receive any director fees in 2023.

Remuneration of Board of Directors

Remuneration to the Board of Directors is resolved by the AGM upon proposal from the Nomination Committee. During 2023, the Chair of the Board and Board Members received remuneration totalling 636.8 KEUR.

Remuneration of External Auditors

Remuneration for services in addition to auditing services primarily refers to work related to acquisitions and tax.

Pension

Pension expense comprises defined-contribution pension schemes and is the expense affecting earnings for the year. The President's and CEO’s pension premiums are payable at 20 per cent of pensionable salaries. Pension premiums for other the senior executives are not higher than 25 per cent of pensionable salary. Pensionable salary means basic salary. The pension age for senior executives is individual, however, not lower than 60 years

Severance Pay

The notice period for the President and CEO is six months. Upon termination by the company or in case of a change of principal ownership the President and CEO is entitled to severance pay equal 18 months of salary. The notice period for other senior executives is a maximum of 24 months upon termination by the company and a maximum of six months upon termination by the senior executive. Basic salary and other employment benefits during the notice period may together with severance pay not exceed an amount equivalent to the basic cash salary for 24 months. When the employment is terminated by the senior executive, no severance pay shall be paid.