Guidelines for remuneration to senior executives
On 23 February 2021, the annual general meeting resolved on the following guidelines for remuneration to senior executives to apply until further notice, however, no longer than until the annual general meeting 2025:
“Guidelines for remuneration to senior executives
These guidelines apply to remuneration to senior executives in the Company. For the purposes of these guidelines, senior executives include the CEO, the deputy CEO (if applicable), and certain other executives who, from time to time, are members of the Pierce Executive Team.
These guidelines do not apply to any remuneration resolved upon or approved by the general meeting and are only applicable to remuneration agreed, and amendments to remuneration already agreed, after the adoption of these guidelines by the annual general meeting 2021.
These guidelines constitute a frame for which remuneration to senior executives may be decided by the board of directors during the period of time for which the guidelines are in force.
Pierce’s business strategy is to develop, produce, and sell gear, parts and accessories for motorcycle riders through online stores. For further information regarding Pierce’s strategic priorities, please refer to the Company’s annual report and the Company’s website, www.piercegroup.com.
The Company’s remuneration principles shall be designed to ensure responsible and sustainable remuneration decisions that support the Pierce’s business strategy, long-term interests and sustainable business practices. Pierce strives to offer a total remuneration that is in line with market terms and thus enables the Company to attract and retain qualified employees. Total remuneration varies in relation to the individual’s responsibilities and performance.
Remuneration for senior executives under employments subject to other mandatory rules than Swedish must be duly adjusted to comply with such rules and may be duly adjusted to comply with established local practice, taking into account, to the extent possible, the overall purpose of the guidelines.
Elements of remuneration
The remuneration to the senior executives covered by these guidelines may consist of a fixed salary, variable remuneration, long-term incentives in the form of equity-related instruments and additional benefits and pension.
Principles for fixed cash salary
The fixed salary forms the basis of the total remuneration and shall be in line with market conditions, be competitive, and reflect the responsibilities associated with the position as well as the individual’s competence and performance. The fixed salary is reviewed annually.
Principles for variable cash remuneration
The variable cash remuneration is to be in line with market terms, capped, and linked to the fixed remuneration. Variable cash remuneration may amount to a maximum of 40% per cent of the fixed cash salary for each senior executive (in this context, fixed salary means cash salary earned during the year, excluding pension, benefits and similar). Variable cash remuneration shall be based on predetermined and measurable performance results in relation to annual targets aimed at promoting Pierce’s long-term value creation. The fixed salary and the variable remuneration to the CEO and the Executive Team are reviewed and approved by the Board of Directors annually. To which extent the performance results for awarding variable cash remuneration have been satisfied shall be determined when the relevant measurement period of the performance results has ended. The remuneration committee of the board of directors is responsible for the evaluation of the variable salary to the CEO and the other members of the Executive Team. The Board will approve any variable pay-outs to the CEO and the Executive Team.
Variable cash remuneration is not pensionable unless mandatory by law or by applicable collective bargaining agreements.
Principles for long-term incentives
Long-term incentives shall be in the form of shares or equity-related instruments, promoting a balance between short-term achievements and long- term thinking. Long-term incentive programs shall ensure a long-term commitment to the development of Pierce. Any share or equity-based incentive programs shall be resolved upon by the general meeting.
Principles for termination and severance pay
In the event of termination of employment, the notice period should be in line with market terms and is not to exceed a 12-month period of notice and 6 month’s severance pay when the termination is initiated by Pierce. When termination is initiated by the senior executive there should be no severance pay. Fixed salary during notice periods and severance payment, including payments for any restrictions on competition, shall in aggregate never exceed an amount equivalent to the fixed salary for two years.
Principles for pension and non-financial benefits
Pension benefits may not amount to more than 30 per cent of the fixed cash salary of each senior executive, provided that mandatory provisions of applicable collective bargaining agreements do not require a higher pension provision.
Pension benefits shall, wherever possible, only include defined contribution plans, provided that mandatory provisions of applicable collective bargaining agreements does not require otherwise.
Other non-financial benefits may be provided to individuals or all senior executives and are to reflect market practice. Premiums and other costs relating to non-financial benefits may not amount to more than 15 per cent of the fixed cash salary of each senior executive.
Preparation and review of these guidelines
These guidelines have been prepared by the board of directors’ remuneration committee. The remuneration committee shall have a preparatory function, in relation to the board of directors, in respect of principles for remuneration and other terms of employment regarding the senior executives. With the recommendation of the remuneration committee as the basis, when the need arises for significant changes in the guidelines, but at least every fourth year, the board of directors shall prepare a proposal for guidelines for resolution by the annual general meeting. The annual general meeting shall decide on such proposals. Resolved guidelines may also be amended by way of resolution by general meetings other than annual general meetings.
Within the scope and on the basis of these guidelines, the board of directors shall, based on the remuneration committee’s preparation and recommendations, annually decide on specific revised remuneration terms for each senior executive and make such other resolutions in respect of remuneration for senior executives that may be required.
The members of the remuneration committee are independent in relation to the Company and the senior executives. The CEO and the other senior executives do not participate in the board of directors’ handling of and resolutions regarding remuneration-related matters if they are affected by such matters.
Derogations from these guidelines
The Board of Directors has the right to temporarily resolve to derogate from these guidelines, in whole or in part, if there is an individual case with special grounds for such 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. The guidelines do not take precedence over compulsory conditions in accordance with labor legislation or collective agreements.”
Share and share price-related based incentive programs
Details of currently outstanding share and share price-related incentive programs in the Company can be found in the company’s listing prospectus under the section “Share capital and ownership structure”.