Axfood shall offer compensation that is in line with the going rate in the market and is based on factors such as the importance of the work duties and the executive’s expertise, experience and performance.
The compensation may consist of fixed base salary, short-term variable compensation, long-term share-based incentive programme, pension, other benefits and severance terms.
The guidelines for compensation and other terms of employment for the President and other senior executives were adopted by the Annual General Meeting on 18 March 2020, based on the Board’s recommendations.
Fixed base salary
Members of the Executive Committee shall have a cash base salary that is attractive in comparison with the market. Base salary constitutes compensation for a committed work contribution at a high professional level, which creates value-added for Axfood’s customers, owners and employees.
Short-term variable cash compensation shall be based on the achievement of Axfood’s targets for earnings and sales growth as well as on the individual’s personal goals for the financial year. Short-term variable compensation shall amount to a maximum of 60% of base salary paid out during the year for the President and 50%–55% of base salary paid out during the year for the other members of the Executive Committee. During 2019 the combined short-term variable compensation for the current members of the Executive Committee can amount to a maximum of approximately SEK 16.5 m. In the event the Executive Committee is expanded, the level of variable compensation may exceed this amount. The right to variable compensation is forfeited in cases where an executive gives notice prior to the end of the vesting year.
Long-term variable compensation shall be payable through participation in a long-term share-based incentive programme (LTIP) that is approved by a general meeting of shareholders. The aim of an LTIP is to align the shareholders’ and participants’ interests in achieving maximum long-term value creation for Axfood.
The 2017, 2018, 2019 and 2020 Annual General Meetings each resolved to implement long-term share-based incentive programs, LTIP 2017, LTIP 2018, LTIP 2019, and LTIP 2020, respectively. Participation in an LTIP requires a personal shareholding in Axfood. A grant of shares requires that the participant continues to be employed in the Axfood Group, continues to have a shareholding in Axfood, and that certain performance targets are met.