Remuneration of the Chief Executive Officer and other senior executives

Remuneration of the CEO is proposed by the Chairman of the Board and established by the Board within the framework of the prevailing guidelines. Remuneration of other senior executives is proposed by the CEO and approved by the Chairman of the Board.

Guidelines for determining salary and other remuneration of the Chief Executive Officer and other senior executives

The AGM on April 13, 2011 adopted the following guidelines.

The guidelines apply to the CEO and Group management, currently comprising 11 members (Group Management). The objective of the guidelines concerning salary and remuneration paid to Group Management is that NCC will be able to offer competitive market remuneration that enables the NCC Group to both recruit and retain people with the highest possible expertise. The remuneration payable to Group Management comprises a fixed salary, variable remuneration, pension and other benefits.

• Fixed salary. When determining the fixed salary, the individual executive’s sphere of responsibility, experience and achieved results shall be taken into account. The fixed salary is to be revised either annually or every second year.
• Variable remuneration. The variable remuneration must be maximized and related to the fixed salary, as well as being based on the outcome in relation to established targets, with financial targets accounting for by far the greatest proportion. The purpose of variable remuneration is to motivate and reward value-creating activities that support NCC’s long-term operational and financial objectives. For the President, variable remuneration is maximized to 50 percent of fixed salary, and for other members of Group Management to 40-50 percent of fixed salary. The variable remuneration is to be revised annually. It is estimated that the company’s undertakings in relation to the executives concerned will cost the company a maximum of SEK 23.8 M (22.5).
• Pensions. NCC is endeavoring to move gradually towards defined-contribution solutions, which entail that NCC pays contributions that represent a specific percentage of the employee's salary. In addition to basic pension, which is normally an ITP pension, members of Group Management who are active in Sweden are entitled to a defined-contribution supplementary pension for salary increments exceeding 30 income base amounts. The income base amount for 2011 is SEK 52,100. Members of Group Management who are active in another country are covered by pension solutions in accordance with local practices. NCC is endeavoring to achieve harmonization of the retirement age of Members of Group Management at 65 years.
• Other benefits. NCC provides other benefits to members of Group Management in accordance with local practices. The combined value of such benefits in relation to total remuneration should account for only a limited portion and correspond essentially to the costs normally arising in the market.
• Periods of notice and severance pay. Members of Group Management who terminate their employment at NCC's initiative are normally entitled to a 12-month period of notice, plus severance pay corresponding to 12 months of fixed salary. Any severance pay will be deducted from remuneration paid by a new employer during the said 12 months. The normal period of notice when employment is terminated at the employee's own initiative is six months.