Chief Executive Officer and Group Management
The Chief Executive Officer, Johan Sjö, heads the operations in accordance with requirements of the Swedish Companies Act and the frameworks set by the Board. In consultation with the Board Chairman, the CEO prepares requisite documentation for information and decisions prior to Board meetings, gives presentations and motivates proposals for decisions. The Chief Executive Officer leads the work of the Group Executive Board and makes decisions in consultation with other members of Group Management. At the end of 2015/2016, in addition to Johan Sjö, Group Management included Anders Claeson, Åke Darfeldt, Johan Dyberg, Christina Kassberg and Niklas Stenberg. Group management regularly reviews operations in meetings chaired by the CEO. The Chief Executive Officer is presented in more detail in the Board and Management section of the annual report and on the Company’s website. At the close of the financial year Hans Andersén replaced Åke Darfeldt, who retired.
Remuneration to senior management
Principles for remuneration to senior management at Addtech are adopted by the Annual General Meeting. Senior management consists of the CEO and other people in Group Management. The 2015 AGM adopted the recommendations of the Nomination Committee regarding remuneration guidelines for senior executives. These guidelines are essentially consistent with the principles previously applied.
Addtech aim to offer a reasonable as well as competitive total remuneration package capable of attracting and retaining skilled individuals. The size of the overall package varies in relation to the performance of the employee and the Group and may comprise the different elements stated below. A fixed salary forms the foundation of the total remuneration. The salary should be competitive and reflect the responsibilities of the position. Fixed salaries are reviewed annually. Variable compensation is primarily based on the Group’s growth in earnings, profitability and cash flow. Annual variable remuneration can be at most 40 percent of the fixed salary. Each year the Board of Directors evaluates whether or not to propose a long-term incentive scheme to the Annual General Meeting and, if such is the case, whether or not the proposed long-term incentive scheme should include a transfer of shares in the Company. Retirement pension and sickness and other benefits should be structured in accordance with applicable rules and market norms. Pensions should be based on defined-contribution plans where possible.
For more details regarding remuneration to senior management, please see note 6 of the Annual Report. In 2015 the Company complied with the principles for remuneration to senior management as approved by the AGM and the principles proposed to the 2016 AGM are unchanged. Please see the Administration Report of the annual report for the Board’s complete proposals to the 2016 Annual General Meeting.
Long-term incentive schemes
Addtech has four outstanding call option programmes totalling 1,240,000 B shares. The purpose of long-term incentive schemes is to give management personnel within the Addtech Group the opportunity to learn about and work towards an increase in the value of the Company’s shares through their own investment. The schemes are also expected to create improved conditions for retaining and recruiting skilled personnel for the Addtech Group, to provide competitive remuneration and to unite the interests of the shareholders and the management personnel. The intention of the schemes is to contribute towards senior executives increasing their shareholdings in Addtech in the long term. Those members of management personnel included in the schemes are the group who, in an otherwise heavily decentralised organisation, are able to have a positive impact on profits through cooperation between the Group’s subsidiaries. The share-related incentive schemes approved by the AGM do not involve any net charge to the Company’s equity.
Remuneration to the board of directors and auditor
The AGM of Addtech AB resolves each year regarding guidelines for remuneration to the Board of Directors and the auditor. According to the resolution of the 2015 Annual General Meeting, Board fees for each director will remain unchanged from the previous year. The fees are as follows: SEK 500,000 to the Chairman of the Board, SEK 380,000 to the Vice Chairman of the Board and SEK 250,000 to each other director appointed by the AGM who is not employed by the Company. Total Board fees amount to SEK 1,880,000. No fee is paid for work on committees.
Audit fees will be paid according to approved invoice. For more details regarding audit fees and fees for nonauditing services please refer to the Note 7 of the annual report.
Operating organisation and management
As of 1 April 2015, Addtech’s operating companies have been organised in the five business areas Components, Energy, Industrial Process, Power Solutions and Life Science/AddLife. In March 2016 the Group’s shareholdings in AddLife were distributed through an IPO on Nasdaq Stockholm, after which four business areas remain.
Taken together the Addtech Group consists of approximately 120 independent companies in about 20 countries and acquisitions are an important component of the Group’s growth strategy. Decisions about the companies’ operations are taken close to the market, but from a governance perspective it is important to integrate the acquired company in certain issues of significance to the Group, such as financial reporting, administrative procedures and common core values.
Each operating company has a board of directors in which the company’s managing director and employees in managerial positions from business areas or business units are represented. Within each business area the companies are organised in business units linked to product or market concepts. Each company's chief executive officer reports to a business unit manager, who in turn reports to the business area manager. Each business area manager reports to the CEO of Addtech AB. The business areas and business units hold internal board meetings chaired by the CEO of Addtech AB and the managers of the business areas, respectively.