The General Meeting has adopted the following guidelines for remuneration and other terms of employment for senior executives in RugVista Group, conditional upon the Company’s shares being admitted to trading on Nasdaq First North Premier.
Senior executives of RugVista Group, which consists of individuals who from time to time are part of the company’s executive management, fall within the provisions of these guidelines. The guidelines are forward-looking, i.e. they are applicable to remuneration agreed, and amendments to remuneration already agreed, after the guidelines have become effective in accordance with the General Meeting’s resolution. These guidelines do not apply to any remuneration decided or approved by the General Meeting.
To the extent that a member of the Board of Directors performs work for the company in addition to the Board assignment, these guidelines shall also apply to any other eventual remuneration (e.g. consultancy fees) for such work.
Types of remuneration, etc.
The remuneration shall be on market terms and may consist of the following components: fixed remuneration, pension benefits, and other benefits. Additionally, the General Meeting may – irrespective of these guidelines – resolve on, among other things, share-related or share price-related remuneration.
Fixed cash salary shall be based on market level conditions and shall be determined with regard to the individual executive’s responsibility, authority, competence, and experience.
Pension benefits, including health insurance, for the CEO shall be premium defined and the pension premiums shall amount to a maximum of 30 percent of the CEO’s fixed annual cash salary. Other senior executives shall be covered by ITP1 in accordance with the applicable collective agreement, or similar pension benefit. For executives covered by ITP1, the insurance premiums shall be based on executives’ fixed annual cash salary and other pensionable covered income in accordance with ITP1. ITP1 means that the company pays a premium of 4.5 percent of the executive’s pensionable covered income up to 7.5 income base amounts and 30 percent over 7.5 income base amounts. In addition, other senior executives may receive an additional premium defined pension provision in the form of a fixed monthly amount, which can amount to a maximum of 6 percent of the current fixed monthly cash salary when determining such provision for pension.
Other benefits may include, for example, life insurance, medical insurance, and company cars. Such benefits may not exceed more than 15 percent of the fixed annual cash salary.
Additional cash remuneration may be awarded in extraordinary circumstances, provided that such extraordinary arrangements are limited in time and only made on an individual basis, either for the purpose of recruiting or retaining executives, or as remuneration for extraordinary performance beyond the individual’s ordinary tasks. Such remuneration may not exceed an amount corresponding to 50 percent of the fixed annual cash salary and may not be paid more than once each year per individual. Any resolution on such remuneration shall be made by the Board of Directors.
Remuneration to members of the Board of Directors
In cases where a member of the Board of Directors performs services for the company in addition to the Board assignment, a special remuneration may be paid for this (consultancy fee) provided that such services contribute to the implementation of the company’s business strategy and the safeguarding of the company’s long-term interests, including its sustainability. The annual consulting fee must be on market terms and be put in relation to the benefit it brings to the company and may never exceed three times the applicable Board remuneration for each member of the Board of Directors. Remuneration to a member of the Board of Directors, as well as other conditions, is decided by the Board of Directors.
Termination of employment
Upon termination of employment, the period of notice may not exceed six months, unless otherwise is provided by mandatory law or collective agreement. Fixed cash salary during the period of notice and severance pay may together not exceed an amount equivalent to the fixed cash salary for fifteen months. The period of notice may not to exceed six months without any right to severance pay when termination is made by the executive.
Additionally, remuneration may be paid for non-compete undertakings. Such remuneration shall compensate for loss of income and shall only be paid in so far as the previously employed executive is not entitled to severance pay. The remuneration shall amount to not more than 60 percent of the fixed cash salary at the time of termination of employment, unless otherwise provided by mandatory collective agreement provisions, and be paid during the time the non-compete undertaking applies, however not for more than twelve months following termination of employment.
Salary and employment conditions for employees
In the preparation of the Board of Directors’ proposal for these remuneration guidelines, salary and employment conditions for employees of RugVista Group have been taken into account by including information on the employees’ total income, the components of the remuneration and increase and growth rate over time, in the Board of Directors’ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.
The decision-making process to determine, review, and implement the guidelines
The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and submit it to the General Meeting. The guidelines shall be in force until new guidelines are adopted by the General Meeting. The Board of Directors shall also monitor and evaluate programs for variable remuneration for the executive management, the application of the guidelines for executive remuneration as well as the current remuneration structures and compensation levels in the company. The CEO and other members of the executive management do not participate in the Board of Directors’ processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters.
Derogation from the guidelines
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.
At the Extraordinary General Meeting on March 18, 2021, shareholders decided to introduce a new incentive program (LTIP 2021) to be implemented in connection with the IPO, including the issue and subsequent transfer of a maximum of 860,000 warrants. The participants consist of 19 current and possible future senior executives and other key individuals within the RugVista Group. The participants are divided into four categories based on their position within the RugVista Group, whereby each participant may acquire a certain maximum number of warrants depending on which category the participant belongs to. Each warrant entitles the holder to subscribe to one (1) share in the company during the exercise period at a subscription price of SEK 162.50, which corresponds to 130 percent of the introductory price for the share on March 18, 2021. The exercise period for the subscription for shares may take place during the period of April 15, 2024 to June 15, 2024. The transfer price of the warrants has been determined by PricewaterhouseCoopers based on an estimated market value of the warrants at the time of the transfer using the Black & Scholes valuation model. The warrants are issued against cash payment of SEK 19.53 per warrant. If all warrants are subscribed and exercised for new subscriptions of shares, the share capital may increase by a maximum of SEK 43,000, which corresponds to a dilution effect of 4.1%.
At the General Meeting May 20, 2022 the shareholders resolved to implement a long-term share based incentive program (LTIP 2022), entailing an issue of a maximum of 300,000 warrants and approval of transfer of these warrants to current and potential future senior executives and other key employees within the Group. Each warrant entitles the holder to subscribe for one new share in RugVista Group at a subscription price corresponding to 130 percent of the volume weighted share price of the company’s share between May 30, 2022 and June 3, 2022. Subscription for shares by exercise of the warrants can be made during the period from June 1, 2025 to September 1, 2025. The maximum dilution effect of LTIP 2022 is approximately 1.42 percent.