The 2020 Annual General Meeting adopted the following principles of remuneration for Fingerprint Card AB’s Executive Management. The Executive Management is defined as the Chief Executive Officer and other members of the management team. The purpose of these guidelines is to clarify the compensation as decided.
The guidelines are forward-looking, i.e. they are applicable to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the annual general meeting. The annual general meeting has the right to agree on additional remunerations outside of these guidelines.
2. Remuneration Committee
The remuneration committee evaluates and considers matters regarding remuneration and employment terms and prepares proposals for guidelines for compensation to the CEO and executive management. The board of directors shall evaluate a proposal for new guidelines at least every fourth year and submit it to the AGM. The guidelines shall be in force until new guidelines are adopted by the general meeting. The Remuneration Committee should ensure that remuneration is commensurate with prevailing market conditions for corresponding executives in other companies, and accordingly, that the company’s offering to its employees is competitive. The CEO’s compensation is approved by the Board of Directors. Compensation to other senior executives is decided by the CEO after consulting with the Remuneration Committee. The members of the remuneration committee are independent of the company and its executive management. 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.
3. Remuneration Principles and the guidelines’ promotion of the company’s business strategy, long-term interests and sustainability
Fingerprint Cards aims to attract, engage, develop and retain the right people to drive our business result in line with the company’s business strategy. In order to support this, the design and implementation of our remuneration structure shall be performance based; affordable; sustainable; market driven and clear. Compensation shall reflect the scope and complexity of each role, as well as the actual performance of the individual. Fingerprint Cards does not tolerate any form of discrimination and we perform annual reviews to make sure we do not have any salary misalignments based on any discriminating factors such as gender, transgender identity or expression, ethnicity, religion or other belief, disability, sexual orientation and age.
Variable remuneration covered by these guidelines shall aim at promoting Fingerprint Card’s business strategy and long-term interests, including its sustainability.
For more information regarding the company’s business strategy, please see www.fingerprints.com.
Remuneration under employments subject to other rules than Swedish may be duly adjusted to comply with mandatory rules or established local practice, taking into account, the overall purpose of these guidelines.
There shall be a strong link between performance (individual - and business result) and compensation. Base salary will depend on the employee’s performance against objectives, development progress and living our company values.
Competitive and Sustainable:
We must create value to secure our present and future capability to pay competitive compensation and we must earn the means for our compensation. It is important to have a balance between our company earnings and our compensation levels.
Our salaries shall reflect the scope and complexity of the work. It is our objective to compare our base salaries with relevant market data for the applicable country. Each country forms its own market.
The remuneration principles are also applicable to the rest of the employees at Fingerprint Cards.
In the preparation of the board of directors’ proposal for these remuneration guidelines, salary and employment terms for employees of the company 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 remuneration committee’s and the board of directors’ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.
4. Total Remuneration
The total remuneration to Executives consists primarily of monthly base salary, short-term incentives, pension, and insurances. If decided in the Annual General Meeting, the total remuneration may also include – irrespective of these guidelines – long term incentives.
4.1 Short Term Incentives (STI)
Short Term Incentives shall be linked to predetermined and measurable criteria. The Short-Term Incentives include company measures such as Revenue, Operating Profit and Cash Balance. For Executives, 80-90% of the STI is based on company measures, and 10-20% is based on individual performance, with predetermined targets on an annual basis. The criteria shall be designed so as to contribute to Fingerprint Card’s business strategy and long-term interests, including its sustainability.
The satisfaction of criteria for awarding STI shall be measured over a period of one or several years. The variable cash remuneration may amount to not more than 100 per cent of the total fixed base salary during the measurement period.
For financial objectives, the evaluation shall be based on financial information made public by the company.
Pension plans are based on defined contribution models, where a premium is paid amounting to not more than 30 per cent of the Executive’s fixed annual base salary.
Executives are provided insurance coverage in accordance with local market practice. Such benefits shall be customary and be of limited amount.
4.4 Termination of employment
Upon termination of an employment, the notice period may not exceed six months. During the notice period, the executive will continue to receive full base salary and other employment benefits. Upon termination by the company, severance payment could be paid and may not exceed twelve months’ base salary. When termination is made by the executive, the notice period may not exceed six months, without any right to severance pay.
Additionally, remuneration may be paid for non-compete undertakings. Such remuneration, if applicable, shall amount to a maximum of sixty per cent of the monthly base salary at the time of termination of employment, unless otherwise provided by mandatory collective agreement provisions.
4.5 The Board of Directors’ right to deviate from the principle of remuneration
In certain cases the Board of Directors may decide to deviate from these guidelines, in part or in total, if there are special reasons to do so in an individual case and a deviation is necessary to fulfill the company’s long term interest, including in relation to sustainability, or to safeguard the company’s financial position. As set out above, the remuneration committee’s tasks include preparing the board of directors’ resolutions in remuneration-related matters. This includes any resolutions to derogate from the guidelines.
The AGM resolved to pay the Board of Directors fees totaling SEK 2,245,000, of which SEK 625,000 to the Chairman of the Board and SEK 270,000 to each other Board member.
Fees for work on committees will be payable in an amount of SEK 370,000, to be distributed as follows:
Audit Committee: SEK 115,000 to the Chairman and SEK 60,000 to each other member.
Remuneration Committee: SEK 65,000 to the Chairman and SEK 35,000 to each other member.