Note 3 – Employees, personnel costs and executive remuneration

In this note, amounts are given in SEK thousands unless otherwise stated.

Average number of employees 2022 of whom men 2021 of whom men
Medelantalet anställda 2022 varav män 2021 varav män
Parent Company Moderbolag
Sweden Sverige 8 61% 8 61%
Total in the Parent Company Totalt i moderbolaget 8 61% 8 61%
Subsidiaries Dotterbolag
Sweden Sverige 273 89% 255 87%
Finland Finland 270 93% 255 94%
Estonia Estland 20 61% 20 54%
Latvia Lettland 4 59% 7 74%
Lithuania Litauen 4 95% 7 84%
Poland Polen 75 86% 69 91%
Total for subsidiaries Totalt i dotterbolag 646 89% 613 89%
Group total Koncernen totalt 654 89% 621 89%

Specification of gender distribution in Group management

2022 2021
Gender distribution, Group management Percentage women Percentage women
2022 2021
Könsfördelning i företagsledningen Andel kvinnor Andel kvinnor
Parent Company Moderbolag
Board Styrelsen 20% 20%
Other senior executives Övriga ledande befattningshavare 0% 0%
Group Koncern totalt
Board Styrelsen 10% 10%
Other senior executives Övriga ledande befattningshavare 0% 0%

Salaries, other remuneration and social security expenses

Group Koncern 2022 2021
Salaries and remunerations Löner och ersättningar 326,291 293,467
Pension expense, defined-contribution plans Pensionskostnader, avgiftsbaserade 9,983 10,885
Social security contributions Sociala avgifter 86,044 74,448
422,318 378,800
Parent Company 2022 2021
Salaries and remunerations  Social security expenses Salaries and remunerations Social security expenses
Moderbolag 2022 2021
Löner och ersättningar Sociala kostnader Löner och ersättningar Sociala kostnader
Parent Company Moderbolaget 12,299 5,957 11,392 6,418
(of which, pension expenses) 1) (varav pensionskostnad) 1) (2,226) (2,252)
1) Of the Parent Company’s pension expenses, 1,187 (1,232) KSEK refers to senior executives. There are no outstanding pension commitments.

Salaries and other remunerations distributed between the Parent Company and its subsidiaries and between senior executives and other employees 1)

2022 2021
Senior executives2)   Other employees Senior executives2)  Other employees
2022  2021
Ledande befattningshavare2)   Övriga anställda Ledande befattningshavare2)   Övriga anställda
Parent Company Moderbolag 6,913 5,386 6,614 4,778
(of which, bonuses, etc.) (varav tantiem o.d.) (1,415) (491) (1,308) (509)
Subsidiaries Dotterbolag 6,042 302,330 6,748 271,010
(of which, bonuses, etc.) (varav tantiem o.d.) (1,055) (13,418) (975) (12,731)
Group total Koncernen totalt 12,955 307,716 13,362 275,788
(of which, bonuses, etc.) (varav tantiem o.d.) (2,470) (13,909) (2,283) (13,240)
1) Salaries and other remuneration include base salary, supplementary vacation pay and variable remunerations.
2) Senior executives include Board members, members of Group Management and company presidents.

Defined benefit plans

Pension obligations for retirement pensions and family pensions for white-collar employees in Sweden are secured through an insurance policy provided by the independent insurance company Alecta. According to a statement (UFR 10) from the Swedish Financial Reporting Board, this is a multiple-employer defined benefit plan. For the financial year 2022, the company has not had access to information that would permit recognition of its proportional share of the plan’s commitments, plan assets and costs that meant that the plan could not be recognized as a defined-benefit plan. The ITP 2 pension plan secured through insurance provided by Alecta is accordingly recognized as a defined contribution plan. The premium for the defined-benefit retirement pension and family pension is calculated individually, depending on salary, already earned pension and anticipated remaining period of service. Anticipated fees for the next reporting period for ITP 2 insurance subscribed with Alecta amounts to SEK 4 M (7).

The collective funding ratio is comprised of the fair value of Alecta’s assets as a percentage of insurance obligations computed according to Alecta’s actuarial assumptions, which do not accord with IAS 19. The collective consolidation level shall normally be allowed to vary between 125 and 175 percent. If Alecta’s collective consolidation level is below 125 percent or exceeds 175 percent, action should be taken with the aim of creating conditions for the consolidation level to return to the normal interval. In the event of low consolidation, one action may be to raise the agreed price for new subscription and expansion of existing benefits. In the event of high consolidation, one action may be to introduce premium reductions. At the end of 2022, Alecta’s surplus expressed as the preliminary collective funding ratio amounted to 172 percent (172).

Defined contribution pension plans

The Group has defined contribution pension plans for employees in Sweden for which expenses are fully paid by the companies. Pension plans in Finland and other countries are treated as defined contribution plans. For defined contribution plans, pension contributions are paid to a pension insurance company and recognized as an expense in profit and loss for the accounting period in which they occur. There are defined contribution plans in other countries for which the expenses are paid partially by the subsidiaries and partially by employee contributions. Payments are made regularly to these plans according to plan rules.

Executive remuneration

Total remuneration to the President and CEO and other senior executives consists of base pay, variable remuneration, pension and other benefits. These remuneration components are based on the guidelines for executive remuneration adopted by the 2020 Annual General Meeting, which are detailed in the Corporate Governance Report.

The following tables provide details of actual remunerations and other benefits paid in financial years 2022 and 2021 to Board members, the President (who is also the CEO) and other senior executives. The latter are those individuals who, alongside the President and CEO, are members of Group Management.

1) Carina Andersson withdrew as board member in connection with the Annual General Meeting in April 2022.
2) Monika Gutén became board member in connection with the Annual General Meeting in April 2022.
3) Other senior executives consist of three persons.
4) Basic salary also include supplementary vacation pay.
1) Other senior executives consist of three persons.
2) Basic salary also include supplementary vacation pay.

Detailed below are the agreed terms for remuneration to the Board, the President and CEO and other senior executives. For an account of guidelines approved by the Annual General Meeting, see the Corporate Governance Report.

Board remuneration

The Chairman and other Board members are paid Board member fees as resolved by the Annual General Meeting. The Annual General Meeting resolved that Board member fees totaling SEK 1,380 thousands (1,260) will be distributed among the Board members as follows: SEK 460 thousands (420) to the Chairman of the Board and SEK 230 thousands (210) to each of the remaining Board members who are not employees of the company. In addition, remuneration of SEK 80 thousands (70) will be paid to the Chairman of the Audit Committé and SEK 40 thousands (40) for each of the other members of the Audit Committee. No fees are paid to members of the Remunerations Committee.

Remuneration to the President and CEO

Remuneration

In accordance with a decision by the Board of Directors, remuneration to the President and CEO normally takes the form of fixed cash salary, variable cash remuneration, pension benefits and other benefits. The fixed cash salary of the President and CEO amounted to SEK 2,520 M (2,280). For the President and CEO, maximum variable remuneration payable is 50 percent of the fixed cash salary. Potential bonus payments and the size of them are related to targets defined in advance and set by the Board.

Term of notice and severance pay

The President and CEO has a 9-month period of notice in the event of termination by the company and six months upon resignation. During the term of notice, the President and CEO is entitled to full pay and other benefits of employment, regardless of whether there is a duty to work or not. The President and CEO is not entitled to severance pay.

Pension benefits

For the CEO, pension benefits shall be premium defined. Variable cash remuneration shall not qualify for pension benefits. The pension premiums for premium defined pension shall amount to not more than 30 percent of the fixed annual cash salary.

Remunerations for other senior executives of the Parent Company and Group

Remuneration

Remuneration consists of fixed cash salary, variable cash remuneration, pension benefits and other benefits. The maximum variable remuneration payable to other senior executives is 50 percent of fixed cash salary. Whether or not bonuses are distributed and bonus amounts are determined by the CEO, after consultation with the Remuneration Committee, based on fulfillment of financial and individual targets.

Term of notice and severance pay

The notice period may not exceed twelve months if notice of termination of employment is made by the company. Fixed cash salary during the period of notice and severance pay may together not exceed an amount equivalent to the fixed cash salary for twelve months for the other senior executives. The period of notice may not exceed six months without any right to severance pay when termination is made by the executive.

Pension benefits

For other senior executives, pension benefits shall be premium defined. Variable cash remuneration shall not qualify for pension benefits. The pension premiums for premium defined pension shall amount to not more than 30 percent of the fixed annual cash salary.

Remuneration Committee

Please see the Corporate Governance Report for more information about BE Group’s preparation and decision process regarding executive remuneration.