At Intrum, we depend on our people to deliver on our ambitious goals in challenging environments. The objective of our remuneration philosophy is to ensure that our employees are rewarded for valuable contributions to our Company.
Our remuneration philosophy
At Intrum, we depend on our people to deliver on our ambitious goals in challenging environments. The objective of our remuneration philosophy is to reward employees for delivering work that is driving positive business results in line with or exceeding set targets. We also aim to attract, develop and retain talent in a competitive and international market by delivering competitive compensation to high performing employees. Furthermore, we aim to ensure that employees are offered a remuneration package aligned with local market conditions.
Remuneration in Intrum should reflect job complexity, responsibility and performance, and it should be competitive in comparison with similar companies within similar industries in the relevant geography. To ensure that we drive the right behaviors and focus our efforts in the right areas, performance is measured against goals that are closely linked to our business strategy and core values.
The total remuneration is based upon three main components; base salary, incentive programs in the form of variable salary part & long-term incentive programs, and pension. In addition hereto, other benefits, such as a company car, may be offered.
The individual base salary is based on three cornerstones: Job complexity & responsibility, performance and local market conditions.
Variable Salary Part
Our annual incentive program, Variable Salary Part, rewards the achievement of primarily financial business goals and drives short term performance, and hence it is set for one year at a time. The metrics are individually decided for each senior executive, in order to reflect the business strategy and our key focus areas. The evaluation metrics reflect business goals and enterprise value creation. In addition, the Variable Salary Part allows for our total remuneration costs to vary based on both business and individual performance.
The maximum pay out under the Variable Salary Part program is 50 percent of annual base salary for the CEO and 35 to 50 percent of the base salary for the other members of the Group Management Team though not offered to the Chief Risk Officer.
Long-term incentive program
Our long-term incentive program aligns the interests and perspectives of our senior executives with those of our shareholders and creates a close commitment to the Company. It rewards long-term value creation over a period of three years, and lets our senior executives share the success of the business. As we believe it to be the best indicator of our Company’s long term success, we generally use Earnings Per Share (EPS) as the measurement of value created. Similarly to the Variable Salary Part, it also allows for our total remuneration costs to vary based on business performance.
Long-term incentives are proposed to be offered in the form of shares and/or share-based instruments. The maximum initial allotment under the long-term incentive program is 150 percent of annual base salary for the CEO, CFO and CIO, and 35 to 50 percent of the base salary for the other members of the Group Management Team. Outcome from incentive programs is not pensionable income.
The costs for the incentive programs for the CEO and members of the Group Management Team during 2018 are estimated not to exceed MSEK 18 for the Variable Salary Part and MSEK 33 for the long-term incentive program, excluding social charges. These estimates do not take into account possible changes to the Group Management Team during the year.
To further promote ownership alignment and commitment among our group management team, we have put in place shareholding guidelines which stipulate that each senior executive is asked to hold a percentage of their annual gross base salary in Intrum shares – 100 percent for the CEO and 50 percent for other senior executives. Each senior executive has been given an amount of time (to be individually agreed) to build up his/hers shareholding unless not held already. The shares are to be held for as long as the senior executives are employed in the Company and members of the Group Management Team.
In case of termination of employment by Intrum, severance payments (if any) will not exceed twelve months’ base salary. The Board of Directors shall be entitled to deviate from these guidelines if special reasons for doing so exist in any individual case.