CEO and Management Team
As a consequence of the acquisition of Ahold’s shares in ICA the Company became the Parent Company of the ICA Group and ICA AB’s operational work thereby became assimilated into the Company. In view of ICA AB’s dominant significance for the Company and the fact that the Company has basically been changed from an investment company into the Parent Company of the Group, the former management of the Company – with the exception of Stein Petter Ski (responsible for the Portfolio Companies) – was replaced by the former management of ICA AB, i.e. the former Parent Company of the ICA Group.
CEO Per Strömberg is responsible for the day-to-day management of the Company in accordance with the guidelines and instructions issued by the Board. In dialogue with the Chairman of the Board, the CEO also compiles an agenda for Board meetings and is responsible for providing the meetings with information documents and material providing a basis for decisions. In addition, the CEO must ensure that the members of the Board receive information on ICA Gruppen’s performance in order that they may make well-founded decisions. The Board has approved Per Strömberg’s significant assignments and financial commitments outside the Company, such as assigment as board member in Almondy Group Holding AB, Childhood Foundation, En Frisk Generation and Segulah Advisor AB. The CEO has no significant shareholdings or proprietary involvement in companies with which the Company has significant business links. An assessment of the CEO was carried out by the Board in 2013 without management being present.
The Company has 11 Group functions: Corporate Communication, Strategy & Business Development, HR & ICA School, Legal, Corporate Security, Enterprise Risk Management, Accounting, Treasury & Tax, Group IT, Internal Control and Internal Audit.
ICA Management Team
Alongside CEO Per Strömberg, the members of the ICA Management Team (IMT) are ICA Gruppen’s CFO, SVP HR & ICA School, SVP Portfolio Companies, SVP Strategy & Business Development, SVP Corporate Communication and the CEOs of the various operating companies/segments (ICA Sweden, ICA Norway, Rimi Baltic, ICA Real Estate, ICA Bank, ICA Special). The IMT meets regularly to discuss matters including corporate governance, reporting and strategy. In addition, the IMT prepares matters that the rules of procedure state require a decision by the Board and assists the CEO with implementing decisions made by the Board. In addition to their collective responsibility for the management of the Company, each member of the IMT has individual responsibility for his or her respective area of the Company. To support the IMT’s work the IMT has set up five committees: the Audit Summary, Reward Group, Business Ethics and Policies Committee, Retail Investment Committee and Enterprise Risk Manage-ment (ERM) Steering Committee. At the beginning of each financial year the IMT assesses its work, focusing on the quality of decisions, agendas, the meeting structure, effectiveness and the IMT’s overall performance.
Remuneration to senior executives
The Company’s guidelines for remuneration to senior executives, adopted at the AGM 2013, state that the remuneration packages are to be in line with market terms for senior executives in similar sectors and are aimed at recruiting, developing and retaining senior executives with relevant experience and expert leadership qualities. The remuneration principles are also to motivate senior executives to enhance the Group’s market position and earnings, and are to be linked to long-term growth in shareholder value. In addition, variable remuneration is to be linked to quantifiable criteria set in advance. The levels of remuneration paid to senior executives in related industries and markets is continually investigated and assessed. The total remuneration is to comprise the following components: basic salary, pension benefits, bonus, other remuneration and benefits, and severance pay.
The basic salary is to be on market terms and based on skills, responsibility and performance.
For the CEO and other senior executives a defined contribution pension plan is to be applied, with pension premiums amounting to a maximum of 35% of pensionable salary (not including bonuses). Premiums are to be paid as long as the person is employed in the Company. Executives employed in countries other than Sweden and members of Executive Management have pension agreements in line with national practice and which abide by the above principles1.
The CEO and other senior executives in the company shall be included in two variable remuneration schemes taking the form of a cash bonus, one of which runs for one year and the other for three years . The size of the combined bonus is maximised per person and year at the equivalent of 50 per cent of annual salary (100 per cent for the CEO). The bonus is not pensionable. Payment of bonus is to be contingent upon the participants’ employment not being terminated during the term of the programme. The Board of Directors has the right to adjust the bonus system in the case of, for example, extraordinary increases or decreases in the Group’s earnings.
Annual bonus programme
A cash-based bonus programme linked to the budget for each financial year and maximised at 25% of annual salary (50% for the CEO and the current CEO of ICA Bank). The targets for the bonus programme are determined by the Board of Directors ahead of each new financial year and individual bonus agreements are to be signed with each participant. The content of the agreements depends on the participant’s position at the time of signing. The targets must be objectively quantifiable and related to the budget.
Long-term bonus programme
A cash-based, three-year incentive programme linked to value creation within the Group and maximised at 25% of annual salary (50% for the CEO). The current CEO of ICA Bank AB is not included in this incentive programme. The targets for the incentive programme must be objectively quantifiable and decided upon by the Board, and must be linked to both absolute and relative performance criteria. Fulfilment of the absolute performance criteria accounts for 40% of the maximum outcome and the relative performance criteria account for the remaining 60%.
Notice of termination and terms of severance pay
A mutual notice period of six (6) months is to apply to senior executives. Severance pay to senior executives is to be paid at up to 18 months of basic cash salary if the Company terminates employment. The severance pay will be deductible. If it is the executive that terminates the employment and the Company decides to apply a non-competition clause which has been agreed in certain cases, the Company will provide compensation during the period the non-competition clause applies at a maximum amount of 60% of basic salary. Severance pay and compensation paid during the non-competition period will not be pensionable2.
Other remuneration and benefits
Other remuneration and benefits are to be of limited value in relation to the total remuneration and are to correspond to the market norm.
Deviation for good reason
The Board has the right to deviate from the guidelines proposed above if there is particular reason to do so.
Proposal to the 2014 Annual General Meeting
The Board of Directors proposes to the 2014 Annual General Meeting that the principles described above, which were adopted at the 2013 AGM, be adopted again with the following additions/adjustments:
Definition senior executive
The term senior executive refers to the CEO of ICA Gruppen and the executives who report directly to the CEO and who are part of the ICA Management Team (IMT). However, the definition refers to the same group of people.
Annual bonus programme
The maximum outcome of the annual bonus programme may under exceptional circumstances amount to, with respect to the CEO 54% and for certain senior executives 27%. The targets have also been adjusted.
Long-term incentive programme
Fulfilment of the absolute performance criteria accounts for 60% of the maximum outcome and the relative performance criteria account for the remaining 40%. The targets have also been adjusted.
Share investment programme
For the purpose of increasing the senior executives’ identification with and interest in the Company and its value growth, the Board is proposing that the Board will determine on an annual basis that the senior executives will be expected to invest between 5% and 10% of their fixed gross salary in shares in the Company. Contingent upon services rendered in return, it is proposed that, after one year, they will be entitled to receive a net cash amount from the Company corresponding to 50% of the invested capital.
More information on basic salaries and variable remuneration can be found on the Company's website, in the Board’s statement on the Remuneration Committee’s evaluation in accordance with section 9.1 of the Swedish Corporate Governance Code, the Notice to AGM and in Note 4 for the Group.
1) A few senior executives with contracts signed previously are entitled to retire at the age of 62 with a defined-benefit pension plan for the period until the normal retirement age of 65.
2) There are exceptions to the notice period, severence pay and deduction clause in a few agreements entered into before the 2013 Annual General Meeting.