G4 Personnel information and remuneration of management

Personnel information is based on Group total.

Average number of employees

Wages, salaries and other remuneration and social costs

A total of SEK 34 million (50) of the Group’s pension costs relates to Boards and presidents. The Group’s pension liability to these persons amounted to SEK 189 million (254).

Wages, salaries and other remuneration by market area

Gender distribution in senior management

Remuneration to the board of directors

Fees to the Chairman and other external Board members are paid in accordance with the resolution at the Annual General Meeting. No Board fees are paid to the President and the employee representatives. In accordance with the resolution of the 2023 Annual General Meeting, the total fee to the external Board members elected at the Meeting amounts to in total SEK 7,495,000 on an annual basis.

The long-term asset manager and largest shareholder of Sandvik shares, Industrivärden, granted in 2019 the Chairman of the Board one million call options over Sandvik shares with a five-year term and an exercise price of SEK 177. The options were purchased by the Chairman of the Board at market price and exercised in 2023.

President and other senior executives

Guidelines for remuneration

For information on the current guidelines for remuneration of senior executives, adopted by the 2020 Annual General Meeting, please refer to the Directors' report.

President and CEO

Sandvik’s President and CEO, Stefan Widing, was paid an annual fixed salary of SEK 15,490,824 and received a fringe benefit value of a car provided by the company. In addition, an annual variable cash based salary of maximum 75 percent of the fixed salary is payable. The variable salary for 2023 amounted to SEK 9,294,494, being 80 percent of the maximum amount.

Stefan Widing is entitled to retire at age 65. A pension premium of 37.5 percent of his annual fixed salary is reserved annually.

In the event of termination of employment by the company, Stefan Widing has a notice period of 12 months and 12 months’ severance pay.

Other senior executives

The majority of the Group Executive Management members are covered by a Swedish pension plan (either ITP1 or ITP2), one member a Swiss pension plan and one member a salary supplement scheme in the UK. The minimum retirement age is 62.

For members that are covered by the ITP plan 1 (defined contribution), a supplement of 5 percent of the salary portions in excess of 7.5 income base amounts may apply.

For members that are covered by the ITP Plan 2 (defined benefit), a supplementary defined-contribution plan applies under which the company each year contributes 25–33 percent (depending on age and length of time in Group Executive Management) of fixed salary portions in excess of 20 price base amounts. Under the Swiss pension plan a pension premium of 21 percent of fixed salary is paid, whereof 75 percent is paid by the company and 25 percent by the employee. One member is covered by a UK salary plan amounting to 12 percent of the fixed salary.

Severance pay is paid in the event that the company terminates employment. The severance pay equals 6–12 months fixed salary in addition to the notice period, which is 6–12 months. Any other income from employment may be deducted from the severance pay.

External remuneration market data for benchmarking is used as guidance. No sign-on bonus nor other extra incentive payments have been paid in 2023 to new members of the Group Executive Management.

Long-term incentive programs (LTI)

Share-based incentive program 2020–2023

The 2020–2023 Annual General Meetings approved the Board’s proposal to adopt a performance share program for each year for a maximum 350 senior executives and key individuals in the Sandvik Group, divided into four categories. For all participants, a personal investment is required in each separate program and the programs encompass a grant of a maximum total of 4,101,757 shares.

All program participants have invested in Sandvik shares (“investment shares”), up to an amount corresponding to 10 percent of their fixed annual pre-tax salary at the time of the investment.

Performing shares

In LTI 2020–2023, provided certain performance targets are met, Sandvik shares may be allotted (“performances shares”). The maximum number of performance shares that may be allotted for each acquired investment share depends on the category to which the participant belongs.

The number of performance shares that will finally be allotted to the participant for each acquired investment share is dependent on the development of the Sandvik Group LTI adjusted Earnings Per Share (“EPS”) during the financial year that the investment shares were acquired, compared to adjusted EPS for the previous financial year.

In January 2020–2023, the Board of Directors established the levels regarding adjusted EPS for the performance year in question that have to be attained for allotment of a certain number of performance shares.

Performance outcome 2020–2023

LTI 2020: No performance shares were allotted since the performance targets set by the Board of Directors were not met. LTI adjusted EPS for the financial year 2020 amounted to SEK 8.74. This means that there will be no allotment of shares under LTI 2020.

LTI 2021: Performance shares will be allotted since the performance targets set by the Board of Directors were met. The LTI adjusted EPS for the financial year 2021 amounted to SEK 11.07.

LTI 2022: Performance shares will be allotted since the performance targets set by the Board of Directors were met. The LTI adjusted EPS for the financial year 2022 amounted to SEK 12.89.

LTI 2023: Performance shares were partly allotted since the performance targets set by the Board of Directors were partly met. The adjusted EPS for the financial year 2023 amounted to SEK 14.04.

The number of allotted performance shares under the 2020–2023 LTI programs for the President and other members of the Group Executive Management on December 31, 2023, corresponds to the number of outstanding performance shares at year-end.

The allotments of performance shares in ongoing programs requires continuous employment and that all investment shares are held during a period of three years from the acquisition of the investment shares.

Costs for the programs

The following IFRS 2 provisions were established during the year:

For LTI 2021, SEK 35.1 million (excluding social costs), of which SEK 7.9 million for the President and CEO and other senior executives.

For LTI 2022, SEK 66.8 million (excluding social costs), of which SEK 9.7 million for the President and CEO and other senior executives.

For LTI 2023 SEK 86.5 million (excluding social costs), of which SEK 5.3 million for the President and CEO and other Senior Executives.

Preparation and decision-making process

The Board’s Remuneration Committee prepares issues relating to the Group Executive Management’s remuneration. The Committee met three times during the year. Items dealt with included the distribution between fixed and variable salary, the magnitude of any pay increases and both the short-term and long-term variable incentive programs.

The Board discussed the Remuneration Committee’s proposals and made a decision, using the Committee’s proposal as a basis. Based on the Remuneration Committee’s proposals, the Board decided on the remuneration of the President for 2023. The President decided on remuneration to other senior executives after consultation with the Remuneration Committee. The Remuneration Committee performed its task supported by expertise on remuneration levels and structures. For information on the composition of the Committee, refer to the Corporate Governance Report.