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Remuneration to senior executives

Compensation and benefits for
the Group Executive Committee1)		 President Other Group
Executive Committe
 SEK millions  2023 2022 2023 2022
 Fixed salary 2)   14.1   13.6   12.9   39.7
 Other benefits 3) 

 0.4

 		 0.4 0.4 2.3
 Short-term variable salary 4)  7.1 4.9 0.0 12.3
 Long-term variable salary  4)  2.6 2.1  1.0  8.3 
 Total compensation  24.2 21.0 14.3 62.6
 Social security  7.6 6.6  4.5  9.9 
 Pension expenses  6.3 6.1 5.8 14.4
 Total  38.1 33.8  107.4  86.9 
1) Includes 11 (11) members of the Group Executive Committee for the full year.
2) Includes payment of SEK 0.3 (0.3) million to the President in respect of vacation compensation, as well as SEK 0.3 (0.3) million cost-compensation related to company residence.
3) Relates primarily to housing and car benefits.
4) The payments relate to compensation earned in the previous year. The compensation for 2023 is not known at the end of the accounting year as comparisons are made to the competitors who have not yet reported their figures. Also, as the Board of Directors can decide to reduce the compensation for special reasons, the compensation is reported in the year when the payment has taken place. Accrued variable salary components for 2023 for the entire Group Executive Committee amounted to SEK 56.2 (41.0) million.

Compensation for the Group Executive Committee members

Guidelines for remuneration of the Senior Executives are included in the Board of Directors' Report. The remuneration for the President is further discussed in the Remuneration Report. Compensation to the President and other members of the Group Executive Committee consists of a fixed salary component, a short-term variable salary component, and a long-term variable salary component.


Short-term variable compensation

The short-term variable salary component for 2022 (paid in 2023) is related to: A) three Group objectives, 1) EBITDA margin compared to peer group (Arcelor Mittal Europe, BE Group, JFE, Kingspan, Klöckner, Lindab, Nucor, Salzgitter, Tata Steel Europe, US Steel and Voestalpine), 2) net operating working capital in relation to sales and 3) a sustainability objective measuring injury frequency, combined with B) divisional financial and operational objectives.

For the President, the individual objectives account for 15% of the total short term variable pay whereas the other 85% relate to SSAB Group Objectives. For Executive Vice Presidents of Group functions, the Group objectives account for 100%, and for divisional Executive Vice Presidents the Group objectives account for 40% and divisional objectives for 60%.

The short-term variable salary component is capped at 75% of base pay for the President and at 50% for others, except for the divisional head of SSAB Americas, who receives variable compensation competitive in the local market: Meeting the targets result in variable pay of 60% of base pay whereas extremely good performance may amount to a maximum of 180% of base pay. In 2023, the outcomes of the short-term variable compensation in relation to base pay were on cash-basis as follows: 54,5% (39,8%) for the President and on average 49,0% (33,9%) for the other Group Executive Committee members. 

Compensation to employees

 

Long-term variable compensation

A long-term incentive program covers selected key persons throughout the Group, including the company’s President and other senior executives. The purpose of the program is to promote the company’s ability to recruit and retain key contributors.
Long-term incentive programs
Program  2023 - 2025  2022 - 2024   2021 - 2023  2020 - 2022
Maximum number of participants   160 150 150 150
Paid in Cash in 2026 Cash in 2025 Cash in 2024

Cash in 2023
Earnings criteria 1) 2) 3)  SSAB Total Shareholder Return compared with Benchmark TSR portfolio & Total sales of emission free products. SSAB Total Shareholder Return compared with Benchmark TSR portfolio SSAB Total Shareholder Return compared to Peer Group & ROCE SSAB Total Shareholder Return compared to Peer Group & ROCE
Earnings cap, senior executives 4) 40% of base pay 35% of base pay  25% of base pay 25% of base pay
Earnings cap, other participants 4)  30%–20% of base pay 30%–20% of base pay 20%–15% of base pay 20%–15% of base pay
Estimated maximum annual cost including social fees, SEK million 5)  160  120 79 80
Realized payout at program end 6)   n/a n/a n/a  92.5%
1)Reference group includes ArcelorMittal, Nucor, Salzgitter, ThyssenKrupp and US Steel for programs 2020 and 2021.
2) Benchmark portfolio TSR is calculated as 70% of steel peer group average (ArcelorMittal, JFE, Nucor, Salzgitter, ThyssenKrupp, US Steel, Voestalpine) and 30% of Stockholm OMX30 Index for program 2022.
3) Benchmark portfolio TSR is calculated as 70% of steel peer group average (ArcelorMittal, Nucor, Salzgitter, ThyssenKrupp, US Steel, Voestalpine) and 30% of Stockholm OMX30 Index for program 2023.
4) For participants in North America, the programs are also linked to SSAB Americas' results and return on capital employed, and the earnings cap is 20%–90% of fixed salary for programs 2020 and 2021, and 24%–108% for programs 2022 and 2023.
5) Annual cost accrual is based on continuous assessment of the outcome for the three-year period.
6) For participants in North America, the realized payout was 101.3% for program 2020.

Termination of employment and retirement

For the President and other Group Executive Committee members, the notice period is 12 months in the event of dismissal by the company. In addition, in such situation, severance compensation equals to 12 months’ salary for the President and 6 months’ salary for the other members. In the event of resignation by the President or another Group Executive Committee member, the termination period is 6 months and there is no entitlement to severance compensation. The President earns variable compensation during the termination period only by remaining in active service.
The President’s retirement age is 65. The pension is based on contributions and is covered by insurance, and in 2023 the cost amounted to 45% (45%) of fixed salary. Earned pension is inviolable but premium payments cease upon termination of employment. The minimum retirement age for the other members of the Group Executive Committee is 62 and the pensions are based on contributions, except for Olavi Huhtala who, since his employment in Rautaruukki, continues to be covered by the benefit-based pension scheme via Rautaruukin Eläkesäätiö with a possible retirement age of 60, as well as Charles Schmitt, whose pension scheme is in line with the US legislation and practice.