Remuneration

The following principles for remuneration of senior executives were adopted by the 2024 Annual General Meeting:

• A prerequisite for the successful implementation of Trelleborg’s strategy is that the company is able to recruit, develop and retain qualified senior executives.
• To this end Trelleborg offers market aligned remuneration, and these principles enable the company to offer senior executives competitive total remuneration packages. 
• The remuneration structure is to comprise fixed and variable remuneration, pension benefits and other benefits, which together form the individual’s total remuneration package
  

  Fixed remuneration Annual Base Salary (ABS)	Benefits Pension Other Benefits
  Variable remuneration Short-Term Incentive Programs (STI)	Long-Term Incentive Programs (LTI)

• Application of these principles varies depending on local legislation and local market conditions.

Remuneration may consist of fixed salary - often referred to as Annual Base Salary (ABS), variable remuneration in Short-Term Incentive programs (STI) and Long-Term Incentive programs (LTI), pension benefits and other benefits. The variable remuneration is to be linked to predetermined and measurable criteria of a financial or non-financial nature. They may also be individualized, quantitative or qualitative objectives. The criteria are to be designed so that they contribute to Trelleborg’s business strategy and long-term interests, including its sustainability strategy. In 2024 the STI was based on the metrics EBITA, operating cash flow (OCF) and a specific sustainability target – CO₂ reduction. The STI does not constitute pensionable income and does not form the basis for the calculation of vacation pay.

An individual’s remuneration shall be based on overall performance, competence, experience and potential as well as requirements in position. The criteria for awarding variable remuneration is to be measured over one year (STI) or several years (LTI). Both the STI and the LTI programs may amount to not more than 100 percent of the fixed salary during the measurement period. As a complement to the ordinary LTI cash program, within the overall frame of 100% of the fixed salary, Trelleborg introduced 2024 a Performance Share Program for Group Management. A criteria is that the participants makes a private investment of 10 percent in Trelleborg shares of his/her annual fixed gross salary. 

The LTI programs are designed to contribute to Trelleborg’s business strategy and long-term interests including its sustainability. The purpose and objective with the programs is to:

• unite the interests of shareholders and affected executives by offering participants an opportunity to become significant shareholders in Trelleborg,
• strengthen Trelleborg Group’s ability to retain and recruit qualified senior executives, 
• offer an internationally competitive remuneration and
• incentivize senior executives to hold Trelleborg shares up to a minimum level of one annual fixed gross salary. 

The performance criteria for the LTI programs include (i) an annual improvement of 10 percent in the Trelleborg Group’s earnings per share, and (ii) regarding the share-based incentive program introduced in 2024, a total improvement in earnings per share of 33 percent over three years.

Pension plans and health benefits are to be defined contribution schemes. A comprehensive package may include also medical & health insurance and various wellbeing programs, parental leave, etc. Trelleborg applies benefit programs that complements what laws and labor agreements provide on a local basis.

The Principles for Remuneration of Senior executives applies directly to the Group Management, including the President and CEO, as well as other members of Business Areas Management Teams. The principles are complemented by directives governing pensions and other benefits for senior executives.  In 2024, total remuneration of Group Management, including the President and CEO amounted to SEK 82,609,000 (89,447,000), excluding pension premiums, and SEK 94,247,000 (100,268,000), including pension premiums.

The President and CEO
During 2024, the President received a fixed salary and other fixed remuneration of in total SEK 14,025,000. Pursuant to agreements, the President has the possibility of earning a Short-Term Incentive. The STI has a fixed ceiling, which corresponds to a maximum of 70 percent of the annual fixed salary.  For 2024, annual variable salary remuneration for the President was set at SEK 7,935,000 (6,441,000).

Pensionable age for the President is 65; however, both the company and the President have the right, without a special cause, to request an early retirement from the age of 60, with a mutual six-month notice of termination. The pension agreement is a defined-contribution scheme, and the premium comprises 45 percent of the fixed salary, including vacation pay. For the President, a notice period of 24 months applies should termination of employment be initiated by the company. Should a termination of employment be initiated by the President, the notice period shall be six months.

Other senior executives

The STI for other senior executives has a fixed ceiling accounting for a maximum of 35–70 percent of the fixed annual salary.

For other senior executive the premiums for defined contribution pension are to amount to not more than 35 percent of the fixed salary.

Certain senior executives have extended notice periods when a termination of employment is initiated by the company, normally 12, 18, or 24 months. Should a termination of employment be initiated by a senior executive, the notice period is six months. The President and other senior executives have also been entitled to other benefits, primarily a company car and medical expenses insurance.

Purpose
The long-term incentive programs shall be designed to contribute to Trelleborg’s business strategy and long-term interests including its sustainability. The purpose and objective with of the  programs is to:

• unite the interests of shareholders and affected executives by offering participants an opportunity to become significant shareholders in Trelleborg,
• strengthen Trelleborg Group’s ability to retain and recruit qualified senior executives, 
• offer an internationally competitive remuneration and 
• incentivize senior executives to hold Trelleborg shares up to a minimum level of one annual fixed gross salary

Performance criteria

The performance criteria for the long-term incentive program include (i) an annual improvement of 10 percent in the Trelleborg Group’s earnings per share, and (ii) regarding the share-based incentive program introduced in 2024, a total improvement in earnings per share of 33 percent over three years. This criteria shall exclude the Group’s items affecting comparability and the impact of any share repurchase programs. For the 2018–2020 programs, the basis for the criteria was set as the outcome of earnings per share for 2017. This principle has remained unchanged for the rolling three-year programs that commenced thereafter.

Outcome and payment

The outcome of the programs is calculated (i) annually and accumulated over the respective three-year period, and (ii) regarding the share-based incentive program introduced in 2024, after the respective three-year period. Potential payments or delivery of performance shares are made in the first quarter of the year after the program expires. Therefore, a payment or delivery of performance shares will be made in the first quarter of 2026 for the program approved for 2023–2025. For the programs approved for 2024–2026, payment or delivery of performance shares will be made in the first quarter of 2027 and for the programs approved for 2025–2027, payment or delivery of performance shares will be made in the first quarter of 2028. These payments or delivery of shares do not constitute pensionable income and do not form the basis of calculation of vacation payment. The LTI cash programs have an outcome that is capped to a certain extent by the individual’s fixed salary. The Performance share programs have an outcome that is capped at 3 times the number of shares invested and allocated to the program by the individual. In total these outcomes may amount to not more than 100% of the individuals fixed annual salary. 

In 2024, SEK 44,317,000 (54,717,000) was expensed as the targets were partly achieved.

Other incentive programs
The Group has no other ongoing incentive programs such as convertible debentures, warrant programs or similar at the present time.