Remuneration
Nelly operates nelly.com, which is one of the Nordic region’s strongest fashion brands for young women, and nlyman.com. Nelly’s business model is based on a core of its own brands and a supplementary range of curated brands from an international portfolio. Nelly will continue to strengthen its own brands and remain at the forefront of digital marketing and sales. The company will continue to inspire its target group with selected trends and fashion.
For Nelly to be able to realise its business strategy and safeguard the company’s long-term interests, including their sustainability, it is essential that it can attract, motivate and retain senior executives in competition with comparable Nordic companies, primarily Nordic companies operating in e-commerce and retail with consumer brands. These guidelines must, therefore, allow the Senior Executives to be offered a competitive package of remuneration. At the same time, Nelly’s remuneration system must be compatible with and promote sound, effective risk management and discourage excessive risk-taking.
Remuneration of the Senior Executives in Nelly must, in both the short and long terms, reflect the individual’s performance and responsibilities, and the earnings of Nelly and its subsidiaries and must also align the incentives of the Senior Executives with the interests of the shareholders. Consequently, the Senior Executives must be remunerated according to the principle of reward for performance.
The Board considers that the option of variable remuneration and participation in any long-term incentive plans, plus carefully balanced fixed remuneration, create the conditions for Nelly to be a competitive employer, while the design of and conditions for the variable remuneration promote responsible, sound risk management and the company’s profitability and growth strategy, long-term interests and sustainability.
The decision-making process add
The Board has established a Remuneration Committee. The duties of the Committee include preparing the Board’s decisions on proposals for guidelines for remuneration of senior executives. At least every four years, the Board must submit a proposal for guidelines for remuneration of senior executives to the General Meeting for resolution. The guidelines must apply until new guidelines have been adopted by the General Meeting.
The Remuneration Committee shall also monitor and assess plans for variable remuneration of the company management, the application of these guidelines for remuneration of senior executives and the remuneration structures and levels of remuneration in the company.
The members of the Remuneration Committee are independent of the company and the executive management. Senior Executives do not take part in the Board’s discussions and decisions on issues related to remuneration where the issues affect them personally.
Remuneration to Board members add
Board members in the parent company, who are appointed at the General Meeting, may, in special cases, receive remuneration for services performed within their respective specialist areas that fall outside their ordinary Board duties for the parent company. Remuneration for such services must be market-based and approved by the Board.
Remuneration to Board members 2023
| Group and parent company (SEK million) | Basic salary/Board remuneration | For Board duties in subsidiaries | Variable remuneration | Other benefits | Pension expenses | Rights issue expenses | Total |
|---|---|---|---|---|---|---|---|
| Mathias Pedersen, former Chair of the Board | 0.3 | 0.3 | |||||
| Ebba Ljungerud, Chair of the Board | 0.3 | 0.3 | |||||
| Stefan Palm | 0.2 | 0.2 | |||||
| Daniel Hörnqvist | 0.2 | 0.2 | |||||
| Josephine Salenstedt | 0.2 | 0.2 | |||||
| Maj-Louise Pizzeli | 0.1 | 0.1 | |||||
| Sandra Backlund | 0.1 | 0.1 | |||||
| Lennart Sparud | 0.1 | 0.1 | |||||
| Axel Westphalen | 0.1 | 0.1 |
Remuneration to CEO add
Remuneration and other benefits 2023
| CEO | Basic salary | Variable remuneration | Other benefits | Pension expenses | Share right expenses | Total |
|---|---|---|---|---|---|---|
| Ludvig Anderberg, former CEO | 1.1 | 0.0 | 0.2 | 0.0 | 1.3 | |
| Helena Karlinder-Östlundh, CEO | 2.2 | 0.6 | 0.0 | 0.5 | - | 3.3 |
| Total | 3.3 | 0.6 | 0.0 | 0.7 | - |
Salary and terms of employment for employees add
The salary and terms of employment of Nelly’s employees were taken into consideration in the preparation of the Board’s proposal for these remuneration guidelines. The guidelines do not deviate from the remuneration systems that are generally applied in Nelly to other employees. The remuneration, types of remuneration and development of salary of the Senior Executives are deemed to be in line with salaries and terms of employment of other employees in Nelly in other respects as well. The development of remuneration of the Senior Executives and remuneration of other employees is reported in the Board’s annual Remuneration Report.
Notice of termination and severance pay add
Upon termination of employment, the notice period may not exceed twelve months. The total of fixed cash salary during the notice period and severance pay may not exceed an amount equivalent to the fixed cash salary for eighteen months for the CEO and twelve months for other Senior Executives. Upon termination by the employee, the notice period may not exceed six months and the employee is not entitled to severance pay.
Deviations from the guidelines add
Where the Board finds that there are particular reasons in a particular case and to safeguard the company’s long-term interests, including its sustainability, or to safeguard the company’s financial position, the Board is entitled to deviate from the guidelines. If the Board deviates from the guidelines, it must report the reasons for this at the following Annual General Meeting.
Types of remuneration
Remuneration must be market-based and may consist of the following components: fixed cash salary, variable cash remuneration, the option to participate in long-term (i) share/share price-related incentive plans adopted by the General Meeting and/or (ii) cash-based incentive plans, pension benefits and other customary benefits.
Fixed cash salary add
The Senior Executives’ fixed cash salaries are revised each year. They must be competitive and based on the individual’s skills, responsibilities and performance.
Variable cash remuneration add
The Senior Executives’ variable cash remuneration must be based on performance in meeting established targets for profitability, growth and value creation for their areas of responsibility and for Nelly. The outcome must be linked to measurable targets (qualitative, quantitative, general and individual) that are measured during one year. The targets within the Senior Executives’ respective areas of responsibility are intended to promote Nelly’s performance in both the short and long terms and thus promote Nelly’s business strategy and long-term interests, including the company’s sustainability. The variable cash remuneration may not exceed 100 percent of the Senior Executive’s fixed annual salary.
Additional cash variable remuneration may be paid in extraordinary circumstances, provided that such extraordinary arrangements are only made at individual level either to recruit or retain an executive or as remuneration for extraordinary performance above and beyond the person’s ordinary duties. Such remuneration may not exceed an amount equivalent to 100 percent of fixed annual cash salary. Any decision on such remuneration must be made by the Board following a proposal by the Remuneration Committee.
The Board must also consider deciding that part of Senior Executives’ variable cash remuneration must be invested in shares or share price-related instruments in Nelly.
Long-term share-related and cash-based incentive plans add
The Senior Executives may be offered incentive plans which must, in general, be share/share price-related and are, therefore, not subject to these guidelines but may also be cash-based. Long-term share/share price-based incentive plans must be designed to ensure the participants’ long-term commitment to value growth in Nelly and align the interests of the Senior Executives with those of the shareholders.
Establishment of criteria for cash variable remuneration and long-term cash-based incentive plans, and the right to demand repayment of such remuneration in certain cases
When the measurement period for meeting criteria for payment of variable cash remuneration and long-term cash-based incentive plans has ended, it is necessary to decide/establish the extent to which the criteria have been met. The Remuneration Committee is responsible for such assessment. Where financial criteria are concerned, the assessment must be based on the financial information most recently published by Nelly. The Remuneration Committee must, in its assessment, ensure that the remuneration is linked to Nelly’s earnings. When determining the remuneration, the Remuneration Committee must also take relevant circumstances into account in relation to the environment, social conditions, corporate governance and anti-corruption (ESG criteria).
To ensure that performances on which the remuneration has been based are sustainable over time, Nelly is entitled, with the restrictions that may be stipulated by law or contract, to demand repayment of all or part of remuneration other than fixed cash salary, pension and other customary benefits that has been paid incorrectly as a result of information that turns out to be obviously incorrect (claw-back).
Pensions and other customary benefits add
Pension commitments are defined contribution and secured through premiums paid to insurance companies. The amount of pension premiums is specified by Nelly’s pension plan and must generally correspond to the provision levels applicable under the ITP 1 plan with the resulting restrictions in relation to fixed annual salary. No provisions are made for salary components in excess of 60 income base amounts calculated on an annual basis. Variable cash remuneration must generally not be pensionable. The retirement age is normally 65.
Other benefits should be customary and contribute to facilitating the executives’ ability to perform their duties, for example, company car, occupational health services and medical expense insurance. The total of such benefits may not exceed 30 percent of the fixed annual cash salary.