The Annual General Meeting (AGM) resolves on compensation to the Board, including for committee work, and on Guidelines for compensation for Senior Executives.
Compensation to senior executives is addressed by the Compensation Committee based on said Guidelines, which is a drafting committee of the Board. Compensation to the President is resolved by the Board, based on the Guidelines.
Compensation to board
Remuneration to the Chairman and other Directors is resolved by the AGM. According to the resolution of the 2017 AGM, the Chairman received remuneration of SEK 375,000 and other Directors received SEK 150,000. For committee work in 2016 the members of the Compensation Committee were paid SEK 16,000 and the Chairman was paid SEK 27,000, while the members of the Audit Committee were each paid SEK 55,000 and the Chairman was paid SEK 80,000.
Compensation to senior executives
The remuneration guidelines for senior executives approved by the 2017 AGM prescribe e.g. that:
the remuneration for the CEO and other members of management can consist of a base salary, variable compensation, long-term incentive schemes and other benefits, including a pension.
Any variable compensation is based on performance relative to predefined, measurable targets and is maximised relative to the target salary.
The fixed and variable salary components and benefits for the CEO and the management of Björn Borg are indicated in Note 8 of the annual report.
For more detailed information about remunerations paid out in 2016, please refer to the 2016 Annual Report.
The 2015 AGM adopted a long-term incentive scheme (2015/2019) comprising the issuance and transfer of convertibles and warrants, which was implemented in early summer 2015. The incentive scheme comprises a convertible plan for all employees of Swedish Group companies, including Group Management, and a warrant plan exclusively for Group Management.
As part of the convertible plan, Björn Borg raised a convertible debenture loan with a nominal value of SEK 22,016,800, corresponding to 580,000 convertibles, which can be converted to not more than 580,000 shares in the company. As part of the warrant plan, Björn Borg issued 520,000 warrants that can be exercised to subscribe for not more than 520,000 new shares in the company. Of this total, all the warrants were transferred, but only 478,000 convertibles were transferred. The reason why all the convertibles were not transferred was that certain instruments that were intended for senior executives were not acquired due to certain management changes in 2015.
The 102,000 convertibles that were not transferred can no longer be transferred after the 2016 AGM and cannot be exercised. At the current subscription level, Björn Borg’s share capital can increase by not more than SEK 285,606, distributed between SEK 123,106 due to the conversion of convertibles and SEK 162,500 due to the exercise of warrants, through the issuance of not more than 998,000 shares. This corresponds to a maximum dilution effect of 4.0 percent of the share capital and votes.
The convertibles were issued at nominal value, which corresponded to the conversion price. The subscription price corresponded to 100 percent of the convertibles’ nominal value. The subscription price of the warrants was the market value according to the Black & Scholes valuation model. Each convertible and warrant in the incentive scheme entitles its holder to convert to, or subscribe for, one new share in Björn Borg at a conversion or subscription price of SEK 37.96, corresponding to 120 percent of the average volume-weighted price paid for the Björn Borg share on Nasdaq Stockholm during the period May 21-29, 2015. Subscriptions and conversions as part of the plans are permitted during the period June 1-14, 2019.