Remuneration of Board members
In accordance with the decision taken at the AGM in 2020, the following remuneration was paid to Board members:
- Chairman of the Board SEK 600,000,
- Board members not employed by the bank SEK 300,000
- Chairman of the Audit Committee SEK 100,000,
- other members of the Audit Committee SEK 50,000,
- Chairman of the Remuneration Committee SEK 50,000,
- other members of the Remuneration Committee SEK 30,000.
Remuneration of senior executives
The AGM in 2020 adopted the following guidelines for remuneration of TF Bank’s senior executives:
These guidelines comprise the CEO, CFO as well as any other members of the senior management. The guidelines shall be applied on remuneration which has been agreed upon, and changes made to already agreed remuneration, after the guidelines has been adopted by the 2020 Annual General Meeting. The guidelines do not compromise remuneration which has been agreed upon by the Annual General Meeting.
Guidelines for promoting the banks business strategy, long-term interests and sustainability
TF Bank was founded 1987 and is an internet-based niche bank offering consumer banking services and e-commerce solutions through a proprietary IT platform with a high degree of automation. Deposit and lending activities are conducted in Sweden, Finland, Norway, Denmark, Estonia, Latvia, Lithuania, Poland, Germany and Austria through branch or cross-border banking. From 2020 the operations are divided into three segments: Consumer Lending, Ecommerce Solutions and Credit Cards.
A successful implementation of the banks business strategy and the safeguarding of the bank’s long-term interests, including its sustainability, requires the bank to be able to recruit and retain qualified members of staff. This means that the bank must be able to offer a competitive remuneration package. The guidelines enable the bank to offer a competitive remuneration package to its executive management.
The bank has established a long-term warrants program in which all members of the senior management, except the CEO, participate. The program has been approved by the Annual General Meeting and is therefore not covered by these guidelines. The program is linked to the share price of the banks share. The program also required participants to make a personal investment. Further information about the program can be found on the Company’s website.
Variable cash remuneration which are compromised by these guidelines should aim to promote the Company’s business strategy and long-term interests, including its sustainability.
The forms of remuneration etc.
The remuneration shall be competitive and may comprise the following components: fixed salary, variable remuneration, pensions and other economic benefits. In addition, the Annual General Meeting may decide upon, for example, share- and share price-related remuneration.
The fulfillment of criterions for variable cash remuneration must be measurable over a time period of one or several years. The variable cash remuneration may amount to a maximum of 100 percent of the total fixed salary during the measurement period.
Furthermore, the following applies in accordance with the regulations in place with regards to remuneration in banks. Variable remuneration can be emanated in the form of shares, and there shall be a limit to the maximum result. Payment of variable remuneration shall be postponed and be made conditional on that the criteria on which the remuneration is based was shown to be sustainable in the long-term and on that the group’s position has not declined substantially. If the conditions for payment are not met, the remuneration shall be cancelled in whole or in part.
Pension benefits, including health insurance, shall be premium-determined, insofar as the executive is not covered by a collective bargaining agreement and/or premium based benefit. Pension premiums for defined contribution schemes may amount to a maximum of 25 percent of pension-based income.
Regarding employment conditions that are governed by rules other that Swedish, in so far as pension benefits and other benefits are concerned, appropriate adjustments are made to comply with such mandatory rules or fixed local practices, whereby the general purpose of these guidelines should be met as far as possible.
Termination of employment
In the event of termination of employment by the bank, the notice period may not exceed 12 months. Fixed salary during the notice period and severance pay may not, in total, exceed an amount corresponding to the fixed salary for 6-12 months. In the event of termination by the executive, the notice period may not exceed six months, and there will be no right to receive severance pay.
Furthermore, compensation for any commitment to restrict competition may be received. Such remuneration shall compensate for any loss of income and shall only be paid to the extent that the former executive has no right to severance pay. The remuneration shall be based on the fixed salary at the time of termination and shall be paid during the period subject to the restriction of competition, which shall not exceed 6-12 month after termination of employment.
Criteria’s for distributing variable remuneration
The variable remuneration shall be linked to pre-determined and measurable criteria’s that may be financial or non-financial. The criteria’s may also be individualized quantitative or qualitative goals. The criteria’s must be designed to promote the banks business strategy and long-term interests including its sustainability, for example by having a clear link to the business strategy or promoting the long-term development of the executive.
When the measurement period for fulfillment of the criteria for payment of variable remuneration has been completed, the extent to which the criteria’s have been met shall be assessed and determined, respectively. The Board of Directors are responsible for such an assessment in respect of variable cash remuneration to senior executives. The fulfillment of financial criteria’s must be determined based on the latest financial information published by the company.
Salary and terms of employment for the employees
In preparing the Boards proposal for these remuneration guidelines, salaries and terms of employment for the banks employees have been considered in that information about employees’ total remuneration, the components of the remuneration and the increase and rate of remuneration over time have been part of the Boars decision when evaluating the reasonableness of the guidelines and the limitations that follow.
The decision-making process to establish, review and implement the guidelines
The Board of Directors shall establish proposals for new guidelines when there is a need for significant changes, at least every 4 years. The proposals shall be submitted for the resolution at the Annual General Meeting. The guidelines shall apply until new guidelines have been adopted by the Annual General Meeting. The board shall also follow and evaluate programs for variable remuneration for the executives, the application of guidelines for remuneration senior executives, as well as current remuneration structures and remuneration levels in the bank. The CEO and other members of executive management shall not attend board meeting when decisions are being made about remuneration-related issues, insofar as they are affected by the issues.
Deviations from the guidelines
The Board of Directors may decide to temporarily deviate from the guidelines, in whole or part, of there are special reasons motivation such action in an individual case and deviation is necessary to meet the banks long-term interests, including its sustainability, or to ensure the banks financial viability.