Incentive plan

One overall objective of Castellum’s operations is to create a sound development of shareholder value over time. Castellum will maintain remuneration levels and terms of employment required to recruit and retain good management with the competence and capacity to achieve set objectives. The Board regards and evaluates remuneration as a package comprising the following components: fixed salaries, retirement benefits, variable compensation and non-monetary benefits. Marketability and competitiveness will be the overarching principles for remuneration of executive management.

The variable remuneration should reward the achievement of clearly set goals, promote long-term value creation within the Group, and be paid out in accordance with the Incentive Plan. Its formulation is based on the objective of interconnecting Executive Group interests with shareholder interests in that executives are also shareholders in Castellum. Moreover, it entails that an increased proportion of total remuneration is directly connected to the development of the Group.

Castellum’s incentive plan—resolved by the 2013 AGM and essentially comprising a renewal of the previous plan—consists of two parts:

  • One profit-based portion, which covers the years 2014, 2015 and 2016 and is based on the outcome of income from property management compared to previous year. Also taken into consideration is an overall assessment of the development of such individually determined factors as customer and employee satisfaction. For maximum bonus, the growth in income from property management per share has to reach 10% per year. When growth is in the range of 0–10%, there will be a linear calculation of the incentive. The profit-based portion is paid out yearly, as salary, after year-end closing. It may not exceed a six-month salary per year based on the executive’s salary level, as of July of the relevant fiscal year.
  • One share-price-based portion, which covers the period from June 2014 till May 2017 and is based on the total return of the Castellum share during a three-year period. Total return is to be defined both in nominal terms as well as compared to the index of for real estate shares in Sweden, the Eurozone and Great Britain. In order to receive maximum bonus, the total return must be at least 50% during the period and the total return has to exceed index development by at least 5 percentage points during the same period. In case of an outcome in the range of 0–50% and 0–5 percentage points respectively, there will be a linear calculation of the incentive. During the above three-year period, this share-price-based portion can total no more than one-and-a-half-years’ salary. Here, the variable remuneration issued is based on an average of the executive’s yearly salary as per July 2014, July 2015 and July 2016. The share-price-related portion is deducted and paid as salary in connection with the share-price reading in May, 2017.

Executives who receive variable remuneration in accordance with the incentive plan are obligated to acquire Castellum shares for at least half of the amount of their net variable remuneration. Variable remuneration is paid as a non-pensionable salary.