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The Group CEO Torbjörn Magnusson started in the position on 1 January 2020.
The remuneration of the Group CEO is reviewed annually and is based on the Sampo Group Remuneration Principles. The remuneration includes fixed salary, fringe benefits and a supplementary defined contribution pension contract, and may also include payments from short-term incentive programs and long-term incentive schemes.
The Board of Directors decides on one-year short-term incentive programs separately each year and on cash payouts from the programs in the following year. The Group CEO participates in a one-year short-term incentive program, where the payout is triggered by the operative result of Sampo and the outcome is determined on the basis of the Sampo Group result and the individual performance of the Group CEO. The maximum amount that can be paid to the Group CEO from the program corresponds to nine months' fixed salary. Part of the payout shall be deferred for at least three years as required in the regulatory framework applicable to Sampo.
The Board of Directors decides on multiannual long-term incentive schemes and on cash payouts from the schemes. The Group CEO participates in the long-term incentive schemes 2014:1 and 2017:1 for Sampo Group's key employees, where the outcome is determined on the basis of Sampo's share price development over a period of three to five years starting from the issue of the scheme. The payout is divided into three annual instalments of 30 per cent, 35 per cent, and 35 per cent respectively. The Group CEO has been allocated 250,000 incentive units in the 2014:1 scheme and 350,000 incentive units in the 2017:1 scheme.
The value of one incentive unit is calculated as the difference between the trade-weighted average price of the Sampo A share at the time of payment and the dividend-adjusted starting price. In addition to the share price development, the calculation of the value of one incentive unit takes into account the performance of the insurance margin of If P&C and the return on capital at risk as further specified in the terms of the respective incentive scheme. Both schemes contain a cap for maximum payout.
At payout from the 2014:1 scheme, the Group CEO is obliged to purchase Sampo A shares with 60 per cent of each instalment after deducting income tax and other comparable charges. At payout from the 2017:1 scheme, the Group CEO is obliged to purchase Sampo A shares with 50 per cent of each instalment after deducting income tax and other comparable charges. The shares are subject to disposal restrictions for three years, after which the Board of Directors shall decide on the possible release.
In addition to Swedish statutory pension, where the pensionable income is limited to 7.5 income base amounts, the Group CEO is entitled to a supplementary defined contribution pension. The premium corresponds to 38 per cent of the fixed annual salary and 25 per cent of the annually paid short-term incentive. The retirement age is 65.
The notice period for terminating the service contract of the Group CEO is 12 months, from which period he is entitled to receive salary. Magnusson is also, in accordance with his current service contract, entitled to a severance compensation corresponding to a maximum of 24 months’ fixed salary should Sampo terminate his service contract without a specific reason.