Comments on the tables

From time to time the CEO and other senior officers may be offered variable remuneration. Other benefits and remuneration refer primarily to company cars and vacation pay. Pension costs refer to costs charged to the year. In both 2024 and 2023 the group senior officers consisted of eight persons, of which five were in the parent company.

The Board of Directors

The 2024 AGM decided on a remuneration to members of the Board of SEK 6,538 thousand (6,285), of which SEK 5,625 thousand (5,400) refers to Board work and SEK 913 thousand (885) refers to committee work. Compensation for work as Chairman of the Board was SEK 1,250 thousand (1,200) and SEK 4,375 thousand (4,200) was divided among the other Board members. Compensation for work on the Remuneration Committee was SEK 248 thousand (240), SEK 248 thousand (240) for work on the Finance Committee and SEK 417 thousand (405) for work on the Audit Committee.

Remuneration is not paid to members of the Board who are permanent employees of the Group. There are no agreements for future pension/leaving remuneration or other benefits either for the Chairman of the Board or for other members of the Board.

Principles for remuneration to senior officers

The group senior officers is comprised of the eight senior officers who are members of executive management. The principles for remuneration to senior officers were adopted by the 2024 AGM.

Remuneration to the CEO and other senior officers consists of basic pay, any short-term incentives, extra health insurance and those benefits otherwise enjoyed by other Peab employees as well as pension. All pension obligations are defined contribution pensions. The total remuneration paid to each senior officer is based on market terms and the responsibilities and qualifications of the senior officer.

From time to time, senior officers may be offered short-term incentives. Short-term incentives may not exceed 70 percent of the basic pay of the CEO and 60 percent of the basic pay of the other members of executive management and are primarily based on the Peab Group’s profitability and, from time to time, important Group targets. In 2024 Group targets were linked to Peab’s external financial and non-financial targets. Short-term incentives are determined for each financial year. Short-term incentives are set for each financial year.

Short-term incentives for 2024 were maximized at SEK 6,930 thousand (5,424) for the CEO and a total of SEK 15,198 thousand (14,185) for the other senior officers.

Short-term incentives are settled the year after being earned and may either be paid out as salary or placed as pension in financial instruments connected to the Peab share. If they are paid out as a one-off defined pension contribution, adjustments are made so as to neutralize the total cost for Peab.

For the period 2021-2023 senior officers were offered to participate in a long-term incentive (LTI) program. For senior officers and the CEO the upper limit (excluding social security) was 40 percent of their annual basic pay. The result of the LTI program was placed in a pension savings in a financial instrument connected to the Peab share. The LTI program was concluded in 2024.

There is a LTI program for the period 2024-2026 for the CEO, the other members of executive management and senior managers and specialist positions in the Peab Group. The LTI program is a Performance Share Program where participants can be allocated Peab shares under the condition that Peab achieve certain predetermined performance targets by the end of the program. At the start of the program share rights were allocated to the CEO corresponding to 50 percent of his basic pay and 45 percent of their basic pay to the other members of executive management. For more information about the Performance Share Program see below.

The period of notice from Peab is, at the most, 24 months and the period of notice from senior officers is, at the most, 6 months. If severance pay is paid the total remuneration for salary during the period of notice and severance pay may not exceed 24 months wages.

Chief Executive Officer

The CEO of Peab AB, Jesper Göransson, has in 2024 received a salary and other remuneration, including benefits, totaling SEK 10,472 thousand (9,310). In addition, he has received short-term incentives for 2024 of SEK 6,930 thousand (1,808) as well as expensed remuneration of SEK 938 thousand related to the LTI program. Pension contributions including fees for endowment insurance for the year were SEK 5,498 thousand (4,931).

The CEO has the right to retire from the age of 62. Annual pension contributions of 47 percent of basic pay are paid to meet this pledge. These are defined contribution pensions.

Notice on the part of Peab is twelve months with a reduction for any salary from a new employer combined with a severance pay of twelve months salary. Notice on the part of the CEO is six months combined with severance pay consisting of six months salary.

Other senior officers

The term other senior officers refers to the seven other persons in addition to the CEO that make up Peab’s executive management. Salary and other remuneration including benefits for other senior officers amounted to SEK 27,226 thousand (24,667). In addition, short-term incentives for 2024 were SEK 15,198 thousand (4,729) which were placed in pension savings in endowment insurance connected to the Peab share, alternatively paid in cash. For 2024 remuneration of SEK 2,002 thousand related to the LTI program  was expensed. Pension contributions including fees for endowment insurance during the year amounted to SEK 11,088 thousand (10,032).

The pension policy for senior officers means that pension contributions are defined contributions, entailing that the total contribution was 35-47 percent of basic pay. Certain senior officers have an agreement with Peab that their employment ends the month they turn 62 years old. The other senior officers have an agreement that their employment ends the month they turn 65 years old.

Notice on the part of Peab is twelve months with a reduction for any salary from a new employer combined with severance pay consisting of six-twelve months salary. Notice on the part of the other senior officers is six months combined with severance pay consisting of six months salary.

Performance Share Program (LTI program)

The 2024 AGM decided in accordance with the Board of Directors’ proposal for a Performance Share Program, LTI 2024, for the period 2024-2026. The program comprises around 600 people who are either in executive management, senior managers or have a specialist position in the Peab Group. The program is intended to promote achievement of Peab’s strategic targets and long-term value creation.

Each nominated participant is allocated a number of share rights at the start of LTI 2024 based on their basic pay and participant category. After the vesting period the participants will receive  shares in Peab free of charge contingent on meeting certain conditions. The right to receive performance shares requires that the participant has continued to be employed in the Peab Group during the vesting period.

Allocation is contingent on achievement of the target levels set by the Board for the financial years 2024-2026 regarding earnings per share (EPS) according to segment reporting and reduced carbon dioxide emissions. The performance target of earnings per share amounts to 90 percent of the performance target and is measured accumulatively over the period 2024-2026. If the minimum level in the interval for performance target EPS is not achieved the share rights do not entitle allocation of performance shares while every share right entitles to one performance share if the maximum level is achieved. Performance shares are allocated linearly between the minimum and maximum levels. The performance target of reduced carbon dioxide emissions amounts to 10 percent of the performance target and a predetermined reduction must be achieved.

By recommendation of the Board and after a decision by the AGM Peab intends to start a new three-year program annually.

Profit-sharing foundation

In 2007, Peab founded a profit-sharing foundation. The object of the profit-sharing foundation is to create greater participation through employee co-ownership and to better employees’ financial situation after retirement. Individual annual shares in profits are related to the employee’s profit-sharing entitling work hours. Upon retirement shareholders can withdraw their share in the foundation. Under the foundation’s investment policy, its assets must be mainly invested in shares in Peab. Peab made a provision of SEK 110 million for 2024 for the profit-sharing foundation. The amount, less payroll tax, will paid in for the employees who are part of the foundation in 2025. No provisions were made for the profit-sharing foundation for 2023.

Senior officers and other employees with other short-term incentives are not entitled to benefits from the profit-sharing foundation.

Pensions

Defined benefit pension plans

ITP 2 de­fined ben­e­fit plan oblig­a­tions for old age pen­sion and fam­i­ly pen­sion oblig­a­tions for white-​collar work­ers in Swe­den are man­aged through in­sur­ance from Alec­ta. Ac­cord­ing to a state­ment from the Council for Sustainability and Fi­nan­cial Re­port­ing Board, UFR 10 Re­port­ing pen­sion plan ITP 2 which is fi­nanced through in­sur­ance from Alec­ta, this is a de­fined ben­e­fit plan that en­com­pass­es sev­er­al em­ploy­ers. For the fi­nan­cial year of 2024 the com­pa­ny did not have the nec­es­sary in­for­ma­tion re­quired to rec­og­nize its pro­por­tion­al share of the plan’s oblig­a­tions, plan as­sets and ex­pens­es which has made it im­pos­si­ble to rec­og­nize this plan as a de­fined ben­e­fit plan. There­fore the ITP 2 pen­sion plan which is se­cured through in­sur­ance from Alec­ta is rec­og­nized as a de­fined con­tri­bu­tion plan. Pre­mi­ums for the de­fined ben­e­fit old age and fam­i­ly plans are cal­cu­lat­ed in­di­vid­u­al­ly tak­ing into ac­count salary, pre­vi­ous­ly earned pen­sion and an­tic­i­pat­ed re­main­ing em­ploy­ment pe­ri­od. An­tic­i­pat­ed pre­mi­ums for the next re­port pe­ri­od for ITP 2 in­sur­ance that are cov­ered by Alec­ta amount to SEK 138 mil­lion (122). The Group’s share of total pre­mi­ums for the plan and the Group’s share of the total num­ber of ac­tive mem­bers of the plan are 0.87 per­cent (0.86) re­spec­tive 0.65 per­cent (0.68).

The col­lec­tive con­sol­i­da­tion level is made up of the mar­ket value of Alec­ta’s as­sets as a per­cent­age of the in­sur­ance oblig­a­tions cal­cu­lat­ed in ac­cor­dance with Alec­ta’s in­sur­ance meth­ods and ad­just­ment as­sump­tions, which are not in ac­cor­dance with IAS 19. Nor­mal­ly the col­lec­tive con­sol­i­da­tion level is per­mit­ted to vary be­tween 125 and 175 per­cent. If Alec­ta’s col­lec­tive con­sol­i­da­tion level is less than 125 per­cent or ex­ceeds 150 mea­sures must be taken aimed at re­turn­ing the con­sol­i­da­tion level to the nor­mal in­ter­val. If the con­sol­i­da­tion level is low one mea­sure may be rais­ing the agreed price for new sub­scrip­tions and ex­pand­ing ex­ist­ing ben­e­fits. If the con­sol­i­da­tion level is high one mea­sure may be im­ple­ment­ing pre­mi­um re­duc­tions. At the end of 2024, Alec­ta’s sur­plus in the form of the col­lec­tive con­sol­i­da­tion level amount­ed to 162 per­cent (158).

Defined contribution plans

The Group has de­fined con­tri­bu­tion plans which are en­tire­ly paid for by the com­pa­nies. Pay­ments to these plans are made on a cur­rent basis ac­cord­ing to the rules of each plan.