Remuneration Guidelines

The annual general meeting in Stillfront Group AB (publ) adopts guidelines for remuneration and other terms of employment for the company’s executive management. The remuneration guidelines can be found on pp. 71-72 in the Annual Report 2022, and provides i.a. that remuneration of executive management shall be on market terms and may consist of the following components: fixed cash salary, variable cash remuneration, pension benefits and other benefits. In addition to remuneration covered by the remuneration guidelines, the general meetings of the company have resolved to implement long-term share-related incentive programmes as set out below.

Remuneration

REMUNERATION FOR GROUP EXECUTIVE MANAGEMENT
2022 CEO and President Other senior executives Total
Fixed Salary 6,937 19,778 26,715
Variable remuneration 0 65 65
Cost for shared based benefits 5,506 11,719 17,225
Pension expenses 1,193 1,633 2,826
Total remuneration 13,636 33,195 46,831
2021 CEO and President Other senior executives Total
Fixed Salary 6,154 17,447 23,601
Variable remuneration 500 1,260 1,760
Cost for shared based benefits 3,057 4,541 7,571
Pension expenses 1,500 1,533 3,033
Total remuneration 11,211 24,754 35,965
FEES TO THE BOARD OF DIRECTORS
SEK 000 2022 2021
Jan Samuelsson, Chairman 853 721
Katarina Bonde 318 276
Birgitta Henriksson 358 312
Erik Forsberg 533 473
Ulrika Viklund 283 243
Marcus Jacobs 196 0
Kai Wawrzinek 108 243
Total 2,649 2,268

Long-term incentive programs

A prerequisite for the successful implementation of Stillfront’s business strategy and safeguarding of its long-term interests, is that Stillfront is able to attract, motivate and retain the best talent globally. To achieve this, it is necessary that Stillfront offers competitive remuneration to create incentives for the senior executives and key individuals to execute strategic plans, deliver excellent operating results and to align their incentives with the interests of Stillfront’s shareholders. The information related to relevant incentive programs’ dilutive effect is based on the number of outstanding shares in Stillfront Group AB (publ) on 2023-05-22.

LTIP 2019/2023

The Extraordinary General Meeting on 10 December 2019 resolved to issue a maximum of 200,000 employee share options with attached warrants (each an “ESOP”). The company’s subsidiary, Todavia AB, has subscribed for all warrants issued under LTIP 2019/2023, and 200,000 ESOPs have been allocated to a number of key individuals in the company’s executive management.

Post the share split on 28 December 2020, each ESOP entitles the ESOP holder to subscribe for 10 new shares in the company for SEK 50 per share during the period 15 December 2022 up to and including 15 December 2023 provided that the ESOP holder is still employed by the group at the exercise of the ESOPs. Acquisition is carried out through the exercise of warrants issued under LTIP 2019/2023.

If all 200,000 warrants issued under LTIP 2019/2023 are exercised for subscription of 2,000,000 shares, the dilution effect will be approximately 0.43 percent.

For additional information on LTIP 2019/2023, please see the Extraordinary General Meeting December 2019.

LTIP 2020/2024 I

The Annual General Meeting on 14 May 2020 resolved to issue a maximum of 350,000 warrants. Post the share split on 28 December 2020, each warrant entitles the holder to subscribe for 10 new shares in the company for SEK 78.549 per share on the last banking day each month during the period 1 June 2023 to 31 May 2024.

The company’s subsidiary, Todavia AB, has subscribed for all warrants issued under LTIP 2020/2024 I, and a number of key individuals in the company’s management have acquired 277,000 of the warrants at market value. The price (option premium) has been determined using the Black & Scholes valuation model. Out of the total number of warrants issues, 73,000 non-allocated warrants have been cancelled.

If all 277,000 warrants issued under LTIP 2020/2024 I are exercised for subscription of 2,770,000 shares, the dilution effect will be approximately 0.60 percent.

For additional information on LTIP 2020/2024 I, please see the Annual General Meeting 2020.

LTIP 2021/2025

The Annual General Meeting on 11 May 2021 resolved to implement a long-term incentive program under which a maximum of 3,500,000 employee stock options shall be offered to approximately 45 participants, consisting of the CEO, senior executives and key employees at studio level within the Stillfront Group.

The employee stock options are gradually vested during a three-year period, and after the expiration of the three-year period each vested employee stock options entitles the participant to receive one share in Stillfront. The price for the shares at exercise of the employee stock option shall be equal to the average volume weighted share price for Stillfront’s shares during a period of ten trading days before the allotment of the employee stock options to the relevant participant, increased by 8 percent per year.

There is no dilution related to LTIP 2021/2025, since the program is secured via a share swap agreement with Nordea Bank Abp, filial i Sverige, through which Stillfront has secured delivery of shares to participants (when/if applicable).

For information on LTIP 2021/2025, please see the Annual General Meeting May 2021.

LTIP 2022/2026

The Annual General Meeting on 12 May 2022 resolved to implement a long-term incentive program under which a maximum of 2,000,000 restricted stock units shall be offered to approximately 50 participants, consisting of the CEO, senior executives and key personnel within the Stillfront Group.

The restricted stock units are gradually vested during a three-year period, and after the expiration of the three-year period, each vested restricted stock unit entitles the participant to receive one share in Stillfront for free during one of three exercise windows during 2026, if the performance target of an average annual total shareholder return of 8% has been met.

If all restricted stock units issued under LTIP 2022/2026 are exercised for subscription of 2,000,000 shares, the dilution effect will be approximately 0.39 percent.

For additional information on LTIP 2022/2026, please see the Annual General Meeting May 2022.

LTIP 2023/2027

The Annual General Meeting on 11 May 2023 resolved to implement a long-term incentive program under which a maximum of 2,024,000 restricted stock units shall be offered to 45 participants, consisting of the CEO, senior executives and key personnel within the Stillfront Group.

The restricted stock units are vested on an annual basis during a four-year period depending on Stillfront’s annual achievement of two of its financial targets (revenue growth and EBITDAC-margin), and after the expiration of the four-year period, each vested restricted stock unit entitles to participant to receive one share in Stillfront for free during the exercise windows following the release of Stillfront’s Q2 report 2027.

There is currently no dilution related to LTIP 2023/2027 since the proposal by the board of directors on a directed issue and transfer of warrants to ensure delivery of shares in the Stillfront under LTIP 2023/2027 was not approved by the 2023 Annual General Meeting. In order to ensure delivery of shares to the participants of LTIP 2023/2027, the board of directors may enter into a swap agreement with a third party.

For additional information on LTIP 2023/2027, please see the Annual General Meeting May 2023.