Notes for P&L

Note 7 Employees and employee benefits expense

Remuneration to the Board of Directors and senior management

Preparation and decision-making process regarding remuneration to the Board, CEO and Group management

The guidelines that applied during the financial year 2025 for remuneration to senior executives were decided by the Annual General Meeting 2025. The principle for remuneration to the Board of Directors, Chief Executive Officer (CEO) and Group Management is that remuneration should be competitive. The Nomination Committee proposes Board fees to the Annual General Meeting (AGM). Board fees are paid based on a resolution of the AGM. For committee work, remuneration is paid to the Chairman of the audit committee according to the decision of the AGM, to other members no fee is paid for committee work. For remuneration to the CEO, members of Group Management and other members of senior management in the Group, the Board of Directors has appointed a remuneration committee consisting of the Chairman of the Board and one Board member, with the CEO as the reporting member. A fixed salary, variable remuneration and conventional employment benefits as well as pension benefits are paid to the CEO, Group Management and other members of senior management. In addition, incentive programmes apply as described below. The remuneration committee adheres to the guidelines for remuneration to senior management approved by AddLife AB's AGM.

Incentive program for senior executives

The Group's share-based long-term incentive scheme makes it easier for senior management to acquire shares in the company. The reason for implementation of the long-term incentive scheme is to give management personnel within the AddLife Group the opportunity to learn about and work towards an increase in the value of the Company’s shares through their own investment, thereby achieving greater alignment of interests between them and the Company's shareholders. The purpose of the incentive scheme is also to help senior executives to increase their shareholding in the Company over the long-term.

AddLife currently has a total of two outstanding incentive programs based on call options, corresponding to a total of 355,800 B shares. Employees have paid a market-based premium for the acquired call options on B shares. The option premium in the program has been calculated by Handelsbanken using the Black & Scholes valuation method. The assumptions in the calculations include the exercise price being set at 110 percent of the volume-weighted average trading price during the measurement period, volatility based on statistical data from historical figures, the risk-free interest rate based on government bond rates, the term and exercise period according to the program conditions, and dividends estimated according to the group’s dividend policy. The programme includes a subsidy so that the employee receives the same sum as the option premium paid in the form of cash payment, i.e. salary, after two years, provided that the option owner at this point is still employed within the Group. This subsidy and the associated social security costs are accrued as personnel costs over the vesting period. AddLife has the right, but no obligation to repurchase the options when an employee terminates employment. The holder may exercise the options regardless of continued employment in the Group. Issued call options on repurchased shares have resulted in an estimated dilution effect of approximately 0.0 percent (0.0) during the financial year, based on the average share price for the year.

During the financial year, SEK 1 million (2) has been recognised as an expense related to the option programmes.

During the financial year, the 2021/2025 program expired without impact as the exercise price during the exercise period exceeded the share price.

AddLife has two outstanding long-term incentive programmes, LTIP 2024 and LTIP 2025, based on performance share rights. The maximum number of shares that may be allotted to participants under the programmes amounts in total to not more than 169,566 Class B shares, corresponding to approximately 0.1 percent of the total number of shares.

To participate, the participants are required to invest in Class B shares in the Company (“Investment Shares”). For each Investment Share, a number of performance share rights are granted. Each performance share right entitles the holder, provided that the conditions of the programme are fulfilled, to receive one Class B share free of charge after a vesting period of approximately three years, provided that the participant remains employed and retains their Investment Shares throughout the entire vesting period.

The maximum value per performance share that may be allotted is capped at 300 percent of the volume‑weighted average price of the Company’s share during the respective investment period. The Board of Directors has the right, taking into account AddLife’s financial performance, material changes in the Group, developments on the stock market and other relevant circumstances, to adjust the final level of allotment to a level deemed reasonable.
The performance conditions for LTIP 2024 are based on average annual earnings growth (EBITA) during the period January 1, 2024 – December 31, 2026, as well as sustainability‑related targets. The performance conditions for LTIP 2025 are based on average annual earnings growth (EBITA) during the period January 1, 2025 – December 31, 2027, as well as sustainability‑related targets.

The total cost for LTIP 2024 and LTIP 2025 over the terms of the programmes is estimated, given certain assumptions and in accordance with IFRS 2, to amount to approximately SEK 11.3 million excluding social security contributions at the expected outcome, and to a maximum of approximately SEK 22.5 million at full outcome. The cost for social security contributions is estimated, based on an assumed rate of 31.42 percent in social security contributions, to amount to approximately SEK 5.5 million at the expected outcome and approximately SEK 12.6 million at the maximum outcome. 

During the financial year, an amount of SEK 5 million (1) has been recognised as an expense related to the programmes in accordance with IFRS 2.

Within the framework of LTIP 2024, the President and CEO has acquired 7,500 Investment Shares and thereby received 45,000 performance share rights which, after the vesting period, may entitle the holder to receive an equal number of Class B shares. Fourteen other senior executives have acquired a total of 15,065 Investment Shares and received 62,760 performance share rights.

Within the framework of LTIP 2025, the President and CEO has acquired 4,000 Investment Shares and received 24,000 performance share rights. Fourteen other senior executives have acquired 9,064 Investment Shares and received 37,806 performance share rights.

A summary of outstanding programmes, number of Investment Shares, the corresponding maximum number of performance shares and proportion of total number of shares is presented in the table below.

The Board of Directors

The remuneration has been determined by the Nomination Committee, and the total paid remuneration of SEK 2,940 thousand has been allocated among the board members in accordance with the resolution of the 2024 Annual General Meeting. 

Parent Company's CEO

Fredrik Dalborg, Parent Company CEO, received a fixed salary of SEK 5,878 thousand (5,468) and SEK 3,522 thousand (3,327) in variable pay. Variable remuneration includes SEK 1,707 thousand regarding the year’s cost for a subsidy for participation in the Group’s incentive programme. Taxable benefits for the CEO totalling SEK 89 thousand (89) are additional. From age 65, the CEO is covered by a defined contribution pension, the size of which depends on the outcome of pension insurance agreements. In 2025, a total of SEK 1,459 thousand (1,457) in pension premiums, determined annually by the remuneration committee, were paid for the CEO.

Variable salary, excluding the subsidy, is pensionable income. Variable remuneration based on Group earnings may amount to 40 percent of fixed salary. Further variable cash remuneration may be awarded in extraordinary circumstances, provided that such extraordinary arrangements are limited in time and only made on an individual basis, for the purpose of recruiting or retaining executives, or as remuneration for extraordinary performance beyond the individual’s ordinary tasks. Such remuneration may not exceed an amount corresponding to 50 percent of the fixed annual salary and may not be paid more than once each year per individual. Any resolution on such remuneration shall be made by the Board based on a proposal from the Remuneration Committee. During 2025, no such remuneration has been paid. The notice period is six months from the company's side and six months from the CEO's side. In the event of termination by the company, the CEO is entitled to severance payment equivalent to nine months' salary in addition to salary during the notice period. No severance package is payable if the employee terminates the contract.

Other members of Group Management

Other members of Group Management were paid a total of SEK 2,879 thousand (3,256) in fixed salaries and SEK 1,468 thousand (1,667) in variable remuneration. Variable remuneration includes SEK 570 thousand regarding the year’s cost for a subsidy for participation in the Group’s incentive programme, which was expensed during the 2025 financial year and will be paid in the coming years. Taxable benefits totalling SEK 127 thousand (152) are additional. Persons in Group Management are covered from age 65 by pension entitlements based on individual agreements. Existing pension schemes consist of defined contribution schemes, in which the pension amount depends on the outcome of pension insurance agreements. During 2025, a total of SEK 750 thousand (1,015) in pension premiums was paid for the group ‘Other members of Group Management’. Variable remuneration based on Group earnings may amount to 40 percent of fixed salary. Further variable cash remuneration may be awarded in extraordinary circumstances, provided that such extraordinary arrangements are limited in time and only made on an individual basis, for the purpose of recruiting or retaining executives, or as remuneration for extraordinary performance beyond the individual’s ordinary tasks. Such remuneration may not exceed an amount corresponding to 50 percent of the fixed annual salary and may not be paid more than once each year per individual. During 2025, no such compensation has been paid. The notice period is six months from the company's side and six months from the employee's side. Severance payment is granted for a maximum of six months' salary. No severance package is payable if the employee terminates the contract.

Personnel information

Members of the Board of Directors' are directors, elected by a general meeting, in the Parent Company and in Group companies. Members of senior management' are people in Group Management and Managing Directors at Group companies.