The board’s statement on determination of salary and other remuneration to leading personnel in Selvaag Bolig ASA

The following statement of salary and other remuneration to members of the group’s management was approved by an extraordinary general meeting in September 2016.

Guidelines for management remuneration

Leading personnel include the chief executive officer (CEO) and other senior management. For the purposes of these guidelines, the remuneration package signifies total compensation, including one or more of the following elements:  fixed base salary, variable pay (including bonus) and other benefits (including pension contribution, termination benefits, fringe benefits and other benefits in kind). Severance pay comprises compensation related to resignation, and may include termination payments, other financial compensation and payment in kind.

Main principles for determining remuneration packages

Remuneration for management in Selvaag Bolig ASA should be competitive. The primary element of a remuneration package will be the fixed base salary. The remuneration packages must be designed so as to avoid unreasonable compensation owing to external circumstances outside management’s control. The individual elements in a remuneration package, including fixed base salary, any variable pay or other benefits such as pension contributions and severance, must be considered in the context of total compensation. The board must maintain an overview of the total value of each manager’s agreed compensation and ensure that management’s remuneration packages do not have adverse consequences for the company or in other ways are detrimental to the company’s reputation. Individuals in the group’s management will not receive specific compensation for board positions with wholly owned subsidiaries.

Variable pay

Any variable pay will be based on the following principles:

Clear connections must exist between the goals determining variable pay and the objectives of the company. Variable pay must be based on mainly objective, definable and measurable criteria. For the management group, variable pay (bonus) may not exceed 100% of fixed base salary (150% for the CEO). The company has a share purchase programme for the company’s executive management. Members of the executive management can choose to purchase shares in the company limited upwards to the individual’s annual gross bonus. The price per share will be the market price reduced by a factor which reflects the reduction in value imposed by a lock-up period/sale restriction of three years. The criteria will be based on circumstances which are possible for management to influence, and specify a distinct period for which variable pay will be determined. A system for variable pay must be transparent and easily comprehensible.

Pension contributions

The terms for determining management’s pension rights should be equal to those of other employees.

Severance pay

In the case of a pre-established agreement through which the chief executive officer waives the protection against dismissal set forth by the Working Environment Act (“Arbeidsmiljøloven”), an agreement regarding severance can be reached. Severance payments should not be utilised in the event of voluntary resignation, except if warranted by special circumstances. Severance pay should not exceed 12 months’ fixed base salary in addition to any compensation during the period of notice. Severance pay should be withheld if conditions for dismissal exist or if, during the period in which severance pay is provided, irregularities or acts of negligence are discovered which may result in liabilities for damages or in the individual being indicted for violation of the law.