Remuneration

Incentive plans

The structure of Castellum’s incentive program is based on the objective to align the interests of the group executive management with the interests of the shareholders by way of the group executive management also being shareholders of Castellum and by increasing the share of the total remuneration which is connected to the development of the group.

Currently, Castellum has two profit and share price based incentive programs. The first program concerns the period 2020-2023 and the second program concerns the period 2022-2024, and thereafter new three years periods start rolling yearly.

The incentive program for 2020-2023 is made up of two parts, one part which is based on the profit each year and the outcome of individually determined factors (“STI”) as well as one part which is based on the total return on the Castellum share over a three-year period (“LTI”).

• STI consists of one profit-based component based on growth in income from property management compared to the previous year, as well as an overall estimation of development for certain individual factors. Full outcome requires that growth in income from property management per share reaches 10% per year. When growth is in the 0–10% range, a linear calculation of the incentive is made. The profit-based component is paid out yearly as salary after the year-end closing and can total no more than six months’ salary per year.
  
  
• LTI consists of one share price-based component, based on the total yield on the Castellum share during a three-year period, both in nominal figures and compared with index for property shares in Sweden, the Eurozone and the UK. For full outcome of the incentive plan, the total yield must be at least 50% during the period and the total yield has to exceed index development by at least 5 percentage points during the period. When growth is in the 0–50% and 0–5 percentage points ranges respectively, a linear calculation of the incentive is made. Any payments due are paid as salary after the measurement period of June 2020–May 2023. During the three-year period, the share price based portion may total no more than one and a half years’ salary.

Executives in receipt of variable remuneration according to the incentive plan must acquire Castellum shares for at least half of the amount of the payment due after tax. The paid incentive does not affect pensionable contributions.

Current incentive plan applies for the period from 2020 to 2022 for the earnings-based component and from June, 2020 to May, 2023 for the share price-related component.

The incentive program for 2022-2024 is made up of two parts, one part which is based on the profit each year and the outcome of individually determined factors for the current year (“STI”) as well as a share price based part which is based on the total return on the Castellum share over a three-year period (“LTI”).

• STI is based on a comparison between the actual growth in income from property management per share and a determined profit target per share for the current financial year, as well as an overall estimation of development for certain individual factors. Full outcome requires that growth in income from property management per share reaches 10% per year. When growth is in the 0–10% range, a linear calculation of the incentive is made. 
  
  
• LTI consists of one share price-based component, based on the total yield on the Castellum share during a three-year period, both in nominal figures and compared with index for property shares in Sweden. For full outcome of the incentive plan, the total yield must be at least 50% during the period and the total yield has to exceed index development by at least 5 percentage points during the period. When growth is in the 0–50% and 0–5 percentage points ranges respectively, a linear calculation of the incentive is made. Any payments due are paid as salary after the measurement period of January 2022 – December 2024. During the three-year period, the share price based portion may total no more than a half years’ salary.

Executives in receipt of variable remuneration according to the incentive plan must acquire Castellum shares for at least half of the amount of the payment due after tax. The paid incentive does not affect pensionable contributions.

Current incentive plan applies for 2023 for the earnings-based component and from January, 2022 to December, 2024 for the share price-related component, and thereafter continuously during the period of 2023-2025, 2024-2026 etc., until the board of directors decides otherwise.