Remuneration policy
Nordiska’s Remuneration Policy governs the remuneration of employees. The Policy promotes sound and effective risk management and discourages excessive risk-taking, thereby benefiting both our customers and Nordiska.
Employee Remuneration
The purpose of Nordiska’s Remuneration Policy is to ensure that Nordiska maintains internal rules governing its remuneration system that comply with the requirements set out in the regulations of the Swedish Financial Supervisory Authority (FFFS 2011:1) and other applicable regulatory requirements in this area, in particular the Capital Requirements Directive (2013/36/EU), the EBA Guidelines (EBA/GL/2021/04), and Article 450 of the Capital Requirements Regulation (Regulation (EU) No 575/2013).
As a bank, Nordiska is committed to maintaining a sound risk culture and conducting its operations in a prudent manner. Promoting sound and effective risk management and preventing conflicts of interest and excessive risk-taking are essential to maintaining public confidence in Nordiska and to ensuring its long-term profitability and stability.
Nordiska actively seeks to prevent and manage both potential and actual conflicts of interest through a clear organisational structure and allocation of responsibilities, an appropriately designed remuneration model, and established processes for identifying, assessing, managing, documenting and monitoring conflicts of interest. The remuneration system and the associated processes shall be designed and applied in a manner that ensures that the interests of individual office-holders or functions do not unduly influence decisions relating to remuneration, risk-taking or control activities.
Nordiska’s objective is to conduct its operations in a manner that does not jeopardise its ability to meet its obligations, in line with its vision of enabling business and financial development through innovative technology and a high level of expertise. The remuneration system shall support this objective by being sound, reasonable and motivating. It shall promote long-term value creation while maintaining an appropriately balanced level of risk. In designing and applying Nordiska’s remuneration system, due consideration shall be given to reputational risk, sustainability risk, operational risk and compliance risk.
Nordiska’s Board of Directors adopts and reviews the Remuneration Policy at least annually on the basis of a risk analysis. The Policy establishes the principles governing remuneration within Nordiska, how the Policy is to be applied and monitored, and how employees whose professional activities have a material impact on Nordiska’s risk profile are to be identified. The Policy also applies to members of the Board of Directors and external contractors.
At least annually, one of Nordiska’s control functions – Compliance, Risk Control or Internal Audit – reviews whether the remuneration system complies with the Remuneration Policy. The results of the review are reported to the Board of Directors no later than in connection with the adoption of the Annual Report.
The Board of Directors determines the remuneration of executive management and employees with overall responsibility for any of Nordiska’s control functions. Where applicable, decisions by the Board of Directors shall comply with resolutions adopted by the general meeting of shareholders concerning remuneration.
Information on remuneration is disclosed in Nordiska’s Annual Report.
To attract, motivate and retain qualified employees, it is essential that remuneration within Nordiska is competitive in the market and segment in which the company operates. Employees shall be offered remuneration and benefits that are reasonable, market-aligned and competitive, taking into account Nordiska’s circumstances. As a general principle, remuneration shall consist of fixed salary, consistent with the principle that the remuneration system shall not encourage excessive risk-taking.
Nordiska is committed to maintaining a fully gender-neutral remuneration system. The principle of equal pay for equal work and work of equal value applies to all employees. All remuneration, including fixed salary, any variable components, pension benefits and other benefits, is based on objective criteria unrelated to gender. Criteria such as responsibility, skills and expertise, and performance shall be applied consistently and without discrimination. Assessments of the requirements associated with a position and of an individual employee’s performance shall be free from gender-based stereotypes.
Nordiska’s remuneration system shall be consistent with the sound and effective management of sustainability risks in accordance with applicable regulatory requirements. The system shall not encourage excessive risk-taking in relation to environmental, social or governance factors (ESG risks).
The remuneration system shall also support responsible conduct towards customers and the market. Remuneration shall not be structured in a manner that creates incentives for mis-selling, conflicts of interest or excessive risk-taking, nor shall it encourage the circumvention of internal rules or the unfair treatment of customers. When assessing employee performance and determining any variable remuneration, non-financial criteria such as regulatory compliance, customer outcomes and risk culture may be taken into account.
Risk management is an integral part of all activities within Nordiska. The Board of Directors determines the overall level of risk that Nordiska is willing to assume in order to achieve its business objectives within the framework of its long-term strategy.
At least annually, the Board of Directors identifies, analyses and documents the risks associated with the remuneration system. The results of this analysis are reflected in the Remuneration Policy.
At least annually, the Board of Directors identifies those employees whose professional activities have a material impact on the company’s risk profile, taking into account FFFS 2011:1.
Pursuant to FFFS 2011:1, the following categories have been identified as employees whose professional activities have a material impact on Nordiska’s risk profile (identified staff):
i) members of the Board of Directors;
ii) all employees who are members of executive management;
iii) employees with managerial responsibility for Nordiska’s control functions;
iv) employees responsible for material business units; or
v) an employee who was entitled to significant remuneration in respect of the preceding financial year, provided that:
a) his or her remuneration is equal to or greater than EUR 500,000 and is equal to or greater than the average remuneration awarded to the persons referred to in points (i) and (ii); and
b) he or she works within a material business unit and performs duties that have a significant impact on the risk profile of the relevant business unit.
Nordiska’s assessment is that the remuneration system contributes to the achievement of the company’s business objectives and motivates employees to achieve established targets. Appropriate control and reporting structures are in place, and the remuneration system does not constitute a significant risk to Nordiska’s ability to meet its short- or long-term obligations.
No material risks or individual incentives have been identified that could encourage excessive, inappropriate or unauthorised risk-taking, either by individual employees or by employees collectively.
Category | Number of persons |
|---|---|
Management body in its supervisory function – Board of Directors excluding the CEO | 4 |
Management body in its management function | 10 |
Other members of executive management | 0 |
Other identified staff | 1 |
Employees whose remuneration equals or exceeds the total remuneration of any member of executive management; employees whose remuneration exceeds EUR 500,000; or employees who receive the highest remuneration within Nordiska | 1 |
The remuneration model for Nordiska employees consists primarily of fixed salary and pension contributions. Fixed salary constitutes remuneration for work performed. The salary level of each individual employee is determined on the basis of the responsibilities and complexity associated with the position, individual performance and relevant market conditions.
A limited number of selected employees may be eligible for risk-adjusted, commission-based remuneration intended to reward strong performance. Such remuneration is assessed on the basis of predetermined financial and non-financial criteria. Commission is based on the achievement of individual sales targets.
Employees covered by this form of remuneration have no authority to influence or make decisions regarding which customers are accepted, which invoices are purchased or which credit arrangements are entered into. Accordingly, their activities cannot be considered to be linked to future risk-taking that could affect Nordiska’s income statement or balance sheet.
Members of management and key employees within Nordiska may be offered variable remuneration in the form of performance-related bonuses and share-based incentive programmes. The purpose of such remuneration is to create incentives for the organisation as a whole to work towards the objectives established by the Board of Directors. Variable remuneration is determined by the Board of Directors.
In addition to the remuneration described above, other benefits may be provided, although Nordiska applies a conservative approach to the provision of such benefits. Upon termination of employment, compensation may be provided for the purpose of reaching a settlement where the CEO determines that doing so is in Nordiska’s interests.
The Board of Directors has appointed a Board member with special responsibility for remuneration matters. This Board member is not a member of Nordiska’s executive management and possesses sufficient knowledge and experience in risk management and remuneration matters.
The Board member with special responsibility for remuneration conducts an independent annual assessment of Nordiska’s Remuneration Policy and remuneration system. The Board member also prepares decisions by the Board of Directors concerning remuneration and related measures, taking into account the long-term interests of shareholders, investors and other stakeholders.
The Internal Audit function shall participate regularly in the assessment and evaluation process conducted by the CEO and the Board member with special responsibility for remuneration.