Norion Bank’s remuneration strategy and principles for employee remuneration 

Norion Bank has a remuneration policy that contains rules on fixed and variable remuneration for all staff within Norion Bank.

A well-functioning market-based compensation structure is an important component for achieving good results and healthy risk-taking in the bank. Norion Bank's remuneration system is designed with the aim of attracting, retaining and motivating employees with the skills required to run a modern healthy banking business in accordance with the bank's long-term as well as overall objectives and principles. Remuneration within the bank must be market-oriented and competitive and must promote actions in accordance with Norion Bank's value base.

Remuneration to employees within Norion Bank can be paid partly in the form of fixed remuneration, partly through variable remuneration. In addition, the annual general meeting can, if so decided, offer long-term incentive programs such as share or share price-related incentive programs. The goal is to achieve a healthy balance between the different parts of the compensation. Remuneration to board members is paid in the form of fixed remuneration after a decision by the general meeting based on a proposal from Norion Bank's election committee. The level of remuneration must be adapted to the authority, task, expertise and responsibility of the respective board member.

Guidelines for remuneration to senior executives, including the CEO, deputy CEO and other persons within the company's management as well as board members, are determined annually at the annual general meeting of Norion Bank. The basis for variable remuneration for other employees is determined annually by the board through an adopted remuneration policy.

Statement of Norion Bank's remuneration according to the Financial Supervisory Authority's regulations

Norion Banks has adopted a remuneration policy which has been developed with the aim of fulfilling the requirements set out in the Financial Supervisory Authority's regulations (FFFS 2011:1) on remuneration policy in credit institutions and credit market companies.

The remuneration policy and the decision-making process for the same

Remuneration policy

The company has established a remuneration policy, in which the framework and basic principles for how remuneration within Norion Bank are to be determined, conditions for fixed and variable remuneration, performance assessment and risk adjustment. The purpose of the policy is to ensure that Norion Bank complies with current regulations and has a sound and stable process regarding the handling of compensation. Norion Bank's board is ultimately responsible for the policy being applied, followed up and revised annually.

The board has established a remuneration committee, whose duties include preparing the remuneration policy and the board's decision on proposed guidelines for remuneration to senior executives. The board must draw up proposals for new guidelines at least every four years and submit the proposal for decision at the annual general meeting.

The decision process

The principles for the payment of fixed and variable remuneration are laid down in Norion Bank's remuneration policy. The person responsible for HR is responsible for updating the policy before the board's approval. Decisions on compensation for board members are made by the general meeting following a proposal from the nomination committee. Remuneration to personnel who are part of company management is decided by the board within the framework of the guidelines for remuneration to senior executives established by the annual general meeting. Remuneration for other staff is negotiated and decided in consultation between the business area manager, HR and in some cases the CEO.

Results assessment and risk adjustment

Norion Bank's assessment of the result that is to be the basis for calculating variable remuneration shall be based mainly on risk-adjusted profit measures where current and future risks, both on and off the balance sheet, shall be taken into account. In the assessment, Norion Bank must also take into account the actual costs of the capital and liquidity that the business requires. The assessment that must be the basis for calculating variable compensation must also be used to determine any bonus pools.

Norion Bank establishes and documents both quantitative and qualitative performance criteria, including financial and non-financial ones, for individuals, for business units and for the institution. The performance criteria must not provide incentives for excessive risk-taking or misleading sales of products. Norion Bank strives for the criteria used to measure risk and results to be as closely linked as possible to the decisions made by the identified employee and the personnel category covered by the performance measurement, and that the criteria must guarantee that the allocation process affects the personnel's behavior on a expedient manner.

When Norion Bank decides how much of the total compensation should be variable, Norion Bank must always ensure that its total compensation does not limit the bank's ability to maintain an adequate capital base or to strengthen the capital base if necessary. If Norion Bank's board decides on variable compensation for risk takers, the employee's performance as well as the relevant performance unit's and Norion Bank's total performance must be taken into account.

The financial criteria that Norion Bank uses as a basis for decisions on remuneration are specified and documented and must also be attached to the board minutes where the decision on variable remuneration has been made.

Risk analysis and controls

Norion Bank regularly performs and adopts a risk analysis with the aim of identifying employees whose job duties have a significant impact on Norion Bank's risk profile. The analysis is carried out at least annually and is adopted by Norion Bank's board of directors. The compliance function is tasked with annually reviewing the Remuneration Policy's compliance with current regulations regarding compensation paid to employees and risk takers in order to identify lack of regulatory compliance.

The Remuneration Committee

To assist the board in matters of remuneration, the board of Norion Bank has established a remuneration committee. The committee is preparing and the board makes all decisions.

The committee shall, without affecting the board's responsibilities and duties, prepare the board's decisions on matters of remuneration principles, compensation and other terms of employment for the CEO, deputy CEO and all members of the management team, as well as, where applicable, follow and evaluate ongoing and completed during the year programs for variable compensation for the management team as well as follow and evaluate the application of the guidelines for compensation to senior executives that the annual general meeting must by law decide on, as well as current compensation structures and compensation levels in Norion Bank.

The committee must consist of at least two board members. The board has established special rules of procedure for the committee, Rules of procedure for the board's remuneration committee.

Remuneration to senior executives

At the annual general meeting on May 4, 2023, guidelines for remuneration and other conditions for senior executives were adopted. According to the guidelines, remuneration to senior executives must be determined in accordance with Norion Bank's remuneration policy, which is based on the Financial Supervisory Authority's regulations on remuneration systems (FFFS 2011:1 and FFFS 2020:30), national implementation of the EU directive on capital requirements for banks as well as international practice for a sound remuneration structure.

Senior executives' salary consists of fixed salary, pension and other benefits. In order to avoid senior executives being encouraged to take unhealthy risks, as a general rule, no variable compensation shall be paid other than what is specified in Norion Bank's guidelines for compensation to senior executives in the event of extraordinary events. The fixed remuneration shall, together with pension provisions and non-monetary benefits, constitute the employee's total remuneration.

In addition, the annual general meeting can, if so decided, offer long-term incentive programs such as share or share price-related incentive programs.

Guidelines for remuneration to senior executives

Information on remuneration

Description of fixed remuneration

Other employees within Norion Bank must receive fixed remuneration, salary, which is paid monthly. The basis of the salary setting regarding the fixed remuneration is based on the degree of difficulty of the work, the individual's experience, responsibility, competence and performance. Norion Bank thus applies individual salary setting with the aim of encouraging good performance, commitment and skill development. Assessment takes place based on Norion Bank's values ​​and salary criteria. The fixed salary is revised annually.

Those responsible for the risk control function and the compliance function must receive compensation in relation to the achievement of the goals linked to their function, regardless of the results in the business areas that the function controls.

Description of variable remuneration

The variable remuneration is based on clear, predetermined and measurable criteria and financial results and individual goals and operational goals set in advance, and must be designed with the aim of promoting long-term value creation. In order not to promote unhealthy risk-taking or otherwise risk Norion Bank's remuneration system entailing risks that customer protection cannot be maintained, Norion Bank has set a ceiling for the outcome of variable remuneration.

The provisions on deferral of compensation found in FI's regulations FFFS 2011:1 are not applicable to Norion Bank, as the bank meets the criteria to be exempt from the regulations.

Variable remuneration may only be paid out or transferred to personnel to the extent that it is justifiable with regard to Norin Bank's financial situation and furthermore justified with regard to the performance of Norion Bank, the relevant business unit and the personnel. The variable compensation must therefore also be able to be completely eliminated for the same reason.

Balance between fixed and variable remuneration

The ultimate framework for the relationship between fixed and variable compensation is regulated in current legislation and may not exceed the ceiling for the outcome of variable compensation decided for each employee category. Variable remuneration may not under any circumstances exceed 100% of the fixed remuneration for each individual.

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Expensed amounts for remuneration in 2023

Expensed total amounts for remuneration divided by business unit (country)

These totals include all remuneration, social security contributions and pension costs. They also include collective staff costs. Board fees are not included in the table below. More information about the total amounts can be found in the bank's annual report for the financial year 2023.