Remuneration at Swedbank
Remuneration at Swedbank is aimed at attracting and retaining a diverse workforce with the ability, experience and skills to deliver on Swedbank’s strategy in an inclusive and equal work environment.
Remuneration philosophy
Swedbank applies a total remuneration approach which aims to counteract excessive risk-taking and incentivise employees to deliver sustainable performance that is consistent with Swedbank’s strategic goals, the interest of the shareholders and customers as well as healthy and effective risk management. Remuneration is individually based and shall encourage employee performance in line with Swedbank’s goals, strategy and vision as well as individual behaviours that are consistent with Swedbank’s values (Open, Simple, Caring).
Swedbank offers competitive but not market-leading remuneration that is derived from business and local market needs and set independently of gender, transgender identity or expression (i.e. gender-neutral), sexual orientation, race, colour, ethnic or social origin, genetic features, language, membership of a national minority, property, birth, political opinion, religion or other belief, disability or age. Remuneration at Swedbank is aimed at attracting and retaining a diverse workforce with the ability, experience and skills to deliver on Swedbank’s strategy in an inclusive and equal work environment.
Remuneration components
The majority of employees at Swedbank have both fixed and variable remuneration components which, including pension and other benefits, represents their total remuneration. Total remuneration is market-based and is designed to achieve a sound balance between fixed and variable remuneration.
Fixed remuneration
Fixed remuneration constitutes the primary component of remuneration at Swedbank. It reflects the nature and responsibility of the position held, individual employee performance and market conditions. Pension benefits are generally granted in accordance with collective bargaining agreements, rules and practice in the country where each employee is permanently resident.
Variable remuneration
Variable remuneration is a component of remuneration which aims to incentivise specific behaviours and desired results, create an alignment between the rewards and risk exposure to those of the shareholders, and provide motivation. Variable remuneration serves as an incentive to realise the business strategy of Swedbank, and to encourage employees to make efforts to strengthen the long-term value of Swedbank.
Variable remuneration is based on relevant, predetermined and measurable criteria, set with the purpose of increasing Swedbank’s long-term value. Variable remuneration is primarily based on a common risk-adjusted profit measure. Both current and future risks are taken into consideration, as well as actual costs for capital and liquidity. A multiple-year perspective is applied to ensure long-term sustainability of profits considering underlying business cycles and risks at the time of payout.
Members of the bank’s Group Executive Committee are not eligible for participation in Swedbank’s variable remuneration program.
The average allocation amount in Swedbank's common share-based variable remuneration program (Eken) would correspond to 50 per cent of a monthly salary for the employees, outside of the Baltic countries, who met their annual performance targets, provided that the bank has reached its Group target of achieving a RoE of 15 per cent.
Risk management and sustainability
Sound risk-taking is incorporated in Swedbank’s business strategy. There should be an alignment between the rewards and risk exposure of shareholders and employees. Remuneration should counteract excessive risk-taking and incentivise employees to deliver sustainable performance that is consistent with strategic goals as well as healthy and effective risk management.
Swedbank integrates ethical, social, environmental and economic considerations in all its business decisions, operations and business development. Within Swedbank’s Performance Development process, individual performance criteria are set to contribute to and support Swedbank’s overall strategic direction, in which sustainability plays an important part.
Further, sustainability risks are integrated in Swedbank’s remuneration practices, such as acting in accordance with Swedbank’s values, as well as applying deferral periods and the delivery of variable remuneration in instruments for the majority of employees. Lack of compliance with external or internal regulations or deficiencies in risk management capabilities are circumstances that will be considered inconsistent with Swedbank’s values.
Overall targets to deliver sustainable performance that is consistent with the strategic goals as well as with sound and efficient risk management are defined for Swedbank. On a CEO and Group Executive Committee level, Swedbank has sustainability KPIs and targets on which the progress is followed up by the Board of Directors in the bank’s performance management framework. The KPIs include prioritised sustainability areas and are linked to Swedbank’s long-term sustainability performance, such as improving employee engagement, setting validated science-based emission reduction targets, reducing the bank's financed emissions and increasing the volume of sustainable financing.
The overall targets are cascaded from the CEO to the top executives in the bank and downwards as applicable to each part of the organisation and their role to enable the bank to deliver on the set Strategic Direction. Top executives’ performance is assessed based on results and behaviours that ensure long-term and sustainable results for the bank; their performance is an element that impacts their remuneration through fixed salary over time.
Governance
Swedbank’s remuneration policy states the foundations and principles for establishing remunerations within Swedbank. Swedbank’s Board of Directors’ decision to introduce the remuneration policy was preceded by and based on an analysis of the risks associated with Swedbank’s remuneration system and policy. The CEO recommends remuneration proposals for submission to the Board’s Remuneration and Sustainability Committee. The Committee prepares matters concerning remuneration prior to discussion and decisions by the Board of Directors. The Committee also prepares matters concerning remuneration to be decided by the Annual General Meeting.
Further, all remuneration to the CEO and other top executives must be paid in accordance with Swedbank’s guidelines on remuneration to top executives as decided by the Annual General Meeting (see guidelines provided through link below).
Management and corporate governance at Swedbank
Report on paid and outstanding remuneration for senior executives (pdf)
Guidelines for remuneration to senior executives (pdf)