Corporate Governance

Annual general meeting 2020

The Annual General Meeting was held in Stockholm 5:00 p.m. on Wednesday, May 6, 2020.

 

Board of Directors

Bengt Stillström

Born 1943, M. Sc. (Eng.) and Master of Management. Chairman of the Board. Founded Traction in 1974. CEO during the period 1974-2001. Director of, among other, Profilgruppen and Ringvägen Venture. Director since 1974. Shareholding, including wife’s holding: 330,000 class A shares, 5,451,450 class B shares.

Henrik Lange

Born 1961, B. Sc. (Economics). Henrik is currently director of Alfa Laval, IPCO, Thomas Concrete Group, Velux A/S and the German-Swedish Chamber of Commerce. Director of Traction since 2020. Extensive experience of senior positions in industrial companies, including CEO of Gunnebo and Johnson Pump, as well as leading positions at SKF such as division manager and CFO. Shareholding: 0 shares.

Jonas Olavi

Born 1967, M. Sc. (Economics). Director of Kungsleden, columnist in the finance magazine Aktiespararen, and runs the finance and stock market focused podcast Börssnack. Director of Traction since 2020. Previously, head of allocation at Alfred Berg Kapitalförvaltning, head of Equity and Fixed Income Strategies at Nordea, as well as leading positions in the financial industry such as fund manager at Micheal Östlund & Company and CEO of Delphi Fonder. Shareholding: 0 shares.

Petter Stillström

Born 1972, M. Sc. (Business Administration), CEO since 2001 and director since 1997. Chairman of Nilörn, OEM International and Softronic, and director of BE Group and Hifab Group. Director since 1997. Shareholding, via wholly owned company and closely related parties: 1,095,000 class A shares, 1,677,150 class B shares and part owner of Niveau Holding AB.

Auditor

Mazar SET, Chief Auditor Anders Bergman, Authorised Public Accountant. Traction’s auditor since 2015.

 

Remuneration

At the Annual Generel Meeting on May 6, 2020, the following guidelines for remuneration to senior executives were adopted.

 
The Board of Directors proposed guidelines for determining remuneration to the CEO. The guidelines also apply any remuneration to directors. The guidelines shall apply to remuneration that is agreed after the AGM 2020 and to changes in already agreed remuneration that are made thereafter. The guidelines do not include remuneration decided by the AGM.

Guidelines for supporting the company’s business strategy, long-term interests and sustainability
Traction is unique. The company’s CEO is also the company’s largest owner. The company has a very limited group of employees and therefore no group management besides the CEO, which is why the guidelines for remuneration to the CEO also apply to the company management.

The forms of compensation etc.
The compensation consists of the following components:
– The fixed salary must consist of cash salary.
– No variable salary is paid.

An amount is reserved annually for the CEO’s pension, which is calculated annually with interest. Traction does not need to make any provision for this commitment, as sufficient funds to secure the amount have already been set aside in Traction’s pension foundation.

Other benefits, which include car benefit, health care allowance and health insurance, must be market-based and constitute only a limited portion of the total compensation.

The total remuneration to the CEO must always be less than a corresponding market-based remuneration.

Terms of termination
There is no agreed minimum notice period. Severance pay cannot be paid.

Remuneration to directors
In special cases and for a limited time, Traction’s directors may be remunerated for services within their respective area of ​​expertise which does not constitute Board work. For these services (including services performed by a board member wholly-owned company), a market-based remuneration shall be paid.

 
Preparation and decision-making process
The Board of Directors consists entirely of remuneration committees, except that directors who are also senior executives of the company do not participate in the work or attend a decision.

Deviating from the guidelines
The Board of Directors may decide to deviate from the guidelines in whole or in part if there are special reasons for this in an individual case and a departure is necessary to meet the company’s long-term interests, including its sustainability, or to ensure the company’s financial viability.

Sustainability

Traction is an investment company with ownership interest in several companies in different industries, in varying phases of development and geographic focus. Traction’s ability to influence the development of the holdings varies depending on its’ ownership stake and the willingness of other shareholders to adhere to Traction’s approach. However, Traction’s employees, as well as the boards of directors of the project companies, are always expected to ensure that project company management groups attach great importance to the ongoing sustainability efforts that must be adapted to each respective company’s situation and local conditions.

Traction’s development model is based on the assumption that each respective management group and board of directors follow prevailing laws and regulations and always act ethically and in a commercially sound manner. This means that Traction has zero tolerance of human rights violations, extortion, corruption, child labour, forced labour, discrimination, etc. Traction also expects risks to be analyzed and goals to be formulated and that each company has appropriate processes in place to manage and monitor sustainability risks. Virtually every human activity and enterprise has some sort of impact on the environment. For Traction, sustainable operations ensure that the environmental impact is minimized and that the environmental impact is balanced against the benefits supplied.

Traction avoids getting engaged in companies that are not deemed to add value for its customers or society at large, instead contributing to tragedies such as addiction, poverty, deaths and other unnecessary suffering. Examples hereof are companies involved with drugs, tobacco, armaments, casino operations and gaming companies, whose purpose is to entice their customer to become addicted to gambling, thereby squandering their savings potential. Nor do certain credit-granting companies, whose existence depends on their customers’ desperate need for liquidity, fit in with Traction’s investment criteria.

Ownership policy for listed holdings

  • A company shall always be run on behalf of its owners and to afford the maximum possible return to those owners.
  • Major shareholders should be represented on the company’s Board of Directors.
  • A principal owner has the ultimate responsibility for to initiate changes to operations through the company’s management, the composition of its Board of Directors, major transactions and acquisitions.
  • A principal owner should consult with other major owners and explain the owners’ intentions to the Board of Directors and corporate management, and ensure that suggestions for new board members are presented.
  • The Board of Directors and management shall also gather and embrace the intentions of the owner and work in line with the specified orientation.
  • Takeover bids, mergers and major acquisitions should in the first instance be handled by the principal owner.
  • The Chairman of the Board of Directors, or the principal owner, must obtain support for major structural changes from the largest owners.
  • A principal owner may not grant favours to himself or herself at the expense of the company, but shall be entitled to reasonable compensation for his or her participation in the management of the company.
  • In the absence of a principal owner, the major shareholders should consult and formulate a form of corporate governance to compensate for the lack of a principal owner.
  • In the absence of a principal owner, or a group of major owners who assume responsibility, it shall be incumbent upon the Chairman, with the aid of the Board of Directors, to compensate for such lack of to the best of his or her ability.
  • The Board of Directors should be composed of persons with large personal shareholdings and other persons who can contribute to the development, and who have time to be actively involved.
  • The composition of the Board of Directors should be such that it includes numerous different skills, fields of experience and contact interfaces.
  • Traction wants to see a business-like and active Board of Directors that knows its company and its business environment well, and who can complement and support the CEO.
  • The Board of Directors shall make decisions regarding the company’s strategies, orientation, major transactions and other significant changes.
  • The Board of Directors shall exercise effective control over the company’s finances, risks and opportunities.
  • The Board of Directors works on behalf of the owners.
  • As a major owner, Traction always wants to participate in the nomination committee work.
  • The nomination committee should be composed of representatives of the owners. If ownership ceases, the representative in question should immediately resign from the nomination committee.
  • Traction wishes at all times to appoint at least one director in companies in which Traction has a major shareholding. Option programmes to employees should only be offered if the employee invests a market equity contribution.
  • Private placements with new, major owners may be suitable in the case of smaller companies, which thereby can avoid negative effects on the market price on the share and also get a better ownership structure.