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. 

Performance Share Program 2024/2027

The Annual General Meeting 2024 resolved to implement a long-term performance share program ("Performance Share Program 2024/2027").

The Performance Share Program 2024/2027 is directed to not more than twelve members of the executive management team.

Each participant needs to invest in or allocate previously held shares in Castellum ("Investment Shares"), corresponding to one monthly gross salary (two monthly gross salaries for the CEO).

Each participant is granted performance share rights ("Performance Share Rights"), free of charge (of which 50 percent are Performance Share Rights of series A and 50 percent are Performance Share Rights of series B) corresponding to a value of six monthly gross salaries (seven and a half monthly gross salaries for the CEO).

Allotment of performance shares after the end of the program requires that the Investment Shares have been retained during the vesting period, that the participant has remained in its employment with Castellum throughout the vesting period and that the minimum performance targets levels are achieved.

Performance Share Rights of series A – total return on the Castellum share in absolute term

Allotment of Performance Share Rights of series A – total return on the Castellum share in absolute terms is conditional upon that the total return of the Castellum share in absolute terms during the period 1 January 2024 – 30 April 2027 (the "Measurement Period") amounts to, or exceeds, ten (10) percent. If the total return during the Measurement Period amounts to ten (10) percent, 25 percent of the maximum number of Performance Shares that may be allotted on the basis of Performance Share Rights of series A will be allotted. Maximum allotment is conditional upon that the total return during the Measurement Period amounts to, or exceeds, 50 percent. If the total return during the Measurement Period amounts to between 10 and 50 percent, allotment is calculated linearly between 25 percent and 100 percent.

The total return on the Castellum share in absolute terms shall be calculated as follows: The entry price shall correspond to the average price of the Castellum share during January - April 2024. The comparison price shall correspond to the average price of the Castellum share during January - April 2027. When calculating the entry price and the comparison price, the average share price shall be deemed to correspond to the average of the highest and lowest bid prices calculated for each trading day according to Nasdaq Stockholm's official list prices. In the absence of a quoted price paid, the bid price quoted as the closing price shall instead be included in the calculation. A day without listings of either the price paid or the bid price shall not be included in the calculation. When calculating the total return for the Castellum share, dividends received by shareholders during the Measurement Period shall be considered. If dividends are paid during the period for calculating the average entry price or comparison price, the share price for the days the share is traded, including dividends, shall be reduced by the dividend amount. The total return of Castellum shares during the Measurement Period is recalculated as a percentage.

Performance Share Rights of series B – total return on the Castellum share in comparison with CRERX (Carnegie Real Estate Return Index)

Allotment of Performance Share Rights of series B – total return on the Castellum share in comparison with CRERX (Carnegie Real Estate Return Index) is conditional upon that the total return on the Castellum share exceeds the performance of CRERX during the Measurement Period. Maximum allotment is conditional upon that the total return compared to CRERX during the Measurement Period exceeds five (5) percentage points. Allotment is calculated linearly between zero (0) percentage points and five (5) percentage points. The calculation of the total return of the Castellum share in comparison with CRERX shall be made as follows: The total return of the Castellum share shall be calculated in accordance with what is stated above regarding Performance Share Rights of series A. The entry index shall correspond to the average index for CRERX during January – April 2024. The comparison index shall correspond to the average index for CRERX during January – April 2027. The comparison between the total return of the Castellum share and the development of CRERX is made on a percentage basis.

Castellum may, under Performance Share Program 2024/2027 transfer a maximum of 172,000 shares in Castellum. 132,270 shares in Castellum may be transferred to participants in the Performance Share Program 2024/2027 and 39,730 shares in Castellum may be transferred to a third party for the purpose of bringing in capital to cover the exposure towards social security contributions that may arise based on the allotment of performance shares. 

A description of outstanding incentive programs adopted prior to the Annual General Meeting 2024 can be found in Note 9 in Castellum's Annual Report 2023.

Profit and share price based incentive programs

At present, Castellum has two ongoing earnings and share price-related incentive plans for the periods 2022–2024 and 2023–2025.

The incentive plans for 2022–2024 and 2023–2025 comprise two components: a one-year earnings-related component (STI) and a three-year share price-related component (LTI):

• An earnings-based portion that is based on a comparison between income from property management per share and on an overall assessment of the performance of individually determined factors that the Board chose to prioritise during the financial year in question. The profit-based component is paid out yearly as salary after the year-end closing and can total no more than six months’ fixed salary per year. If income from property management per share is equal to or exceeds a 10 per cent annual growth rate, variable remuneration will be paid at 37.5 per cent of the fixed annual salary of the senior executive concerned. When growth is in the 0–10 per cent range, the outcome will be calculated on a linear basis. For those senior executives who are participating in the program, the earnings comparison will pertain to the Castellum Group as a whole. For the respective Regional Managing Directors, the comparison will pertain to both the entire Castellum Group and the parent company in the sub-group for which the Regional Managing Director is responsible. The outcome of the individually determined factors should be evaluated in the form of an overall assessment, taking all parameters decided upon into account. When assessed, the variable remuneration is set in the range between 0 to 12.5 per cent of the fixed annual salary. The outcome for 2023 was 30 per cent (97), representing a cost of SEK 5 M (3) including social security contributions.
• A three-year share price-based remuneration that is based on the total return on the Castellum share in absolute numbers, as well as the total return on the Castellum share in comparison to real estate share indexes during the measurement period. Full variable remuneration under the three-year plan requires the total return to be at least 50 per cent during the period and the total return has to exceed the index performance by at least 5 percentage points during the period. For outcomes in the range from 0 to 50 per cent and 0 to 5 percentage points respectively, variable remuneration of between 0 and 25 per cent of the fixed annual salary as calculated on a linear basis. Share price-based remuneration has a three-year performance and vesting period, and the maximum outcome totals one half of the annual salary for the three-year period.
  
  Payment will occur in the form of salary, whereupon the executive will undertake to purchase Castellum shares for at least half of the net amount of the remuneration to be paid. Capitalisation will occur over the vesting period with a new assessment yearly. Final determination and settlement will take place in January 2025 and January 2026.