Group notes

Note 5 Employees and personnel expenses

REMUNERATION AND OTHER FEES FOR MEMBERS OF THE BOARD OF DIRECTORS, THE PRESIDENT AND CEO, AND OTHER MEMBERS OF GROUP MANAGEMENT

Remuneration to the Board of Directors 2025

The remuneration to the Board of Directors is approved at the Annual General Meeting of the shareholders. Remuneration and fees are based on the work performed by the Board. The Annual General Meeting held on May 8, 2025, decided that fees to the Board members elected by the general meeting, until the next Annual General Meeting, should be as follows:

• The Chair of the Board was granted an amount of SEK 2 960 000.
• Each of the other Board members not employed by the Group were granted SEK 930 000.
• An amount of SEK 372 000 was granted to the Chair of the Audit Committee and SEK 242 000 to each of the other members of this committee.
• An amount of SEK 172 000 was granted to the Chair of the Remuneration Committee and SEK 125 000 to each of the other members of this committee.
• An amount of SEK 85 000 to each non-executive director who, in addition, participates in committee work decided upon by the Board.

The Board members may choose to receive their whole remuneration in cash or 50% of the remuneration in cash and 50% of their remuneration in the form of synthetic shares. The synthetic shares received will be based on an average of the closing price of A-shares during ten trading days following the publishing of the first quarter results 2025. The payment of each synthetic share is made in 2030 and corresponds to the average price during the ten trading days after the publishing of the first quarterly result in 2030. The synthetic shares also carry the right to a recalculation in order to take into account the value of any dividend paid on Epiroc’s shares during the period the synthetic shares have been held.

Five Board members accepted the right to receive synthetic shares. The number and costs at grant date and at the end of the fiscal year are disclosed by Board member in the table “Remuneration and other benefits to the Board of Directors”.

Remuneration to Group Management

The principles for the remuneration to the members of Group Management are adopted by the general meeting of the shareholders in the Guidelines for Senior Executive Remuneration. The present guidelines were adopted by the Annual General Meeting 2025. These approved guidelines are outlined below. They will be in force until the Annual General Meeting 2029 unless the Board before then finds a need for material amendments and proposes to the general meeting to adopt such amendments.

Group Management consists of the present President and CEO and five other members. The compensation to Group Management consists of base salary, variable compensation, possible long-term incentive, pension benefits and other benefits.

President and CEO

The variable compensation can provide a maximum of 70% of the base salary. The variable compensation is not included in the basis for pension benefits. 
The President and CEO is a member of the Epiroc group pension policy for executives in Sweden, which is a defined contribution plan. The contribution is age related and 35% of the base salary for the President and CEO. The retirement age is 65. 
The President and CEO is entitled to severance pay of 12 months if the Company terminates employment and a further six months if the President and CEO has not been engaged in a new employment contract. 
The President and CEO is eligible to a performance related employee stock option plan during 2025. Further information about the plan is found in note 25.

Other members of Group Management

The variable compensation can provide a maximum of 40-60% of the base salary depending on position.

Members of Group Management locally employed in Sweden have a defined contribution pension plan, with contribution ranging from 30% to 35% of the base salary depending on age. The variable compensation is not included in the basis for pension benefits. The retirement age is 65. One member is on expatriate terms and conditions and on a defined contribution pension plan with contributions related to the home country pension plan. One member is locally employed in the US with a defined contribution pension plan according to local market practice.

Other benefits mainly consist of company car and private health insurance. One member is on expatriate terms and conditions and receive benefits according to the Epiroc Group Expatriate Policy and one member is locally employed in the US with benefits according to local market practice.

Other members of Group Management are entitled to severance pay if the Company terminates their employment. The amount of severance pay is dependent on the length of employment with the Company and the age of the executive, but never more than 24 months’ salary.

Stock Options, holdings for Group Management

Group Management is eligible for a performance based employee stock option plan during 2025. The stock options holdings as of December 31, 2025, are detailed below. Further information about the plan is found in note 25.

Performance based employee stock option plan

It is important that key personnel at Epiroc have a long-term interest in good value development of the shares of the Company and align their performance in a manner that enhances such development. In particular, this applies to the group of key personnel that consists of the senior executives. It is also the assessment of the Board that a share related employee stock option program increases the attractiveness of Epiroc on the global market and enhances the possibility to recruit and keep key personnel in the Group.

Guidelines for senior executive remuneration, as adopted by the Annual General Meeting 2025
The President and CEO and the other members of Group Management fall within the provisions of these guidelines and are hereinafter referred to as “senior executives”. The guidelines are forward-looking, i.e., they are applicable to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the Annual General Meeting 2025. These guidelines do not apply to remuneration decided or approved by the general meeting.

The guidelines’ promotion of the company’s business strategy, long-term interests and sustainability

For more information regarding the Company’s business strategy, see chapter “Value-creating strategy”. A prerequisite for the successful implementation of the Company’s business strategy and safeguarding of its long-term interests, including its sustainability, is that the Company is able to recruit and retain qualified personnel. To this end, it is necessary that the Company offers competitive remuneration.

Long-term share-related incentive programs have been implemented in the Company. Such programs have been decided, and any future such program will be decided, by the general meeting and are therefore excluded from these guidelines. For more information on the existing programs, see note 25.

Types of remuneration, etc.

The remuneration may consist of a base salary, annual variable compensation, pension contributions and additional benefits and shall be on market terms. Additionally, the Annual General Meeting may, irrespective of these guidelines, decide on, among other things, share-related or share price-related remuneration.

Base salary

The base salary shall reflect the position, competence and individual performance.

Variable cash remuneration

The satisfaction of criteria for awarding variable cash remuneration shall be measured over a period of one year. The variable cash remuneration compensation is limited to a maximum of 70% of the base salary. The variable cash remuneration shall be linked to criteria that can be financial or non-financial. The financial goals may be in relation to, for example, value creation, and development of revenues, operating profit or working capital. The goals may be individualized, quantitative or qualitative objectives. The objective with the variable cash remuneration is to promote the fulfillment of annual short-term goals in line with the company’s business strategy and long-term interests, including its sustainability. Further variable cash remuneration may be awarded in extraordinary circumstances, provided that such extraordinary arrangements are limited in time and only made on an individual basis, either for the purpose of recruiting or retaining executives, or as remuneration for extraordinary performance beyond the individual’s ordinary tasks. Such remuneration may not exceed an amount corresponding to 100% of the annual base salary. Any resolution on such remuneration shall be made by the Board of Directors based on a proposal from the remuneration committee.

To what extent the criteria for awarding variable cash remuneration has been satisfied shall be evaluated/determined when the measurement period has ended. The remuneration committee is responsible for the evaluation so far as it concerns variable remuneration to the President and CEO. For variable cash remuneration to other executives, the President and CEO is responsible for the evaluation.

Right to reclaim and withhold variable cash remuneration

The Board of Directors shall have the possibility to partially or fully reclaim payments, if these are made on incorrect grounds for example in breach of Epiroc’s Code of Conduct, if possible, according to contractual provisions and applicable law. The Board of Directors shall under exceptional circumstances have the possibility to adjust payment of variable compensation, to protect the company’s long-term interests provided it is possible according to contractual provisions and applicable law.

Pension benefits

The pension benefits shall be defined contribution to a maximum of 35% of the base salary. Variable cash remuneration shall not qualify for pension benefits if not stipulated by mandatory law or by collective agreement covering the executive.

Other benefits

Other benefits may include, for example, life insurance, private medical insurance and company cars. Premiums and other costs relating to such benefits may amount to not more than 15% of the base salary.

Conditions for expatriates, etc.

For a senior executive working on an international assignment outside of own home country, certain other benefits apply in compliance with the Company’s Conditions for Expatriate Employees. For executives employed in other countries than Sweden the pension and other benefits will be according to local market practice.

Termination of employment

In case of termination of employment of a senior executive by the Company, the compensation can amount to a maximum of 24 months’ base salary depending on age, length of employment and possible income from other economic activity or employment. When the executive terminates employment, the period of notice is six months. The executive will in the latter case not be entitled to severance pay unless bound by a non-compete obligation.

Salary and employment conditions for employees

In the preparation of the Board of Directors’ proposal for these remuneration guidelines, salary and employment conditions for other employees of the company have been taken into account. This is done by including information on the employees’ total remuneration, the components of the remuneration and increase and growth rate over time, in the remuneration committee’s and the Board of Directors’ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.

The decision-making process to determine, review and implement the guidelines

The remuneration committee’s tasks include preparing the Board of Directors’ decision to propose guidelines for senior executive remuneration. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and submit it to the general meeting. The guidelines shall be valid until new guidelines are adopted by the general meeting. The remuneration committee shall also monitor and evaluate programs for variable remuneration for executive management, the application of the guidelines for senior executive remuneration as well as the current remuneration structures and compensation levels in the Company.

Deviations from these guidelines

The Board of Directors may resolve to deviate from these guidelines, in whole or in part, if in a specific case there is special cause for the deviation and the Board deems a deviation is reasonable to serve the company’s long-term interests or to ensure the company’s financial viability. As set out above, the remuneration committee’s tasks include preparing the Board of Directors’ resolutions in remuneration-related matters. This includes any resolutions to deviate from the guidelines.