Remuneration at AP4

AP4’s role as a manager of Swedish national pension funds requires that the remuneration levels for the Fund’s employees, including the CEO, are reasonable, justifiable and explainable.

In general AP4 strives to ensure that its employees’ remuneration on the whole is in line with the market and enables AP4 to attract and retain talented employees. AP4 shall not be a salary leader, however.

AP4’s board of directors

AP4’s board is responsible for addressing remuneration issues in a purposeful, responsible and transparent way. Each year the Board adopts the principles governing remuneration and other terms of employment for AP4’s employees.

In addition, the Board conducts an annual follow-up of how these principles have been applied at AP4 during the preceding year, and verifies and certifies that the government’s guidelines on terms of employment for senior executives of the AP Funds have been adhered to. As part of this work, with the support of external consultants the Board regularly conducts comparisons of AP4’s remuneration levels for both members of the Executive Management and other employees using salary statistics from relevant, comparable employers in the market.

Remuneration Committee

The Remuneration Committee is appointed by the Board and includes three members. The committee serves in an advisory, monitoring and drafting role for the Board for remuneration matters concerning the CEO and senior executives of AP4.

The Remuneration Committee conducts drafting work for important remuneration decisions in addition to handling other related duties delegated to it by the Board.

The committee also conducts drafting work for other matters concerning AP4’s remuneration principles and other terms of employment for all employees, and is responsible for monitoring application of these principles. Finally, the committee conducts drafting work behind the assessment of AP4’s compliance with the government’s guidelines for terms of employment for senior executives of the AP Funds.

The AP Funds’ joint policy

A joint policy for remuneration principles, employee benefits, entertainment and business travel for the First, Second, Third, Fourth, Sixth and Seventh AP Funds was formulated in 2012 and was adopted by AP4’s board. This joint, overarching policy is complemented by AP4’s more detailed employee-related policies and guidelines, including AP4’s remuneration policy. The policies and guidelines referred to above are subject to annual review.

AP4’s remuneration policy

According to AP4’s remuneration policy, an employee’s total remuneration consists of a fixed salary, variable salary, pension and other benefits. No variable salary is payable to the CEO, senior executives, the head of Risk Control and the Compliance officer.

Fixed salary

Fixed salary shall be in line with the market and competitive, but not market-leading. Salaries are set on an individual basis and are commensurate with the level of responsibility and degree of difficulty of the work involved, as well as with the competence and capacity required for each employee’s work.

Variable salary

Each year the Board of Directors approves a plan for variable remuneration for all of AP4’s employees. No variable salary is payable to the CEO, senior executives, the head of Risk Control or the head of Compliance. The plan provides an opportunity to receive a maximum of two months’ salary based on the achievement of predetermined targets based on objective criteria. The targets included in the plan are designed to balance collective achievements with the individual employees’ contributions to and responsibility for AP4’s overall performance during a rolling three-year period. A variable remuneration award is paid out only if AP4 posts a profit in absolute terms for year that the variable remuneration pertains to.


AP4 applies the so-called BTP plan under applicable collective agreements with BAO (the Employers Organisation of Swedish Banking Institutions) and SACO (the Swedish Confederation of Professional Associations) for all employees except for the CEO. Employees hired after 1 April 2008 with salaries higher than 10 times the Income Base Amount receive Alternative BTP, a defined contribution pension solution whereby pension premiums are paid in an amount corresponding to 30 % of the employee’s salary that is higher than 7.5 times the Income Base Amount. For other employees, unless otherwise agreed a mainly defined benefit retirement pension applies, according to the BTP plan. The CEO is entitled to retirement at 65 years of age and receives pension provisions corresponding to 30 % of his salary.

Salary exchange/enhanced occupational pension

All employees are entitled to exchange a portion of their gross salary for pension contributions in way that is cost-neutral for AP4.

Other benefits

The combined value of other benefits is of limited value in relation to employees’ total remuneration. Examples of other benefits include supplementary health insurance, group insurance and a fitness subsidy. AP4 encourages its employees to take advantage of their parental leave benefits and therefore compensates
part of the difference between salary and the parental leave benefit. AP4 has four parking spaces that the employees can use, for which they are taxed as an employment benefit.

Notice period/severance pay

A notice period for end of employment applies in accordance with the rules of the collective agreement between BAO and SACO for all employees except for the CEO. For the CEO, a mutual notice period of six months applies. In the event AP4 serves notice, the CEO may also be entitled severance pay of 18 months’ salary. Upon new employment or for income earned from an own business, the remuneration during the notice period or severance pay is to be reduced by an amount equivalent to the new income.

The Board’s follow-up of salaries in 2019

During the year, the Board commissioned a salary survey for all employees based on the guidelines of the Discrimination Act as well as an external market comparison. The salary survey that was conducted from a gender equality perspective showed in summary that there are no significant differences in salary with respect to equal work, work of equal value, or in female-dominant work categories. The external market comparison that was conducted covered all of AP4’s employees including the Fund’s senior executives. The market comparison was conducted of salaries for equivalent positions in the financial sector in Sweden
working with long-term asset management. One of the aims of the market comparison is to ensure that AP4’s salaries are in line with the Fund’s remuneration policy and the government’s guidelines for terms of employment for senior executives of the AP Funds, and thus to ensure that AP4’s remuneration levels are
reasonable and justifiable without being market-leading, at the same time that they are in line with the market and competitive.

The comparison, analysis and compilation of the external market salary comparison were performed by the external consulting firm Willis Towers Watson, whereby the documentation was obtained from its annual salary and benefits survey for the financial sector in Sweden. Each employee’s remuneration was compared with corresponding positions of a group of financial sector actors in Sweden that work with long-term asset management. These are judged to compete for personnel with corresponding responsibilities, experience and expertise required by AP4 for
fulfil its mission. After review of the comparative analysis results, the Board could conclude that AP4 applies remuneration levels that are within established guidelines and that AP4’s salaries are competitive, reasonable and justifiable without being market leading. In addition, it was determined that remuneration of
senior executives is in accordance with the guidelines for terms of employment for senior executives of the AP Funds.