Compensation Committee

The compensation committee presents proposals to the Board of Directors regarding the President’s salary and other employment terms, establishes salaries and employment terms for other members of the Group Executive Committee and Establishes salary limits and employment terms for other senior executives. During the year, the compensation committee held five meetings at which minutes were taken. The compensation committee comprises Sverker Martin-Löf (Chairman) and Anders Nyrén. The President is co-opted to the committee but does not participate in discussions concerning his own salary and employment terms.

At the annual general meeting, the Board presents proposals regarding guidelines for the determination of salary and other compensation for the President and other senior executives, for approval by the shareholders. At the 2007 annual general meeting, it was decided that compensation to the President and other senior executives of the Company shall consist of fixed salary, possible variable compensation, other benefits, as well as pension. The total compensation package shall be on market terms and competitive, and related to the executive’s responsibilities and powers. Any variable compensation shall be based on results relative to defined and measurable financial targets and shall be subject to a ceiling relative to the fixed compensation and shall not constitute a basis for pension rights. The Board of Directors shall be entitled to deviate from the guidelines where special reasons exist for doing so. For a further description of the employment terms for the Board and the Group’s senior executives, see Note 2 in the Annual Report for 2007.