According to the Swedish Companies Act the Annual General Meeting each year, based on proposals from the Board of Directors, shall decide on guidelines for remuneration to senior executives.
These guidelines shall include the President and other persons in the company’s management. The company’s auditors shall not later than three weeks prior to the Annual General Meeting submit a written statement that the guidelines which applied since the previous Annual General Meeting have been complied with.
Auditor’s statement 2014 (pdf)
The Annual General Meeting 2014 adopted the following policy for salaries and other compensation for the President and other senior executives.
Compensation to the President and other members of the Company’s senior management shall comprise of:
- fixed salary,
- possible variable compensation,
- other benefits such as company car, and
”Other members of the Company’s senior management" means a member of the Group Executive Committee, currently nine persons other than the President. The total compensation package shall be at market terms and conditions and competitive on the employment market on which the executive works. Fixed salary and variable compensations shall be related to the executive’s responsibilities and authority.
The variable compensations shall be based on results as compared with defined and measurable targets and shall be subject to a ceiling in relation to the fixed salary. The variable compensations shall not be included in the basis for computation of pension, except in those cases where so provided in the rules of a general pension plan, e.g. the Swedish ITP plan.
For senior executives outside Sweden, all or parts of the variable compensations may be included in the basis for pension computation due to legislation or competitive practice on the local market.
The variable compensation programs should be structured such that the Board of Directors has the possibility, should exceptional circumstances prevail, to restrict the payment of variable compensations, or to decline to make such payment, where such a measure is deemed reasonable and compatible with the Company's responsibilities to its shareholders, employees and other stakeholders.
Consultant fees in line with prevailing market conditions may be payable insofar as any director performs work on behalf of the Company, in addition to the Board work.
The period of notice of termination of employment for senior executives in Sweden shall be six months in the event of termination by the executive. In the event of termination by the Company, the total of the period of notice of termination and the period during which severance compensation is payable shall not exceed 24 months.
Pension benefits shall be either benefit-based or contribution-based or a combination thereof, with individual retirement ages, however in no case earlier than the age of 60. Benefit-based pension benefits are conditional on the benefits being earned during a pre-determined period of employment. In the event the employment terminates prior to the retirement age, the executive shall receive a paid-up policy for earned pension.
For senior executives outside Sweden, the termination period and severance compensation may vary due to legislation or competitive practice on the local market.
The Board of Directors shall be entitled to deviate from the guidelines where special reasons exist in an individual case.
For detailed information regarding current compensation structures, reference is made to note 2 in the Annual Report.
Remuneration to senior executives