Annual Report 2009
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Note 27
Remuneration to leading executives
Principles
Remuneration is paid to the chairman and board members in accordance with the decision of the annual stockholders' meeting.Remuneration to the President and other leading executives consists of their basic salary, flexible remuneration and pension benefits. The leading executives are the five persons who together with the President constitute the corporate management. For the composition of the corporate management, see The Board.
The division between basic salary and flexible remuneration must be proportional to leading executives' responsibilities and powers. For the President, the flexible remuneration is a maximum of 50% of the basic salary. For other leading executives, the flexible remuneration is a maximum of 30% of the basic salary. Pension benefits are included as part of the total remuneration.
Remuneration and other benefits in 2009
Notes on the table:
Board fees have been paid monthly from May 2003 at 1/12 of the remuneration decided by the stockholders' meeting. Fees paid have been recognized in the financial statements. The above remuneration refers to expenses that have affected net income/loss for the year.
The group has both fee defined and benefit defined pension plans. Both plans are accounted for under fee defined. Pension expenses refer to the expenses that have affected net income/loss for the year.
The Chairman of the Board has not received any remuneration in addition to the board fee.
Board fees have been paid monthly from May 2003 at 1/12 of the remuneration decided by the stockholders' meeting. Fees paid have been recognized in the financial statements. The above remuneration refers to expenses that have affected net income/loss for the year.
The group has both fee defined and benefit defined pension plans. Both plans are accounted for under fee defined. Pension expenses refer to the expenses that have affected net income/loss for the year.
The Chairman of the Board has not received any remuneration in addition to the board fee.
Bonuses
The president's bonus is based on Group results and individual targets. The targets are established by the board of directors. The maximum bonus which may be paid to the president is 50% of the basic salary. The bonus for the 2009 calendar year was 38% of basic salary. In 2009, the bonuses of other leading executives were based both on individual targets and Group sales and earnings. Leading executives responsible for sales also receive a commission on sales for their area of responsibility. In 2009, average bonuses for leading executives amounted to 16 % of their basic salaries.Other benefits
Other benefits consist of benefits for cars, petrol, travel and computers.Financial instruments etc.
The company has two outstanding option programs.The first is addressed to all employees and was launched in 2007 and expires in May 2010. The program includes a total of 3,500,000 options. The second option program was initiated for the executive group, launched in 2008 and expires in May 2011. The program includes a total of 2,500,000 options.
For further information, see Note 19.
Pensions
The retirement age for the President is 65. Pension premiums shall amount to a maximum of 25% of the fixed salary from the parent company. For other leading executives, the retirement age is 65. Under the pension agreement, pension premiums are calculated based on a scale relating to age and salary.For the highest current age interval, the premium amounts to 7% of the pensionable salary up to 7.5 of the base amount, 42% of the pensionable salary between 7.5 and 20 of the base amount and with 22% of the pensionable salary for salaries over 20 of the base amount.
Severance pay
There is a mutual period of 6 month’s notice for the Company and the President. In addition, severance pay equivalent to 12 month salary will also be paid if the President is given notice by the Company.A notice period of 3-6 months applies between the Company and other leading executives. No severance pay will be paid for other leading executives.
Change in control
There are no agreements between the company and its employees, apart from employment contracts the main part of which have been commented on above, under which payments must be made to employees if their employment is terminated as a result of a public takeover bid.Planning and decision-making process
The company has established a compensation committee which deals with salaries, pension terms and conditions, incentive programs and other terms and conditions of employment for the company executive. The compensation committee is made up of the entire board of directors. Remuneration to the President for the fiscal year 2009 has been decided by the board.Remuneration to other leading executives has been decided by the President in consultation with the chairman.The stockholders' meeting on April 22, 2009 resolved to adopt the guidelines for deciding salaries and other remuneration for the president and other leading executives proposed by the Board.