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AAK Annual Report 2015

62 Variable remuneration Annual variable remuneration is based on meeting set targets determined on an annual basis. These targets are related to the performance of the Company. Senior management are entitled to up to 110 percent of their annual fixed salary in variable remuneration. Incentive programme The Group introduced an incentive programme for senior managers and key personnel within the Group in 2010. 1,500,000 stock options entitling holders to subscribe for the corresponding number of new shares in AAK AB, whereby the share capital may be increased by up to SEK 15,000,000. A total of 1,390,300 new shares were subscribed for during the period, and the share capital increased by SEK 13,903,000. The incentive programme ended in December 2015.   Stock options have been issued for market-based consideration of SEK 21 per stock option. Each stock option entitles the holder to subscribe for one (1) new share in AAK AB with a quota value of SEK 10. The subscription for shares in AAK AB through the use of share warrants took place during the period from December 1, 2013 up to and including December 1, 2015. 569,400 new shares were registered in 2015 via a new share issue.   The programme resulted in dilution of 3.4%, calculated as the number of additional shares in relation to the number of existing shares plus additional shares. Senior managers and key personnel have purchased stock options at market value, valued in accordance with Black & Scholes. Pension Pensions for senior management are in line with the Swedish KTP plan (corresponding to ITP). Termination benefits The Company has separate agreements with the Chief Executive Officer and senior managers for termination compensation of one year’s salary (fixed cash amount per month x 12 months) on termination by the Company. Neither the Chief Executive Officer nor any senior manager can independently assert the right to termination compensation.   The period of notice of termination by the Chief Executive Officer and senior managers is agreed as 6 months. Termination notice by the Company is agreed as 12 months. Compensation of Board Members Fees are paid to the elected members of the Board in accordance with a resolution of the Shareholder’s Annual General Meeting. This is distributed between the members as decided by the Board of Directors.   No other compensation or benefits have been paid to members of the Board, except travel expenses. The CEO, the secretary to the Board and employee representatives to the Board do not receive any compensation other than for costs in connection with their participation in Board activities.   Under a resolution of the Annual General Meeting, total compensation of elected external members of the Board is set at SEK 2,385,000, including compensation for committee work. Of this amount, the Chairman receives SEK 620,000 and each other external member receives SEK 310,000. Compensation for committee work is distributed, in accordance with a decision of the AGM, as SEK 250,000 to the Chairman of the Audit Committee, SEK 125,000 to other members of the Audit Committee, SEK 100,000 to the Chairman of the Remuneration Committee, and SEK 50,000 to other members of the Remuneration Committee. Remuneration and other benefits for the year1) SEK Salary/Board of Directors' fees Annual variable salary Other benefits2) Pension cost Total Board of Directors Melker Schörling, Chairman 720,000 - - - 720,000 Ulrik Svensson 610,000 - - - 610,000 Lillie Li Valeur 435,000 - - - 435,000 Marianne Kirkegaard 310,000 - - - 310,000 Märta Schörling 310,000 - - - 310,000 Subtotal for Board 2,385,000 - - - 2,385,000 Senior Managers Arne Frank, Chief Executive Officer 9,085,739 6,060,447 3) 196,193 2,706,162 18,048,541 Other senior managers 32,400,890 19,783,680 3) 2,946,768 3,591,180 58,722,519 Subtotal, senior managers 41,486,629 25,844,127 3,142,961 6,297,342 76,771,060 4) Total 43,871,629 25,844,127 3,142,961 6,297,342 79,156,060 5) 1) Refers to items carried as an expense in 2015. 2) Other benefits refer primarily to company cars. 3) Charged in the income statement in 2015 and estimated to be paid in 2016. During the year, variable remuneration expensed in 2014 of SEK 9,592,942 was paid. 4) Refers to the following for 2015: Anne Mette Olesen, Carla Leilani Packness, (as from May 2015), David Smith, Fredrik Nilsson, Gerardo Garza López de Hereida, Jan Lenferink (as from March 2015), Jens Wikstedt, Karsten Nielsen, Octavio Díaz de Léon, Renald Mackintosh, Terry Thomas and Torben Friis Lange. 5) Of the amount of SEK 79,156,060 SEK 38,526,640 relates to the Parent company, AAK AB. Arne Frank, President and Chief Executive Officer, is currently paid an annual fixed salary of SEK 9,085,739 plus the value of a company car. In addition, variable remuneration may be paid up to a maximum of 110 percent of the fixed salary. In 2015, SEK 6,060,447 was carried as an expense for variable remuneration. Arne Frank’s retirement age is 65. To fund the pension obligation, the Company pays annual premiums to a selected insurance company. This premium is set in the Company’s agreement with Arne Frank at 30 percent of his annual fixed salary. The retirement age for other senior managers is 65 years.


AAK Annual Report 2015
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