64 127(±5(081(5$7,212)7+(%2$5'2)',5(&7256$1'6(1,25(;(&87,9(6 Principles The principles for the remuneration of senior managers (Group management) at AAK, in both the Parent company and the Group, are designed to ensure that AAK can offer internationally competitive remuneration that can attract and retain qualified managers. Consideration and determination Compensation of the Chief Executive Officer and other senior managers is considered by the Remuneration Committee of the Board of Directors and all decisions are made by the Board as a whole. Components of remuneration Total remuneration includes salary, annual variable remuneration, pension, car allowance, and termination benefit. Salary Fixed salary, individually determined and differentiated according to responsibility and performance, is determined on competitive principles and reviewed annually. The applicable date for the annual performance review is January 1. 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. 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 2,580,000, including compensation for committee work. Of this amount, the Chairman receives SEK 650,000 and each other external member receives SEK 320,000. 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 750,000 - - - 750,000 Ulrik Svensson 620,000 - - - 620,000 Lillie Li Valeur 445,000 - - - 445,000 Marianne Kirkegaard 320,000 - - - 320,000 Märta Schörling Andreen 445,000 - - - 445,000 Subtotal for Board - - - Senior Managers Arne Frank, Chief Executive Officer 9,592,560 7,693,386 3) 209,820 2,653,698 20,149,464 Other senior managers 37,678,136 24,905,249 3) 4,056,978 4,125,014 70,765,377 Subtotal, senior managers 47,270,696 4) Total 5) 1) Refers to items carried as an expense in 2016. 2) Other benefits refer primarily to company cars. 3) Charged in the income statement in 2016 and estimated to be paid in 2017. During the year, variable remuneration expensed in 2015 of SEK 21,503,868 was paid. 4) Refers to the following for 2016: Anne Mette Olesen, Carla Leilani Packness, (to September 2016), David Smith, Fredrik Nilsson, Gerardo Garza López de Hereida, Jan Lenferink, Jens Wikstedt, Karsten Nielsen, Octavio Díaz de Léon, Renald Mackintosh, René Schou (as from June 2016), Terry Thomas and Torben Friis Lange. 5) Of the amount of SEK 93,494,841 SEK 44,884,170 relates to the Parent company, AAK AB. Arne Frank, President and Chief Executive Officer, is currently paid an annual fixed salary of SEK 9,592,560 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 2016, SEK 7,693,386 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 2016
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