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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.
Incentive program
At the Annual General Meeting in AAK AB (publ.) on May 17, 2017 it was resolved to implement a long-term incentive program
for senior executives and key employees in AAK and issue of subscription warrants for implementation of a subscription warrants
program. The total number of subscription warrants in the program amounted to 1,220,000 with an initial value of SEK 42.40
per subscription warrant, in total SEK 51,728,000. In 2017, employees in AAK subscribed for 880,320 subscription warrants at
an average price per subscription warrant of SEK 42.54 for a value of SEK 37,444,825. The number of outstanding subscription
warrants on December 31, 2017 amounts to 339,680 at a book value of SEK 14,283,175.
Pension
Pensions for senior management are in line with the Swedish KTP plan (corresponding to ITP) and retirement age for senior
managers is 65 years.
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 3,200,000, including compensation for committee work. Of this amount, the Chairman receives SEK 800,000 and each
other external member receives SEK 350,000. Compensation for committee work is distributed, in accordance with a decision
of the Annual General Meeting, 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.