Note Remuneration of the Board of Directors and senior executives
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.
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.
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
At the Annual General Meeting in AAK AB 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. After the share
split in 2018 the number of shares each subscription warrant
entitles to is six. The number of outstanding subscription
warrants on December 31, 2018 amounts to 339,680 at a
book value of SEK 14,283,175.
Pensions for senior management are in line with the Swedish
KTP plan (corresponding to ITP) and retirement age for senior
managers is 65 years.
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 3,375,000, including compensation for committee
work. Of this amount, the Chairman receives SEK 850,000
and each other external member receives SEK 375,000.
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