Saab 2014 Annual Report Download - page 114

FINANCIAL INFORMATION – NOTES
Note 37, cont.
the balance sheet as equity and accrued expenses (social security expenses). Admi-
nistrative expenses for the share matching plans amounted to MSEK 7 (6) in 2014.
The expense is calculated as the fair value of the services rendered is based on
the share price of the matching shares that are expected to be allotted. The share
price is determined at the time of the participants’ investment adjusted by the divi-
dend that does not accrue to the employee during the vesting period.
SENIOR EXECUTIVES’ BENEFITS
Remuneration to Board members
In accordance with the resolution of the Annual General Meeting, the fees paid to
members of the Board, for the term April 2014 – April 2015, amount to
SEK4,635,000 (4,435,000), consisting of SEK 1,230,000 (1,185,000) to the Chair-
man, SEK525,000 (490,000) to the Deputy Chairman and SEK 480,000 (460,000)
to each of the other members elected by the Annual General Meeting, with the
exception of the President.
For audit committee work during the term April 2014 – April 2015, committee
chairman Per-Arne Sandström also received a fee of SEK 180,000 (150,000) and
committee members Johan Forssell and Joakim Westh each received a fee of
SEK120,000 (100,000).
For remuneration committee work, during the term April 2014 – April 2015,
committee chairman Lena Treschow Torell also received a fee of SEK 135,000
(135,000) and committee members Marcus Wallenberg and Sten Jakobsson each
received a fee of SEK 80,000 (80,000).
Remuneration to Board members and committee members recognised as cost
for fiscal year 2014 is shown in the table below.
In her capacity as a consultant, Director Cecilia Stegö Chilò has also received
compensation from Saab AB of SEK 170,000 (212,500 including VAT) to assist
the company on Public Affairs and communication issues in connection with the
Gripen campaign in Switzerland during the period February – May 2014. The
consulting assignment has been completed.
Remuneration to the President
The salary paid to the President and CEO consists of a fixed salary. The previous
short-term variable portion was discontinued as of 2011 in accordance with the
resolution of the Annual General Meeting. The preparation process for compensa-
tion issues regarding the President is handled by the Board’s Remuneration Com-
mittee according to the principles laid down by the Annual General Meeting and
then voted on by the Board.
Håkan Buskhe has participated since 1 September 2010 in the Performance
Share Plans approved by the 2009, 2010, 2011, 2012, and 2013 Annual G eneral
Meetings and in the Share Matching Plans 2011, 2012, and 2013.
Outstanding matching rights in the Performance Share Plan 2010 amount to
SEK495,045 (2,114,977) as of 31 December 2014 at estimated outcomes and in
the Performance Share Plan and the Share Matching Plan 2011 to SEK331,897
(188,588) at estimated outcomes. Corresponding figures for the Performance
Share Plans and the Share Matching Plans 2012 and 2013 are SEK196,889
(334,391) and 362,585 respectively, at estimated outcomes.
During the period 1 January through 31 December 2014, Håkan Buskhe recei-
ved salary and other benefits totalling SEK12,003,325 (11,584,583), of which
other benefits, including share related plans, amounted to SEK1,407,998
(1,701,415).
Pension terms
The retirement age for the President is 62 years. The President has a defined-con-
tribution pension plan. He may decide himself on the payment term, though this
must fall within the provisions of Swedish income tax law. The pension cost for
Saab consists of pension premiums amounting to 35 per cent of the fixed salary.
Pension premiums are paid as long as the President remains an employee of the
company, but not beyond the age of 62. During his first five years of employment,
the President also receives an extra pension contribution of SEK 440,000 per year,
payment of which is made annually and is conditional on Håkan Buskhe remaining
an employee.
To this is added the cost of pension premiums according to the ITP plan.
The pension commitment is vested.
For 2014, the cost of Håkan Buskhe’s pension, including ITP, was
SEK4,222,203 (3,594,269).
Severance terms
If terminated by the company, the President will receive a salary and pension bene-
fits for a period of six months (period of notice). Thereafter he will receive severance
pay equivalent to one year of salary, based on his current fixed salary. If the Presi-
dent does not obtain new employment, he will receive an additional six months of
severance pay. The salary during the period of notice and severance will be deduc-
ted from income received from other employment during the same period. If the
President resigns voluntarily, there is a six-month period of notice with salary and
pension benefits, but no severance pay. The President’s agreement includes a
non-compete clause.
Remuneration to other senior executives
The group of other senior executives included 9 (9) individuals at 31 December
2014; specifically, Executive Vice Presidents, Heads of the Business Areas and
Heads of Group staffs. At 31 December 2014 Group Management was comprised
of Håkan Buskhe (President), Lennart Sindahl, Magnus Örnberg, Görgen Johans-
son, Micael Johansson, Gunilla Fransson, Lars-Erik Wige, Annika Bäremo, Dan
Jangblad, and Lena Eliasson.
The salaries paid to other senior executives consist of a fixed salary. The pre-
vious short-term variable portion was discontinued as of 2011 in accordance with
the resolution of the Annual General Meeting. Compensation issues regarding the
other senior executives are prepared by the Head of Group Human Resources and
presented to the President, who makes a decision pending the approval of the
Compensation Committee and the Board.
Of the other senior executives, two individuals received cash settlements of a
non-recurring nature upon recruitment according to a resolution 2012. An amount
totalling SEK 1,990,000 will be paid during a period of 36 months from the start of
employment. The payments are made monthly in the form of pension premiums
and are conditional upon the recipients not giving notice of termination of employ-
ment. SEK 663,336 has been paid during 2014.
Since November 2008, all eligible executives have participated in the
P erformance Share Plans approved by the Annual General Meetings in 2009,
2010, 2011, 2012, and 2013 and in the Share Matching Plans 2011, 2012, and
2013. The Performance Share Plan 2010 was concluded in January 2015. Out-
standing matching rights in the Performance Share Plan 2010 amount to
SEK368,313 (1,637,726) as of 31 December 2014 at estimated outcomes and in
the Performance Share Plan and the Share Matching Plan 2011 to SEK637,833
(357,831) as of 31 December 2014 at estimated outcomes. Corresponding figures
for the Performance Share Plans and the Share Matching Plans 2012 and 2013
amount to SEK476,532 (548,191) and SEK624,927, respectively, at estimated
outcomes.
In 2014, the other senior executives received salaries and other benefits totalling
SEK34,550,213 (41,886,223), of which other benefits, including share related
plans, amounted to SEK3,616,076 (3,975,317).
Pension terms
As of 1 January 2005, a pension age of 62 years applies to new executives. Among
other senior executives, one individual has a retirement age of 60 years.
In addition to ITP, 9 members of the group (9) are affiliated with the Saab plan,
which is defined-contribution and vested. The Saab plan provides pension benefits
in addition to ITP or its equivalent on salary levels between 20 and 30 basic
amounts as well as on salary segments over 30 basic amounts. The individuals
themselves can decide on the payment term, though this must fall within the provi-
sions of Swedish income tax law. Moreover, an insurance policy finances the period
between the ages of 60 or 62 years and 65 years.
The pension cost for Saab consists of pension premiums, which are based on a
percentage of qualifying salaries. The percentage rate is determined by each
executive’s time remaining until the pension age, 60 or 62 years, when joining the
plan. The aggregate insurance balance should cover a targeted pension from
65years of approximately 32.5 per cent of salary levels between 20 and 30 basic
amounts and approximately 50 per cent of segments over 30 basic amounts of
qualifying salaries. Premium payments continue as long as the individuals remain in
their positions or as employees of the company.
Pension obligations are vested. In 2014, pension costs for other senior executi-
ves, including ITP and its equivalent, amounted to SEK12,063,664 (13,533,737).
Other senior executives are entitled, or obliged if the company so requests, to retire
on pension as of the age of 60 or 62 years.
Severance terms
If terminated by the company, the group of other senior executives will receive a
salary and pension benefits for six months (period of notice). Thereafter they will
receive severance pay equivalent to 18 months of salary, based on their fixed
salary. Severance is paid monthly with the first payment in the month after employ-
ment has ended. Severance is not paid for the period that falls after the contractual
pension age. Employees hired before 1 January 2005 who have reached the age of
55 are entitled to another six months of severance.
The salary during the period of notice and severance will be deducted from
110 – SAAB ANNUAL REPORT 2014