Saab 2014 Annual Report Download - page 67

ADMINISTRATION REPORT
OTHER INFORMATION
GUIDELINES FOR REMUNERATION AND
OTHER TERMS OF EMPLOYMENT FOR
SENIOR EXECUTIVES 2014
Pursuant to the Swedish Companies Act, the Board
of Directors shall propose remuneration guidelines
for the company’s senior executives to the Annual
General Meeting. e Annual General Meeting
2014 adopted the Board’s proposed guidelines for
senior executives as described below.
e senior executives comprise the President
and CEO and other members of the Group Mana-
gement. e members of this group are presented
on the company’s website. In special cases these
guidelines apply to Saab AB Board members, as
described below.
Saab shall oer market terms in order to recruit
and retain senior executives. To the greatest extent
possible, remuneration structures shall be charac-
terised by predictability with respect to both the
cost for the company and the benet for the
employee. ey shall be based on factors such as
position, competence, experience and perfor-
mance. Benchmarking against comparable
industries and markets shall be practiced.
e guidelines are based primarily on agree-
ments in eect between Saab AB and individual
executives. No board fees are paid to members of
the Group Management for participation on the
boards of the business areas or Saab subsidiaries.
e Remuneration Committee is responsible for
developing and reviewing remuneration and other
employment terms for the Group Management.
e Board is entitled to divert from the guide-
lines if there are reasonable grounds to do so in
specic cases.
ese guidelines apply as of the Annual
General Meeting 2014.
Fixed remuneration
Cash remuneration shall consist of a xed salary.
e xed salary shall be reviewed annually as per
1 January for all members of the Group Manage-
ment. Fixed salary shall be set at market terms and
based on factors such as position, competence,
experience and performance.
Variable remuneration
Saab’s operations are characterised primarily by the
development of complex products and systems. e
products are marketed, further developed, produced
and maintained over long periods – in some cases,
three or four decades – and normally involve signi-
cant investments and long-term relationships with
customers around the world. It is therefore
important that senior executives share a long-term
view and commitment to the company’s operations
and prots. Long-term incentives are thus parti-
cularly well suited to Saab and its shareholders, and
consist of a share-based incentive programme.
e President and CEO and senior executives are
entitled to participate in the long-term incentive
programmes adopted by the Shareholders’ Meeting.
One-o agreements on variable cash remuneration
may be made in extraordinary circumstances, pro-
vided that such agreements are made solely on an
individual basis for recruitment or retention pur-
poses or as compensation for extraordinary eorts
above and beyond the individual’s ordinary duties.
Such remuneration shall never exceed the xed
annual salary and shall not be paid more than once
a year per individual. Resolutions on such cash
remuneration shall be made by the Board based on
a proposal from the Remuneration Committee.
Variable cash remuneration shall not be paid
under any other circumstances.
Other benefits
All members of the Group Management may be
entitled to other benets in accordance with local
practice. e benets shall contribute to facilitating
the executive's discharge of his or her duties. ese
benets shall not constitute a material part of total
compensation and shall be equivalent to what is
considered reasonable in relation to market practice.
Other benets can include a company car, travels,
overnight accommodation and medical insurance.
Pension
e retirement age is 62 under pension agreements
entered into aer 1 January 2005. In addition to the
ITP agreement, the pension is part of a dened
premium plan and provisions are made annually.
For the President and CEO the provision is limited
to 35 per cent of xed salary. For other senior exe-
cutives the percentage is based on ”Saab Plan”
regulation. According to this plan, the percentage
is dependent on the number of years remaining
until retirement age upon joining the plan. e
aggregate insurance balance should cover a targe-
ted pension from age 65 of approximately 32.5 per
cent of salary levels between 20 and 30 basic
income amounts and approximately 50 per cent
of segments above 30 basic income amounts.
All senior executives may also be entitled to
enhanced disability pension and survivors’ pension.
Miscellaneous terms
All Group Management executives, including the
President and CEO, may terminate their employ-
ment with six months’ notice. If employment is
terminated by Saab the notice period is also six
months, aer which severance equal to one year’s
salary is paid. An additional year’s salary may be
paid in the event no new employment has been
obtained during the rst 18 months from the time
notice of termination was served.
With respect to employment agreements signed
aer 1 January 2005 that are terminated by Saab, a
severance is payable for a maximum of 18 months
following a six-month notice period.
In both cases, any income from other employ-
ment is deducted from severance.
SAAB ANNUAL REPORT 2014 – 63