Volvo 2007 Annual Report Download - page 123
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Please find page 123 of the 2007 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report. Financial information 2007 119
Note 33 Government grants
Note 34 Personnel
During 2007, government grants amounting to 469 (216) have been received and 365 (141) have been accounted for in the income statement.
The grants were mainly received from the European Commission and the Swedish government. R&D credits is included with 210. Volvo Buses
received a grant of 116 from the Swedish Energy Agency for the development of hybrid technology. 14 of the 116 has been accounted for during
2007.
In accordance with a resolution adopted at the Annual General Meet-
ing 2007, the fee paid to the Board of Directors was set at SEK
5,725,000, to be distributed among the members as follows: SEK
1,500,000 to the Chairman and SEK 500,000 to each of the mem-
bers; in addition, SEK 250,000 to the chairman of the Audit Commit-
tee and SEK 125,000 to other members of the Audit Committee and
SEK 75,000 to each of the members of the Remuneration Committee.
Apart from the board fee, the members of the Board of directors have
not obtained any other remuneration.
Other
Remuneration to senior executives, SEK Fixed salary Variable salary benefi ts
1 Pension
Board Chairman 1,575,000 – – –
President and CEO 11,839,816 4,799,721 5,042,438 4,619,073
Other members of GEC2 54,290,794 16,859,594 50,649,394 50,661,581
Total remuneration and benefi ts 67,705,610 21,659,315 55,691,832 55,280,654
Total costs 20073 85,810,172 28,026,753 74,947,694 65,564,442
Total costs 20063 80,243,527 32,494,979 85,581,958 70,140,9484
1 Other benefi ts for the President and CEO include SEK 4,480,000 related to
allotted shares during 2007, and for other members of the GEC SEK
25,013,520 related to allotted shares and SEK 8,737,277 pertaining to cash
payments, for the GEC members not residing in Sweden, linked to the share-
based incentive program. For GEC additional SEK 12,784,671 is included for
exercised employee stock options.
2 In addition to the CEO, the Group Executive Committee (GEC) comprised of
17 members at the end of the year.
3 Total costs for GEC include social fees on salaries and benefi ts, special pen-
sion tax and additional costs for other benefi ts. The cost for other benefi ts
includes cost earlier accounted for in previous years relating to the option and
sharebased payment programs amounting to approximately SEK 67 M.
4 In the beginning of 2005 a previously announced one-time payment of SEK
34 M was made when Leif Johansson shifted over to a defi ned contribution
based pension. SEK 13.3 M of the payment was reported in 2006.
Terms of employment of the CEO
The President and Chief Executive Offi cer, Leif Johansson, is entitled
to a fi xed annual salary. In addition, he may receive a variable salary
based on operating income and cash fl ow for the Volvo Group up to a
maximum of 50% of his fi xed annual salary. In 2007, the variable sal-
ary corresponded to 40.5% of the fi xed annual salary. Leif Johansson
also participates in the Volvo Group long-term incentive program. In
2007, Leif Johansson received 8,000 shares, corresponding to
40,000 shares after share split, since the fi nancial goals for 2006
were achieved.
Leif Johansson is covered by the Volvo executive pension plans,
Volvo Management Pension (VMP) and Volvo Executive Pension
(VEP). The retirement benefi t is a defi ned contribution plan with
refund protection. The disability pension is a defi ned benefi t plan.
Contributions to VMP and VEP are not tax deductable, the benefi t
from the insurance not taxable to the company, but pension paid will
be tax deductable. A defi ned time for retirement does not exist. The
pensionable salary consists of the current monthly salary times 12,
together with the average of the outcome of the variable salary, maxi-
mized to 50% of the salary, for the previous fi ve years. The premium
for the VMP is SEK 30,000 together with 20% of the pensionable
salary over 30 income base amounts and the premium for VEP is 10%
of pensionable salary. There is no other commitment other than the
payment of the premiums. The disability pension constitutes of 70%
of pensionable salary up to 30 income base amounts and 40% of the
pensionable salary between 30 and 50 income base amounts. The
right to disability pension is conditional to employment and will cease
upon termination of duty. See the table above for premiums paid
during the year.
Leif Johansson has a six-month notice of termination on his own
initiative and 12 months notice of termination from AB Volvo. Leif
Johansson is not entitled to severance payments.
Variable salaries
Members of the Group Executive Committee and a number of senior
executives receive variable salaries in addition to fi xed salaries. Vari-
able salaries are in most cases based on the fulfi lment of certain
improvement targets. The targets are decided by the Board of Direct-
ors in AB Volvo and may relate to operating income and cash fl ow.
During 2007, a variable salary could amount to a maximum of 50% of
the fi xed annual salary.