Volvo 2015 Annual Report Download - page 190

Proposal by the Board of Directors to the Annual General
Meeting 2016
This policy concerns the remuneration and other terms of employment for
the members of the Volvo Group Executive Board (“Executives”).
The remuneration and the other terms of employment of the Executives
shall be competitive so that the Volvo Group can attract and retain com-
petent Executives. The total remuneration to Executives consists of fixed
salary, short-term and long-term incentives, pension and other benefits.
Short-term and long-term incentives shall be linked to predetermined and
measurable criteria relating to EBIT and cash flow targets for the Volvo
Group, devised to promote the long-term value creation of the Volvo
Group and strengthen the link between achieved performance targets
and reward. The criteria for short-term and long-term incentives shall be
determined by the Board annually.
Short-term incentive may, as regards the President & CEO, amount to a
maximum of 100% of the fixed salary and, as regards other Executives, a
maximum of 80% of the fixed salary.
Long-term incentive may, as regards the President & CEO, amount to a
maximum of 100% of the fixed salary and, as regards other Executives, a
maximum of 80% of the fixed salary. The Board of Directors has decided
on a new cash-based long-term incentive program for the Group’s top
300 executives, including the Executives, subject to the general meet-
ing’s approval of this policy. Awards under the program, based on how well
the performance targets are achieved, are disbursed in cash to the partic-
ipants on the condition that they invest the net award in AB Volvo shares
and that they retain the shares for at least three years. The long-term
share-based incentive program resolved by the 2014 Annual General
Meeting is therefore discontinued after 2015. New share-based incentive
programs, will, where applicable, be resolved by the General Meeting, but
no such program is currently proposed.
For Executives resident in Sweden, the notice period upon termination
by the company shall not exceed 12 months and the notice period upon
termination by the Executive shall not exceed 6 months. In addition, in the
event of termination by the company, the Executive may be entitled to a
maximum of 12 months’ severance pay.
Executives resident outside Sweden or resident in Sweden but having
a material connection to or having been resident in a country other than
Sweden may be offered notice periods for termination and severance pay-
ment that are competitive in the country where the Executives are or have
been resident or to which the Executives have a material connection, pref-
erably solutions comparable to the solutions applied to Executives resi-
dent in Sweden.
Authority to decide on deviations from this policy
The Board of Directors may deviate from this policy if there are special
reasons to do so in an individual case.
Additional information
Executive compensation, which has been decided but which has not yet
become due for payment by the time of the 2016 Annual General Meet-
ing, falls within the scope of this policy. Additional information regarding
remuneration is available in the Volvo Group Annual Report for 2015.
Proposed policy for remuneration to senior executives
OTHER INFORMATION
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