Electrolux 1999 Annual Report Download - page 47

Electrolux Annual Report 1999 45
Note 25. EMPLOYEES AND PAYROLL COSTS (continued) 1999 1998
Salaries and remuneration for Board members, Presidents Boards and Other Boards and Other
and other employees, by geographical area (SEKm) Presidents employees Presidents employees
Sweden
Parent company 19 1,136 14 1,126
Other 31 963 46 1,005
Total Sweden 50 2,099 60 2,131
EU excluding Sweden 151 8,622 154 8,973
Rest of Europe 41 899 38 888
North America 74 4,971 73 4,871
Latin America 22 461 22 645
Asia 29 276 20 479
Africa 142 154
Oceania 470 394
Total outside Sweden 322 15,341 311 16,004
Group total 372 17,440 371 18,135
Remuneration, etc. to the Chairman
of the Board, the President, other
members of senior Group management
and auditors
In accordance with the decision by the
Annual General Meeting, fees to the
Board of Directors were paid in the
amount of SEK 3,000,000, comprising
SEK 1,000,000 to the Chairman, SEK
350,000 to the Deputy Chairman and
SEK 275,000 to each of the other mem-
bers and deputy members who are not
employed by the Group.
The President and CEO received a
fixed annual salary of SEK 6,600,000.
The bonus for 1999 amounts to SEK
4,009,850 and has been paid in the form
of a pension benefit.The bonus is calcu-
lated as 0.00065 of the Group’s income
before taxes, maximized to 70% of the
fixed salary.The President has also
received 66,800 options under the 1999
options program.The retirement age of
the President is 60.The President is cov-
ered by the ITP plan, and in addition is
entitled to a lifetime pension consisting
of 32.5% of the portion of salary as of the
date of retirement that corresponds to
20-30 times the basic amount according
to the Swedish National Insurance Act,
50% of the portion corresponding to
30-100 times the basic amount, and
32.5% of the portion exceeding 100
times the basic amount. Between the age
of 60 and 65, an additional pension will
be paid amounting to 5% of salary as of
the date of retirement, maximized to 30
times the basic amount. Pension rights
from previous employment are included
in the above.There is no agreement for
special severance pay.
Similar pension agreements apply for
other members of Group management
employed in Sweden, although the
pensionable age is 65 (in one case 58).
For members of Group management
employed outside Sweden, different pen-
sion terms apply according to the coun-
try of employment, with the right to
receive pensions at 60 years of age at the
earliest.There are no agreements for spe-
cial severance pay.
The total capital value of pension
commitments referring to the current
President, his predecessors and their sur-
vivors amount to SEK 108m (103).
Fees in 1999 to KPMG, which as of
1999 performs virtually all external audi-
ting within the Group, amounted to SEK
27m referring to audits, and SEK 12m
referring to various types of consultancy
for the Group. Audit fees to other audit
firms amounted to SEK 2m.
Annual option program
The annual option program introduced
in 1998 entitles 93 persons to allotment
of options.Three categories of personnel
are covered by the program, and each
category is allotted a specific number of
options, based on the value created after
deducting a cost of capital on the Group’s
net assets from operating income. No
options are issued if there is no increase
in value. See definitions, page 52.
The value of the options is linked
to the trading price of the Electrolux
B-shares, and they can be used to pur-
chase Electrolux shares.The strike price is
115% of the trading price on the date the
options are issued.The maturity period of
the options is 5 years. The options may
not be redeemed until at least 12 months
after the date of issue.
Within the framework of the 1998 pro-
gram, a total of 1,128,900 options were
allotted in March 1999, with a strike
price of SEK 170. A provision of SEK
52m (38) plus employer contributions has
been made for the 1998 program.The
program is insured up to approximately
70% through a total return swap agree-
ment.
Options for the 1999 program will
be allotted during the first half of 2000
on the basis of the additional value creat-
ed in 1999, relative to 1998. A provision
of SEK 85m plus employer contributions
has been made for the 1999 program.
Synthetic options 1993
Of the approximately 150 senior manag-
ers who were offered synthetic options in
1993, 112 exercised the right to subscribe
these options in January, 1994. The
options were priced according to prevail-
ing market conditions at SEK 35. A total
of 2,530,000 options were issued, after
adjustment for a stock split of 5:1 in
1998.
At year-end 1999 there were 18 (22)
owners remaining with total holdings of
411,270 (534,020) options.The strike
price is SEK 81, and the options mature
on January 10, 2002.
The value of the options is indexed
to the Electrolux share price.The options
cannot be used for purchase of the
company’s shares, but will be redeemed in
cash by the company.The change in the
value of these synthetic options is included
in the annual Electrolux income statement.
At year-end the total provision was
SEK 53m (32), and net income for the
year has been charged with SEK 33m (13).