Electrolux 2000 Annual Report Download - page 55

ELECTROLUX ANNUAL REPORT 2000 53
Note 25. EMPLOYEES AND PAYROLL COSTS (continued) 2000 1999
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 14 1,129 19 1,136
Other 22 882 31 963
Total Sweden 36 2,011 50 2,099
EU excluding Sweden 134 8,355 151 8,622
Rest of Europe 40 870 41 899
North America 63 4,802 74 4,971
Latin America 24 478 22 461
Asia 26 304 29 276
Africa 229 142
Oceania 364 470
Total outside Sweden 292 14,902 322 15,341
Group total 328 16,913 372 17,440
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 2,800,000, 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 who are not employed by the Group.
One member of the Board, Ms. Bruzelius,
was paid SEK 75,000 (in addition to SEK
275,000) due to her comprehensive
engagement in the project for changing
the financial organization, which was
implemented during the year.
The President and CEO received a
fixed annual salary of SEK 6,600,000.
The bonus for 2000 amounts to SEK
2,621,000.The method for computing
the President’s bonus was changed in
2000, in accordance with the principles
used within the Group to reward value
creation.The bonus is generated at a
higher level of value created than the
previous year, and increases at a linear rate
above that level.The President has also
received 26,000 options under the 2000
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 previ-
ous 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 pen-
sionable age is 65. For members of Group
management employed outside Sweden,
different pension terms apply according to
the country of employment, with the
right to receive pensions at 60 years of
age at the earliest.There are no agree-
ments for special severance pay.
The total capital value of pension
commitments referring to the current
President, his predecessors and their sur-
vivors amount to SEK 105m (108).
Fees in 2000 to KPMG, which per-
forms virtually all external auditing with-
in the Group, amounted to SEK 28m
referring to audits, and SEK 35m refer-
ring to various types of consultancy for
the Group.Audit fees to other audit firms
amounted to SEK 1m.
Annual option program
The annual option program introduced in
1998 entitles about 100 senior managers
to allotment of stock options.Three cat-
egories of personnel are covered by the
program, and each category is allotted a
specific number of options, based on the
value created according to the Group’s
model for value creation. No options are
issued if there is no increase in value. See
definition, page 61.
The maturity period of the options is
5 years.The options may not be exercised
until at least 12 months after the date of
allotment.The options can be used to
purchase Electrolux B-shares at a strike
price which is 15% higher than the
average closing price of the Electrolux
B-share on the OM Stockholm Exchange
during a limited period prior to allotment.
Within the framework of the 1998
program, a total of 1,128,900 options
were allotted in March 1999, with a strike
price of SEK 170.A provision of SEK
48m (52), including employer contribu-
tions, has been made for the 1998 pro-
gram.The program is secured by an equity
swap agreement.
Within the framework of the 1999
program, a total of 1,770,200 options
were allotted in February 2000, with a
strike price of SEK 216.A provision of
SEK 101m (85), including employer con-
tributions, has been made for the 1999
program.The program is secured by an
equity swap agreement.
Options for the 2000 program will be
allotted during the first half of 2001 on
the basis of the additional value created in
2000, relative to 1999.A provision of SEK
81m, including employer contributions,
has been made for the 2000 program.
Synthetic options 2000
The Board has decided to grant Wolfgang
König, the new Head of white goods
outside North America, 118,400 synthetic
employee stock options with the right to
receive a cash amount for each option
when exercised, calculated as the differ-
ence between the current share price and
the strike price of SEK 147.The options
may be exercised until July 1, 2006.The
options have been allotted without
consideration and as compensation for
options he lost the right to when joining
the Electrolux Group.This program will
be hedged by an equity swap.