Saab 2010 Annual Report Download - page 44

CORPORATE
Corporate reported operating income of MSEK -125 (387). In 2009,
operating income was positively impacted by a revaluation of the
remaining risks associated with the regional aircra portfolio of
MSEK 350.
Operating income includes restructuring costs of MSEK 65
related to eorts to lower the Group’s administrative and overhead
costs announced on 10 November 2010.
It also includes a capital loss of MSEK 22 from June 2010 when
Saab divested 25 per cent of the votes, corresponding to ve per cent
of the capital, in Saab South Africa (Pty) Ltd to the South African
holding company Sekunjalo Investment Ltd. Operating income also
includes a capital gain of MSEK 24 from the divestment of 16 per cent
of the capital in Hawker Pacic in December 2010.
THE BILLION+ PROGRAMME
At the start of , Saab initiated a programme aimed at improving
internal eciency called the “Billion+ programme”. is was expan-
ded in 2009 to include a programme where additional costs cuts of
MSEK 500 would be achieved through a reduction in the workforce
of about 500 employees, mainly through attrition. ese two meas-
ures were initiated to ensure that Saab will have the capability to make
the necessary investments going forward to sustain its competitive-
ness. e target was to reduce the cost base by about SEK 1.5 billion
over a three-year period, 2008–2010. To deliver on this target, Saab
aimed at reducing its cost base by about MSEK 650 in 2010, which
was achieved. In 2010, the cost reductions contributed about 3 per-
centage points to the reported operating margin.
About 70 per cent of the cost reduction over the three year 2008–
2010 has been generated by reducing the cost of goods sold.
A major part of the cost reductions have been achieved through
an aligned and improved development process, increased produc-
tion eciency and reduction of sites as well as lower sourcing and
travel costs.
GUIDELINES FOR REMUNERATION AND OTHER BENEFITS TO
MEMBERS OF SENIOR MANAGEMENT
Senior management remuneration
By Swedish law, the Board of Directors must prepare guidelines prior
to the Annual General Meeting for determining the salaries and other
remuneration to the President and CEO and other members of the
senior management of the company. e  Annual General Meet-
ing adopted the proposal presented by the Board containing guide-
lines for such remuneration to Group Management. is group com-
prises the President and CEO and other members of Group
Management and is identied on Saab’s website, www.saabgroup.com.
Saab oers market terms, enabling it to recruit and retain senior
executives. To the extent possible, remuneration structures are charac-
terised by predictability with respect to the cost for the company and
the benets of the employee and are based on factors such as position,
competence, experience and performance. Benchmarking is used rela-
tive to comparable industries and markets.
e Board has the right to deviate from the guidelines, if there are
reasonable rounds in an individual case.
e Board’s proposal is based mainly on agreements in eect between
Saab AB and each executive. No Board fees are paid for participation by
members of Group Management on the boards of the business units.
e Remuneration Committee is responsible for development
and review of remuneration and other employment terms for Group
Management.
Remuneration
Cash remuneration consists of xed and variable salary. Fixed sala-
ries are reviewed annually as per  January for the entire Group Man-
agement, while the variable component is governed by an agreement
reached annually with each executive.
e variable salary for the President is based on the extent to which
pre-determined quantitative and qualitative goals are reached. Quanti-
tative goals primarily apply to the rest of Group Management. e vari-
able component is maximised at  per cent of the xed salary of the
President and between  per cent and  per cent of the xed salary of
the rest of Group Management.
All senior executives are entitled to participate in the Performance
Share Plan approved by the  Annual General Meeting. Participants
in this program are not covered by the general Share Matching Plan
approved by the  Annual General Meeting.
All executives in Group Management have the right to a company
car according to Saab’s regulations.
Pension
For pension agreements entered into aer  January , the pension
age is . In addition to the ITP agreement, the pension is part of a
dened contribution plan where provisions are made annually. For
the President, the provision is equivalent to  per cent of his xed
salary. For other executives, the percentage is based on the regula-
tions of the so-called Saab plan. e percentage is dependent on the
number of years remaining until retirement upon joining the plan.
OTHER INFORMATION
SAAB ANNUAL REPORT 2010 41
ADMINISTRATION REPORT