Saab 2011 Annual Report Download - page 71

SAAB ANNUAL REPORT 2011 67
ADMINISTRATION REPORT > OTHER INFORMATION
Other terms
All executives in the Group Management, including the President,
may terminate their employment with six months’ notice. If the
employment is terminated by Saab, the notice period is six months,
and aer the notice period, severance equal to one year’s salary is
paid. An additional year’s salary is payable if no new employment
has been obtained in the rst 18 months from the time the notice of
termination was served.
With respect to employment agreements made aer 1 Janu-
ary 2005, and in cases where Saab terminates the employment, a
maximum severance pay of 18 months is payable in addition to the
six-month notice period. In both cases, any income from termina-
tion pay and severance pay will be deducted against income from
other employment during the corresponding time.
Remuneration to Board Members
Board Members, elected by the Shareholders’ Meeting, may in spe-
cial cases receive a fee for services performed within their respec-
tive areas of expertise, separately from their Board duties and for a
limited period time. Compensation for these services shall be paid
at market terms.
Incentive programs proposed to the Annual General Meeting 2011
e Board of Directors proposed that the Annual General Meeting
should resolve on the implementation of a Share Matching Plan
2011 and a Performance Share Plan 2011. e Annual General
Meeting resolved in accordance with the Board’s proposal.
THE BOARD OF DIRECTORS’ PROPOSAL FOR GUIDELINES
FOR REMUNERATION OF SENIOR EXECUTIVES TO APPLY AS
OF THE NEXT ANNUAL GENERAL MEETING
Background and reasons
e Remuneration Committee has evaluated the application of the
guidelines for remuneration for senior executives of Saab that were
resolved at the Annual General Meeting in 2011 and the current
remuneration structures and remuneration levels in the Company.
e Remuneration Committee is of the opinion that the guidelines
that were resolved in 2011 achieve their purposes to facilitate the
recruitment and retention of senior executives.
e Remuneration Committee has recommended the Board of
Directors to propose to the Annual General Meeting to adopt prin-
ciples of remuneration whose terms and conditions in essence are
the same as those that were resolved at the Annual General Meeting
in 2011. However, in consideration of a general review of senior ex-
ecutive employment agreements, certain clarications are proposed
to be made in the guidelines pertaining to customary executive
benets and to the “Saab Plan” that regulates pension terms.
Proposal for guidelines
In light of the above background and reasons, the Board of Direc-
tors therefore proposes that the guidelines for remuneration of
senior executives are changed.
In respect of xed and variable remuneration, miscellaneous terms
and consultant fees to members of the Board of Directors the
guidelines are unchanged from 2011 except for minor linguistic
adjustments.
e new guidelines are proposed to have the following word-
ing regarding incentive programs proposed to the Annual General
Meeting 2012, other benets and pension.
e guidelines are proposed to apply from the Annual General
Meeting 2012.
Incentive programs proposed to the Annual General Meeting 2012
e Board of Directors proposes that the Annual General Meeting
resolves on the implementation of a Share Matching Plan 2012 and
a Performance Share Plan 2012.
e terms and estimated costs for the Share Matching Plan 2012
and the Performance Share Plan 2012 are presented in the Board’s
complete proposal to the Annual General Meeting.
Other benets
All members of the Group Management may be entitled to other
benets in accordance with local practice. e benets shall
contribute to facilitating the executive’s discharge of his or her du-
ties. ese benets shall not constitute a material part of the total
compensation and shall be equivalent to what is considered reason-
able in relation to market practice. Other benets may for example
be a company car, travels, overnight accommodation and medical
insurance.
Pension
For pension agreements entered into aer 1 January 2005, the pen-
sion age is 62. In addition to the ITP agreement, the pension is part
of a dened premium based contribution plan where provisions are
made annually. For the President and CEO, the provision is equivalent
to maximum 35 per cent of the xed salary. For other senior execu-
tives the percentage is based on a set of regulations in the so-called
Saab plan. According to this plan, the percentage is dependent on the
number of years remaining until the age of retirement upon joining the
plan. e aggregate insurance balance should cover a targeted pension
from 65 years of age of approximately 32.5 percent of salary levels be-
tween 20 and 30 basic income amounts and approximately 50 percent
of segments above 30 basic income amounts.
All senior executives may also be entitled to strengthened dis-
ability pension and survivors’ pension.