Saab 2015 Annual Report Download - page 61

ADMINISTRATION REPORT
OTHER INFORMATION
GUIDELINES FOR REMUNERATION AND OTHER
TERMS OF EMPLOYMENT FOR SENIOR
EXECUTIVES 2015
Pursuant to the Swedish Companies Act, the Board
of Directors shall propose remuneration guidelines
for the company’s senior executives to the Annual
General Meeting. e Annual General Meeting 2015
adopted the Board’s proposed guidelines for senior
executives as described below.
e senior executives comprise the President and
other members of the Group Management. e
members of this group are presented on the compa-
ny’s website. In special cases these guidelines apply
to Saab AB Board members, as described below.
Saab shall oer market terms in order to recruit
and retain senior executives. To the greatest extent
possible, remuneration structures shall be character-
ised by predictability with respect to both the cost
for the company and the benet for the employee.
ey shall be based on factors such as position, com-
petence, experience and performance. Benchmark-
ing against comparable industries and markets shall
be practiced.
e guidelines are based primarily on agree-
ments in eect between Saab AB and individual
executives. No board fees are paid to members of the
Group Management for participation on the boards
of the business areas or Saab’s subsidiaries.
e Remuneration Committee is responsible for
developing and reviewing remuneration and other
employment terms for the Group Management.
e Board is entitled to divert from the guide-
lines if there are reasonable grounds to do so in
specic cases.
ese guidelines apply as of the Annual General
Meeting 2015.
Fixed remuneration
Cash remuneration shall consist of a xed salary.
e xed salary shall be reviewed annually as per
1 January for all members of the Group Management.
Fixed salary shall be set at market terms and based
on factors such as position, competence, experience
and performance.
Variable remuneration
Saab’s operations are dominated by the development
of complex products and systems. e products are
marketed, further developed, produced and main-
tained over long periods – in some cases, three or
four decades – and normally involve signicant
investments and long-term relationships with cus-
tomers around the world. It is important therefore
that senior executives share a long-term view and
commitment to the company’s operations and prof-
its. As a result, long-term incentives are particularly
well-suited to Saab and its shareholders, and consist
of a share-based incentive programme.
e President and senior executives are entitled
to participate in the long-term share based incentive
programmes adopted by the Shareholders’ Meeting.
One-o agreements on variable cash remunera-
tion may be made in extraordinary circumstances,
provided that such agreements are made solely on
an individual basis for recruitment or retention
purposes or as compensation for extraordinary
eorts above and beyond the individual’s ordinary
duties. Such remuneration shall never exceed the
xed annual salary and shall not be paid more than
once a year per individual. Resolutions on such cash
remuneration shall be made by the Board based on a
proposal from the Remuneration Committee.
Variable cash remuneration shall not be paid
under any other circumstances.
Other benefits
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 duties. ese
benets shall not constitute a material part of total
compensation and shall be equivalent to what is
considered reasonable in relation to market practice.
Other benets may for example be a company car,
travels, overnight accommodation and medical
insurance.
Pension
e retirement age is 62 under pension agreements
entered into aer 1 January 2005. In addition to the
ITP agreement, the pension is part of a dened
premium plan and provisions are made annually.
For the President the provision is limited to 35 per
cent of xed salary. For other senior executives the
percentage is based on “Saab Plan” regulation.
According to this plan, the percentage is dependent
on the number of years remaining until retirement
age upon joining the plan. e aggregate insurance
balance should cover a targeted pension from age 65
of approximately 32.5 per cent of salary levels
between 20 and 30 basic income amounts and
approximately 50 per cent of segments above
30 basic income amounts.
All senior executives may also be entitled to
enhanced disability pension and survivors’ pension.
Miscellaneous terms
All Group Management executives, including the
President, may terminate their employment with six
months’ notice. If employment is terminated by Saab
the notice period is six months, aer which sever-
ance equal to one year’s salary is paid. An additional
year’s salary may be paid in the event no new
employment has been obtained during the rst 18
months from the time notice of termination was
served.
With respect to employment agreements signed
aer 1 January 2005 that are terminated by Saab,
severance is payable for a maximum of 18 months
following a six-month notice period.
In both cases, any income from termination pay
and severance pay will be deducted against income
from other employment during the corresponding
time.
Consulting fees to Board members
In special cases Saab AB’s shareholder-elected Board
Members may receive a fee for services performed
SAAB ANNUAL REPORT 2015 – 57