The Board’s appraisal of remuneration to ÅF employees in senior positions
The Board presents herewith its appraisal of the systems of remuneration for ÅF employees who hold senior positions within the company.
Remuneration to employees holding senior positions within ÅF includes both fixed and variable salary components. The variable components comprise a short-term constituent based on results for the respective year and a long-term constituent that reflects ÅF’s long-term objectives. The board is of the opinion that the models for remuneration that are implemented in the company contribute to and promote the attainment of ÅF’s ultimate objectives.
The long-term remuneration system takes the form of 3-year performance share plans (PSPs). In the board’s opinion these long-term incentive programmes not only stimulate longstanding loyalty among co-workers and encourage high standards of performance, but also increase ÅF’s appeal as an employer. The first PSP was offered to just over 150 key individuals in the company: approximately 55% subscribed to the programme. The percentage of those who have joined subsequent PSPs has risen: this is due in part to the fact that a lower number of people have been selected to receive the offer and in part to certain modifications that have been made to the conditions.
The 2010 PSP has been offered to 119 key individuals in the company. A new component in the programme is the offer of a free matching share to key individuals who remain with the programme for at least 3 years. This has raised the acceptance rate to just over 80%. The board considers it to be important and in the interest of all shareholders that key individuals in the ÅF Group share a long-term interest in ensuring that the ÅF share increases in value.
None of these performance share programmes has yet run for its full term, but the outcomes forecast for the respective programmes would appear to provide an accurate reflection of how the value of the company has increased.
Forms of remuneration to ÅF employees in senior positions are to conform to the policy proposed by the Board of Directors and approved by the Annual General Meeting. The policy is to be the subject of discussion by the board on at least one occasion every year.
Among the members of the board it is those serving on the Remuneration Committee who are responsible for implementing and following up the policy. A follow-up is made each year by the Remuneration Committee and the result is reported to the board.
The board can confirm that remuneration to senior employees within ÅF for 2010 conforms to the principles established for the year. The Remuneration Committee has also compared the levels of both fixed and variable salary components and can confirm that these are in line with current market practice and conditions.
Stockholm, March 2011
ÅF AB (publ)
Board of Directors