Find below the details of AAK's remuneration to the Board of Directors and senior executives, as specified in the latest Annual Report.
Note that a new Proposal of the Board of Directors on guidelines for remuneration to senior executives was adopted at the Annual General Meeting in May 2020.
At the Annual General Meeting in AAK AB on May 17, 2017 it was resolved to implement a long-term incentive program for senior executives and key employees in AAK and issue of subscription warrants for implementation of a subscription warrants program. The total number of subscription warrants in the program amounted to 1,220,000 with an initial value of SEK 42.40 per subscription warrant, in total SEK 51,728,000. In 2017, employees in AAK subscribed for 880,320 subscription warrants at an average price per subscription warrant of SEK 42.54 for a value of SEK 37,444,825. After the share split in 2018 the number of shares each subscription warrant entitles to is six. In 2019, employees in AAK subscribed for 20,480 subscription warrants at an average price per subscription warrant of SEK 244,14 for a value of SEK 4,999,987. The number of outstanding subscription warrants on December 31, 2019 amounts to 319,200 (339,680) at a book value of SEK 9,283,187 (14,283,175).
Compensation of Board Members
Fees are paid to the elected members of the Board in accordance with a resolution of the Shareholders' Annual General Meeting. This is distributed between the members as decided by the Board of Directors.
No other compensation or benefits have been paid to members of the Board, except travel expenses. The CEO, the secretary to the Board and employee representatives to the Board do not receive any compensation other than for costs in connection with their participation in Board activities.
Under a resolution of the Annual General Meeting, total compensation of elected external members of the Board is set at SEK 3,870,000, for the period up to the next annual general meeting, including compensation for committee work. Of this amount, the Chairman receives SEK 880,000 and each other external member receives SEK 390,000. Compensation for committee work is distributed, in accordance with a decision of the Annual General Meeting, as SEK 250,000 to the Chairman of the Audit Committee, SEK 125,000 to other members of the Audit Committee, SEK 100,000 to the Chairman of the Remuneration Committee, and SEK 50,000 to other members of the Remuneration Committee.
2019 remuneration of the Board of Directors and senior executives
Remuneration and other benefits for the year 2019, as stated in the 2019 Annual Report on page 88.
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2020 guidelines for remuneration to senior executives
The following is a summary of the principles for remuneration to senior executives in AAK adopted by the Annual General Meeting 2020. The full proposal of the Board of Directors on Guidelines for Remuneration to Senior Executives can be found here.
The guidelines include the CEO and the persons who during the period the guidelines apply are included in the group management. The guidelines shall apply to employment agreements entered into after the resolution by the Annual General Meeting, and to any amendments of existing agreements. The Board of Directors shall have the right to deviate from the guidelines if, in an individual case, there are particular reasons for this.
The remuneration shall be on market terms and may consist of fixed cash salary, variable cash remuneration, pension benefits and other benefits. Additionally, the general meeting may – irrespective of the guidelines – resolve on, among other things, share-related or share price-related remuneration. The variable cash remuneration may amount to not more than 110 percent of the fixed annual cash salary and shall be linked to predetermined and measurable criteria which can be financial or non-financial. They can also be individualised, quantitative or qualitative objectives. The criteria mainly applied are linked to the development of operating profit, return on capital employed and earnings per share. The satisfaction of criteria for awarding variable cash remuneration shall be measured over a period of one or several years.
Pension entitlements for senior executives shall apply from the age of 60 years at the earliest. For the CEO, pension benefits, including health insurance (Sw: sjukförsäkring), shall be premium defined. For other senior executives, pension benefits, including health insurance, shall be premium defined unless the individual concerned is subject to defined benefit pension under mandatory collective agreement provisions. Variable cash remuneration shall qualify for pension benefits to the extent required by applicable mandatory collective agreement provisions.
The pension premiums for premium defined pension shall amount to not more than 30 percent of the fixed annual cash salary.
Other benefits may include, for example, life insurance, medical insurance (Sw: sjukvårdsförsäkring) and company cars. Such benefits may amount to not more than 10 percent of the fixed annual cash salary.
The notice period may not exceed 12 months if notice of termination of employment is made by the company. Fixed cash salary during the period of notice and severance pay may together not exceed an amount equivalent to the fixed cash salary for two years. The period of notice may not exceed six months when termination is made by the executive, without any right to severance pay.