The total remuneration for the president is determined by the board. Remuneration issues concerning other members of the management group are decided by the Remuneration Committee, with the board being informed of the decision afterwards. Investor applies, throughout the organization, the principle that the immediate superior of every manager must always be informed of, and approve, the recruitment and remuneration of any replacement for an employee. The components of total remuneration are:

• basic salary
• variable salary
• long-term share-based remuneration
• pension, and
• other remuneration and benefits.

Basic salary, variable salary and long-term share-based remuneration together represent the employee’s total salary.

Basic salary

The basic salary component is reviewed annually for all Investor employees, except in the case of the management group, where salaries are normally reviewed every other year. The basic salary is the basis on which the variable salary is calculated.

Variable salary

The majority of employees benefit from a variable salary component. This is based on goals that are set each year and followed up at the end of the year. The annual variable salary is thus clearly connected to the work input and performance of the individual. The goals, which may be both quantitative and qualitative, link into the company’s long-term strategy. The president’s overall goals for the year are established by the president and the chairman jointly. The actual goals are proposed by the Remuneration Committee subject to the board’s approval. The goals for other members of personnel are set by the individual’s immediate superior. The variable salary component for 2007 varied from one business area to another. In the case of the president, it represented no more than 40 percent of the basic salary, which is also the case for 2008. The variable salary component for other employees makes up between 0 and 80 percent of the basic salary, although for an extremely limited number of key individuals, the variable component may amount to 100 percent of the basic salary. If the president considers that an employee of the company has made an exceptional contribution during the year, the president may decide to award the employee an extra variable salary component. However, any such award is conditional on specific approval by the Remuneration Committee. In such cases, the variable salary component may exceed 100 percent of the basic salary.

Members of personnel employed in Active Portfolio Management participate in a profit-sharing program in which they are paid a variable salary component corresponding to 20 percent of the profits of the business, which may result in the variable salary component exceeding 100 percent of the basic salary.

Long-term share-based remuneration

Over the years 1999-2008, Investor operated a program of long-term share-based remuneration in the form of an employee stock option program, which from the year 2000 was offered to all employees. This program has been approved by the Investor board. As of 2004, the programs have also been approved by the AGM. The board’s ambition is to establish a structure that secures the commitment of personnel, in which their remuneration is based on Investor’s long-term growth. Through the program, part of the total remuneration to individual employees is linked to the long-term development of the company and the Investor share, and employees are also exposed to both rises and falls in the company’s share price. See document “Employees and payroll costs 2007” for a detailed report of each and every outstanding incentive program until 2007.

Prior to the 2006 AGM, the board developed a new program, in consultation with representatives of a number of the company’s owners, for long-term share-based remuneration. The program was developed with the assistance of Kepler Associates, international specialists in incentive programs. The 2008 program, approved at the Annual General Meeting of Investor AB on April 3, 2008, has basically the same structure as the 2006 program and the 2007 program. The long-term share-based remuneration program consists of two components:

• a share-based savings plan, and
• a performance-based share program.

See document “Guidelines for Remuneration and Long-term variable Remuneration 2008” for a report on the program for long-term variable remuneration for 2008 approved by the Annual General Meeting on April 3, 2008.
 

Information updated 2008-06-19 09:47:55