Clarification regarding compensation to Investor’s CEO Börje Ekholm

Recent articles published in media often fail to differ between compensation terms related to Investor’s CEO Börje Ekholm and returns made on investments before he was appointed CEO. In two separate documents, at the top of the right hand column, we provide summaries of the terms of compensation 2005-2010 to Börje Ekholm as CEO and the returns made on investments within Investor Growth Capital 1997-2005.

To read Investor's comments, facts and clarifications regarding articles, discussions and media events, go to Investor comments (available in Swedish).

Remuneration

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:

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

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

Remuneration philosophy

• Competitive total remuneration
• Significant portion should be variable salary
• Link to long-term value for Investor’s shareholders through own investment and lock-in
• Transparency and simplicity
• “Grandfather principle"
  
  

Fixed cash salary

The fixed cash salary component is reviewed annually and is the basis on which the variable cash salary is calculated.

Variable cash salary

The majority of employees also receive variable cash salary, in addition to their fixed cash salary. Variable cash salary is based on individual goals that are set each year. In this way, the annual variable cash salary is clearly connected to the work and performance of the individual. The goals are both qualitative and quantitative and are based on factors that support the company’s long-term strategy. The President’s variable cash salary totals a maximum of 10 percent of his fixed cash salary for 2011. The variable cash salaries of the Management Group as a rule are 10-75 percent of their fixed cash salaries, depending on the position and agreement. For other employees, variable cash salary can range from 0-80 percent of the employee’s fixed cash salary. In the case of a very limited number of key personnel, variable cash salary can total 100 percent of the employee’s fixed cash salary. If the President considers an employee of the company to have made an exceptional contribution during the year, he may decide to award the employee an extra variable salary component in order to be international competitive. However, any such award is conditional on specific approval by the Remuneration Committee.

Long-term share-based remuneration

During the period 1999-2012, Investor has operated a long-term variable remuneration program which, since 2000, has been offered to all employees. The programs have been resolved by Investor’s Board. As of 2004, the programs have also been approved by the AGM.

The Board’s ambition is to encourage employees to build up a shareholding in Investor. The program is structured to provide a balance between, on the one hand, the employees’ assumption of risk through a requirement of personal investment in Investor shares and, on the other, the employees’ possibility to receive performance- related allotments of shares in Investor. The own investment makes the employees committed to Investor. In addition, a part of the remuneration to the employee is related to the long-term development of Investor and the Investor share and the employee is exposed to share price increases and decreases and the employee thereby has goals equivalent to those of Investor’s shareholders. The own investment requirement was implemented in 2006. 
    During 2011, a project, initiated by the Remuneration Committee, made a thorough evaluation of the long-term variable remuneration program for the Management and the employees which was adopted at the Annual General Meeting 2011. The evaluation was made from four perspectives; the employees’ motivation and alignment of interest with shareholders, the control effects, the effects of the program on the shareholder value and simplification. Investor’s policy is for the Management Group to own shares in Investor corresponding to a market value of at least one year’s salary for the President and at least half of one year’s salary for the other members of the Management Group.

See document “Guidelines for Remuneration and Long-term variable Remuneration 2012” for a report on the program for long-term variable remuneration that was approved by the Annual General Meeting on April 17, 2012.

Description of Investor’s system of variable remuneration to the Board of Directors and the Management Group, and of each outstanding share- and share-price-related incentive scheme

For description of Investor’s system of variable remuneration to the Board of Directors and the Management Group, and of each outstanding share- and share-price-related incentive scheme in accordance to the Swedish Code of Corporate Governance 10.3, see the adjacent document “Description variable remuneration and outstanding incentive scheme”.

Monitoring and evaluating

(Report according to the Swedish corporate Governance Code, 9.1 and 10.3)
For monitoring and evaluation of on-going, and during the year completed, programs concerning variable salary and of the current remuneration structure and levels of remuneration, see document "Evaluation according to the Corporate Governance Code 2012".

Remuneration to the Board

The Nomination Committee recommends the remuneration to the Board for the coming fiscal year and the AGM approves the remuneration. Remuneration is paid to Board members not employed by the company.

Members of the Board not employed by the company do not participate in Investor’s share-based remuneration programs.

For the remuneration to the Board, see document "Board Remuneration 2011" and "Board Remuneneration 2012". 

Information updated 2012-04-24 13:55:02