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 have a variable component to their salaries in addition to their fixed cash salary. The variable portion is based on individual goals 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. For the Management Group, the highest possible variable cash salary may vary due to the position held and employment agreements and amounts for the Members of the Management Group generally to 45-80 percent (lower or higher in exceptional cases however, not to exceed 100 percent) of the fixed cash salary.

Members of the Management Group within certain business areas may also participate in profit-sharing and parallel investment programs and be entitled to variable remuneration based on the development of a certain investment or an entire business area.

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

Long-term share-based remuneration

During the period 1999-2009, Investor operated a long-term variable remuneration program that was offered to all employees starting in 2000. This program was approved by the Investor Board. As of 2004, the programs were also approved by the AGM. The Board’s ambition is to create a structure that balances the risk-taking of employees through requirements that they invest in Investor shares and opportunities for employees to receive Investor shares by meeting performance criteria. The own investment makes the employees committed to Investor. In addition, a part of the remuneration to the employees is related to the long-term development of Investor and the Investor share. The employee is exposed to share price increases and decreases and has thereby goals equivalent to those of Investor’s shareholders. The own investment requirement was implemented in 2006.

In 2008 the Remuneration Committee commissioned a comprehensive evaluation of the long-term variable remuneration program. The program that was adopted by the 2009 AGM was slightly modified. The fundamental principles remained the same, but the program was redesigned to allow for easier follow-up and a more clear connection to the Investor share´s longterm value development goals. Just as in previous years, the program consists of two parts - a Stock Matching Plan and a Performance-Based Share Program. The 2010 program approved by the 2010 AGM is in all material respects identical to the program for 2009.

Investor’s policy is that the Management Group shall have an ownership in Investor shares corresponding to a market value of at least an annual salary for the President and at least half an annual salary for the other members of the Management Group.

See document “Guidelines for Remuneration and Long-term variable Remuneration 2010” for a report on the program for long-term variable remuneration for 2010 that was approved by the Annual General Meeting on April 14, 2010.

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”.

 

Information updated 2010-07-01 14:46:07