Annual Report 2010 - Falck

40 Falck Annual Report 2010 | Management review
committee for this purpose. In Falck, two of the three members
of the Audit Committee represent major shareholders and the
company therefore does not meet the recommendation that a
majority of the members of a management committee should
be independent. However, the Board of Directors has considered
it important that committee members hold the necessary
qualifications in accounting or auditing, whereas the Board of
Directors always has the final responsibility for the decisions
prepared by the Audit Committee.
The rules of procedure provide that our Board of Directors
must ensure that the Board of Directors possesses relevant
and adequate knowledge and skills to manage the company
when nominating candidates to the shareholders at the general
meeting. The Board of Directors aims to nominate candidates
who are 67 years of age as a maximum. Prior to any election of
members of the Board of Directors by the shareholders, candidates’
CVs are disclosed, including information about executive
positions in other companies.
The Board of Directors meets whenever the chairman deems
it necessary or when requested by a member of the Board of
Directors or a member of the Executive Management Board. At
least five meetings of the Board of Directors are held each year.
6. Remuneration of Management
Openness and transparency about all important issues regarding
the principles for and amounts of the total remuneration offered to
members of the governing bodies are essential. The principles of the
remuneration policy should support a long-term value-creation for
the company.
Competitive remuneration is a prerequisite for attracting and
retaining competent members of the governing bodies. The total
remuneration package, i.e. the fixed and variable components and
other remuneration components, should be reasonable and reflect
the governing body members’ independent performance, responsibilities
and value creation in the company. The variable component
of the remuneration should be based on actual achievements over
a period of time with a view to long-term value creation.
Falck’s position
Falck believes that it complies with the recommendations under
heading 6 in all essentials.
The general principle is for the remuneration of the Board of
Directors in Falck to be at a level considered comparable with
companies listed on NASDAQ OMX Copenhagen of a similar size
and internationalisation profile. The company does not use incentive
pay for the Board of Directors. The following guidelines
apply to the fixed remuneration of the Board of Directors:
• The Chairman of the Board receives three times the basic
remuneration
• The Deputy Chairmen of the Board receive twice the basic
remuneration
• The basic remuneration is not subject to any adjustment
mechanisms
• Additional separate remuneration is paid to Board members
who sit on Board committees. However, the total remuneration
for Board work paid to the Chairman and Deputy
Chairman of the Board of Directors and to other members of
the Board of Directors may not exceed four times and twice
the basic remuneration, respectively.
We aim for members of the Executive Management Board to
receive a fixed salary considered competitive relative to, and
comparable with, the salaries paid to the executive boards by
other companies of similar size, and which is reasonable relative
to the tasks performed. The remuneration of the Executive
Management Board is reviewed annually at the initiative of the
Chairman of the Board of Directors. Falck’s annual report does
not disclose the remuneration paid to each member of the Executive
Management Board. We believe this would not provide
additional relevant information compared with disclosure of the
total remuneration paid to the Executive Management Board.
Incentive pay in Falck serves to better align the interests of our
Executive Management Board and our shareholders. We do this
by motivating the Executive Management Board to achieve the
goals defined for the company, and by making it less attractive
for members of the Executive Management Board to leave the
company prematurely. Incentive pay can also be a useful tool to
attract new Executive Management Board members. Such programmes
may comprise remuneration in the form of options,
warrants, shares and/or bonus agreements.
7. Financial reporting
Each member of the supreme governing body and the executive
board is responsible for preparing the annual report and other