Review of 2010 – USD version - Skanska

Note
37 Continued
Remuneration and benefits recognized as expenses in 2010
Directors’ fees
The 2010 Annual Shareholders’ Meeting decided that fees would be paid to the
Board members elected by the Meeting, except for the President and CEO, totaling
USD 783,900, including a special appropriation for committee work. See the table below.
USD thousand Director's fee Audit Committee
Compensation
Committee
Project Review
Committee
Chairman of the Board
Sverker Martin-Löf 187.3 13.9 10.4 20.8 232.4
Other Board members
Stuart Graham 62.4 17.3 10.4 20.8 111.0
Lars Pettersson 62.4 10.4 72.8
Matti Sundberg 62.4 20.8 83.2
Finn Johnsson 62.4 62.4
Sir Adrian Montague 62.4 20.8 83.2
Josephine Rydberg-Dumont 62.4 62.4
Charlotte Strömberg 62.4 13.9 76.3
Board of Directors 624.3 45.1 31.2 83.2 783.9
Total
Chairman of the Board
During 2010 the Chairman of the Board, Sverker Martin-Löf, received a director’s fee of
USD 187,300 and USD 45,100 related to committee work, altogether USD 232,400.
Board members
Other members of the Board did not receive any remuneration for their role as Board
members beyond their regular directors’ fees and remuneration for committee work.
Matti Sundberg received USD 20,800 for serving as a Board member of the Finnish
subsidiary Skanska Oy, while Sir Adrian Montague received about USD 13,900 for his
assignment as an advisor to Skanska’s U.K. operations. Remuneration to Stuart Graham
is explained in the section entitled “The Company’s former President and CEO.”
For Board members appointed by the employees, no disclosures are made concerning
salaries and remuneration as well as pensions, since they do not receive these in their
capacity as Board members. For Board members who previously, before the beginning
of the financial year, were employees of the Company, disclosures are made concerning
pension obligations in their former role as employees.
Senior Executive Team
USD thousand
Annual salary
Variable
remuneration 1
Allocated value
of share incentive
programs 2
Other
remuneration
and benefits Pension expense Total
President and CEO
Johan Karlström 1,318.0 659.0 607.2 19.1 536.0 3,139.2
Other SET members (9 persons during the year) 3,923.4 3,851.2 1,941.6 315.4 1,355.2 11,386.9
Total 5,241.4 4,510.2 2,548.8 334.5 1,891.2 14,526.1
1 Variable remuneration related to the 2010 financial year is preliminary and will be finally fixed and disbursed after a follow-up of the outcome in the first quarter of 2011. The amounts included under
the heading “Variable remuneration” in the above table refer to the 2010 financial year.
2 The value stated refers to a preliminary allotment of matching shares and performance shares for 2010, at the share price on December 30, 2010 (SEK 133.30, corresponding to USD 19.59). The Senior
Executive Team will receive an estimated 8,130 matching shares and 121,948 performance shares. See the section entitled “Long-term share programs.” The Board will decide the final outcome after
a follow-up of operations during the first quarter of 2011. In order to receive matching shares and performance shares, an additional three years of service are required. The cost is allocated over three
years in compliance with IFRS 2. See the section entitled “Long-term share programs.” In addition to the above amounts, the President and CEO as well as some other members of the Senior Executive
Team received remuneration related to the 2006 financial year. See the sections entitled “The President and CEO” and “Other members of the Senior Executive Team.”
The President and CEO
During 2010 the President and CEO, Johan Karlström, received a fixed salary of
USD 1,318,000 plus a variable salary element of USD 659,000 based on the financial targets
that were achieved, which were equivalent to a 100 percent fulfillment level. The
final outcome for the President and CEO’s variable remuneration will be established by
the Board after a follow-up of operations during the first quarter of 2011. The preliminary
outcome amounted to a maximum possible outcome of 50 percent of fixed annual
salary. Disbursement normally occurs during May of the year after the performance
year. The President and CEO is also covered by the Group’s two Employee Ownership
Programs SEOP1 and SEOP2, with an allocation of matching shares and performance
shares, defined in the section entitled “Long-term share programs” in this note. Within
the framework of SEOP1, Mr. Karlström purchased 7,747 shares during 2010, which
resulted in 1,937 matching shares equivalent to USD 37,900.
An estimated 29,051 performance shares will be allocated, at a value of
USD 569,300, since the “Outperform” targets were 100 percent fulfilled. The stated
value refers to the share price on December 30, 2010 (SEK 133.30, corresponding to
USD 19.59). The final outcome of performance shares will be established by the Board
after a follow-up of operations during the first quarter of 2011.
During 2010 the President and CEO also received 8,803 shares, equivalent to
USD 144,600, due to his earlier role as a member of the Senior Executive Team and
attributable to the earlier share incentive program, the Skanska Share Award Plan,
which is related to remuneration for the financial year 2006. See the section entitled
“Long-term share programs.”
The President and CEO will be eligible for a pension from age 60 at the earliest. Annual
pension provisions will total 40 percent of fixed annual salary. The cost during 2010
totaled USD 536,000.
The Company’s former President and CEO
Stuart Graham stepped down from the position of President and CEO of Skanska on
April 3, 2008 and since then has continued to be employed at Skanska as an advisor
and Chairman of the Board of Skanska Inc. in the United States. His employment ends
in February 2011. Since 2009 Mr. Graham has been a member of the Skanska Group’s
Board of Directors.
During his period as President and CEO, Mr. Graham had so-called expert tax status,
which ceased in September 2005. Because of this, during 2005 an agreement was
reached on special compensation totaling no more than USD 1,442,800, with disbursement
allocated over the three-year period 2008–2010. The 2010 disbursement, which
was the last, amounted to USD 479,600.
In addition to his director’s fee from Skanska AB and the above remuneration,
Mr. Graham received a salary, fees and other remuneration from Group companies in
the amount of USD 506,000 during the financial year.
As a former President and CEO, Mr. Graham is entitled to a defined-benefit pension,
for which the cost during the financial year amounted to USD 570,300. The pension
entitlement is earned on a straight-line basis during his period of employment until
February 2011 and will be disbursed during the remainder of his life.
Skanska Review of 2010 – USD version Notes, including accounting and valuation principles 147