Annual Report 2012/13 - Clas Ohlson

Cont. Director’s report
Employees
The number of employees in the Group was an average
of 2,524 (2,370), of whom 1,097 (1,000) were women.
The distribution by country is 1,397 (1,305) in Sweden,
665 (628) in Norway, 223 (190) in Finland, 191 (210) in
the UK and 48 (37) in China. Further information about
employees is found in Notes 6 and 31 in the Annual
Report.
Risks and uncertainties
Clas Ohlson’s business operations are exposed to financial
and operational risks. Financial risks comprise primarily
wage inflation, raw-material prices, transport costs and
exchange-rate exposure, while operational risks relate to
establishment in the UK and Germany, purchasing in Asia,
IT systems, competition, logistics, key employees, social
responsibility, product range and shrinkage. With regard
to the description and quantification of the financial risks,
these are stated in Note 2 of the Annual Report and on
pages 24–26 in the printed annual report.
Social responsbility
Continuous work is conducted at Clas Ohlson with respect
to social responsibility, including follow-up activities relating
to our Code of Conduct. This work is de scribed on
pages 27–43 in the printed annual report and on the
company’s website: about.clasohlson.com.
Environmental impact
The company has a duty of notification with respect to
the activity relating to the temporary storage of electronic
waste. This duty of notification applies to any Swedish
municipality in which Clas Ohlson has a store. The company
does not otherwise have any operations for which
there is a duty of notification or for which it is mandatory
to obtain a permit under the Environmental Code. With
regard to electrical and electronic waste, the company
cooperates with the Elkretsen organisation in Sweden,
which is the joint company owned by the electrical industry
for waste disposal. The company is affiliated to the
recycling organisation REPA. In Norway, the company is
affiliated to the recycling organisations AS Batteriretur,
Renas AS, Elektronikkretur AS and Hvitvareretur AS. In
Finland, there is equivalent cooperation with Serty and in
the UK with Valpak.
Environmental work is undertaken continuously in the
Group, and this is described in greater detail on pages
40–43 of the printed annual report and on the website,
about.clasohlson.com
Guidelines for remuneration of senior management
The general principles of remuneration for senior management
are to be based on the position held, individual performance,
the Group’s financial results and the remuneration
being competitive in the country of employment. The
combined remuneration of senior management shall consist
of basic salary, variable salary in the form of a shortterm
incentive based on annual performance objectives,
long-term incentives based on performance over several
years, pension and other benefits. In addition to this, there
are terms applicable on notice of termination and severance
pay.
Clas Ohlson will strive to offer competitive total remuneration
levels with a focus on performance-based remuneration.
This means that the variable remuneration could
comprise a significant portion of the total remuneration.
The objective is that the basic remuneration should be the
median to the comparable market, while the total remuneration
shall be in the upper quartile of the market, when
Clas Ohlson AB achieves or exceeds its targets.
Basic salary
Basic salary will constitute the basis for total remuneration.
The salary level will be related to the relevant market and
reflect the degree of responsibility the work entails. The
trend for the basis salary shall be based on the degree
of performance and how well employees develop their
expertise in order to assume future assignments with
greater responsibilities. The basic salary will be reviewed
annually to ensure that it is commensurate with the market
and competitive.
Variable salary (Short Term Incentive “STI”)
Senior management will receive, in addition to basic salary,
STI for results that surpass one or more predetermined
levels of performance during a financial year designed to
promote the company’s long-term value creation. Clearly
defined performance goals are decided annually by the
Board or by individuals appointed by the Board. The performance
goals may be financially and personally connected
to the operations. The remuneration from the STI
programme has a limit (ceiling), which means that Clas
Ohlson AB is able to calculate the maximum remuneration
levels from the onset. To the extent a performance does
not correspond to the lowest performance level, no STI
will be paid. STI shall depend on the position held and
may amount to a maximum of 50 per cent of the salary
upon achieving the ceiling level, which also constitutes the
maximum outcome of STI. The STI remuneration is also
conditional upon the performances on which earnings are
based being sustainable over time, and that Clas Ohlson
AB is able to reclaim such remuneration paid that were
based on information that later turned out to be erroneous.
Long-term incentives (”LTI”)
The objective of the LTI programmes is to generate conditions
for retaining and recruiting competent personnel
to the Group. The programmes were designed because
it had been deemed desirable that participants to a
larger extent are shareholders in the company, which is
expected to have a positive impact on their long-term
work input. Connecting participants’ rewards to the
company’s income and value development will foster
company loyalty and thus the long-term value growth in
the company.
The long-term incentive programme will entitle employees
to acquire shares conditional upon approval by the
AGM. During the financial year, LTI 2010, LTI 2011 and
LTI 2012 were in progress. Following the end of the
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Director’s report