Download - Intrum Justitia

NOTE 25 SALARIES AND OTHER REMUNERATION
Group Parent Company
SEK M
Salaries and other remuneration
to Board, Presidents and
2005 2004 2005 2004
Executive Vice Presidents 48.3 45.5 5.7 8.4
Salaries and other remuneration to other employees
Sweden, Norway & Denmark 175.2 169.5 – –
United Kingdom & Ireland 117.4 125.3 – –
Netherlands, Belgium & Germany 192.6 201.3 – –
Switzerland, Austria & Italy 107.0 105.6 – –
Finland, Estonia, Latvia & Lithuania 84.9 72.6 – –
France, Spain & Portugal
Poland, Czech Republic, Slovakia
116.9 98.7 – –
& Hungary
Head offi ces and central
34.0 33.6 – –
operations
Total salaries and other
19.7 23.6 16.1 16.0
remuneration, Group 896.0 875.7 21.8 24.4
Social security costs 313.6 225.8 13.6 17.9
Of which pension costs 53.4 58.5 6.4 9.9
The aggregate cost in the Group of salaries and other remuneration, social security
costs, including pension costs, and the cost of the employee stock option program
amounts to SEK 1,217.1 M (1,106.5).
Salaries and other remuneration in the Group fi gures include remuneration in
forms other than cash payments, i.e., benefi ts such as free or subsidized cars,
housing and meals. Parent Company fi gures only refer to cash payments.
There are no outstanding pension obligations to the Board or President, nor
have any bonuses or similar compensation been paid to the Board or President.
NOTE 26 TERMS AND CONDITIONS OF
EMPLOYMENT FOR SENIOR EXECUTIVES
The Chairman of the Board and other Directors receive fees set by the Annual
General Meeting, including special fees for work on the Audit Committee. The
company also compensates Board members for travel expenses in connection
with their Board work.
Remuneration for the President and other senior executives consists of a
base salary, variable compensation, other benefi ts, pensions, fi nancial
instruments, etc.
The circle of senior executives has changed during the year and the term
“other senior executives” in the table below refers to Henning Bensland, Marcel
van Es, Thomas Feodoroff, Pascal Labrue, Lennart Laurén, Benno Oertig and
from December 1 Monika Elling.
Pension benefi ts and remuneration in the form of fi nancial instruments, etc.
and other benefi ts for the President and other senior executives are part of their
total compensation.
Remuneration and benefi ts during the year
SEK thousand
Base
salary
/fee
Variable
compensation
Other
benefi ts
Pensions
costs Total
Chairman of the Board
Bo Ingemarson
President
450 – – – 450
Jan Roxendal
Other senior execu-
3,200 1,355 74 800 5,429
tives, seven persons1 13,250 6,130 520 1,987 21,887
Total 16,900 7,485 594 2,787 27,766
1 Compensation for other senior executives refers to compensation for the full
year for persons who were senior executives at year-end and therefore
excludes compensation to the former CFO who resigned during the year.
Board of Directors
In accordance with the decisions of the Annual General Meeting, total fees paid
to members of the Board of Directors, including fees for the Audit Committee,
amounted to SEK 1,660,000 for the year. The amount includes fees paid to the
Chairman. Board fees are distributed between Directors as determined by the
Board. The Directors have no pension benefi ts or severance agreements.
President
In accordance with his employment agreement, President and CEO Jan Roxendal
receives a fi xed annual salary of SEK 3,200,000 with a variable salary of up to SEK
2,100,000 and a company car as per the Group’s car policy. Two thirds of his
variable compensation for 2005 was based on predetermined earnings targets
and one third on quality targets. The company pays pension insurance premiums
corresponding to 25 percent of the President’s base salary. Jan Roxendal has
chosen to deduct SEK 60,000 per month from his gross salary to pay for additional
pension insurance premiums. The pensions are a defi ned contribution plan.
The company contributes to the pension the cost it saves through lower employer’s
contributions. Jan Roxendal has a minimum retirement age of 60, which can be
extended if agreed by the company. If Jan Roxendal terminates his employment
agreement, he has a six-month term of notice. If terminated by the company, his
notice is twelve months and severance of SEK 3,000,000 will be paid, provided
that termination is not due to a breach of contract on Roxendal’s part.
Other senior executives
All senior executives receive a fi xed annual salary and variable compensation.
The latter is based on the results achieved in their area of responsibility, the
Group’s operating earnings and individual performance objectives.
Management’s variable compensation is based on two incentive plans, one
short-term and one long-term. The former entails an annual bonus opportunity for
senior executives to receive a maximum of one year’s salary in variable compen -
sation. The long-term incentive plan means in principle that senior executives can
receive a maximum of two years’ salary based on results over a three-year period.
As a result, this variable component can be paid out no earlier than four years
after the plan’s inception. The long-term plan is limited to the period 2005–2007
and therefore does not automatically recur. Both forms of variable compensation
depend on the extent to which predetermined targets are met. The targets are set
high for both incentive plans and are especially qualifi ed for the plans with longer
terms. Regional managers generally have performance objectives where 80 per -
cent of their variable compensation is based on the region’s operating earnings
and 20 percent on the Group’s operating earnings
Regional manager Henning Bensland is a co-owner of Visegrad NV, a
company that owns 40 percent of the shares in Intrum Justitia Central Europe BV.
Refer to Note 34 Transactions with related parties.
Notice of termination for members of Group Management Team varies from six
to twelve months, regardless of whether termination is initiated by the employee
or the company.
Pension benefi ts vary from individual to individual and from country to country.
In several cases, they are included in monthly salaries. The majority of the senior
executives are entitled to retire at age 65, one at 62. All pension benefi ts are
defi ned contribution.
Incentive program
With regard to stock-related compensation, refer to Note 27 Share-based
incentive program for employees.
Decision-making process
The Board of Directors has appointed a Remuneration Committee to provide
recommendations to the Board on compensation issues, primarily as regards the
President and Group Management Team. The Remuneration Committee consists
of two Board members, who for the greater part of 2005 were Bo Ingemarson
(Chairman) and Lars Förberg. Reinhold Geijer, who was previously a member,
resigned from the Board of Directors and the Remuneration Committee in April.
The President and the company’s human resources director are co-opted to the
committee’s meetings, though not when their own salaries are discussed. In 2005
the committee held in total seven meetings. The scheduled meetings discussed
the Group’s employee stock option program, salary increases for certain regional
managers due to reorganizations and the framework for compensation levels in
2006. The called sessions mainly discussed the salaries of newly hired senior
executives and the variable compensation paid for 2004. The committee’s
recommendations have been submitted to the Board for decision.
55