ANNUAL REPORT 2009 - Saab

financial information > notesNote 37, cont.Parent Company’s pension obligationsFunds allocated for pensions according to the balance sheet correspond tothe net present value of existing pension obligations.Parent CompanyMSEK 31-12-2009 31-12-2008FPG/PRI pensions 257 482Other pensions 62 65Other provisions for pensions 60 59Total 379 606Of which credit guarantees via FPG/PRI 287 513GroupParent CompanyMSEK 2009 2008 2009 2008Amount of provisionexpected to be paid aftermore than 12 months 4 4 263 484Share matching planIn April 2007, Saab’s Annual General Meeting resolved to offer employees theopportunity to participate in a Global Share Matching Plan. The Board considersit important that Saab’s employees share a long-term interest in the appreciationof the company’s shares. Employees who participate in the plan canhave up to 5 per cent of their gross base salary withheld to purchase shares onthe nasdaq omx Stockholm during a twelve-month period. Participants havesaved each month beginning with their November 2007 salary. Shares werepurchased in January, May, August and November 2008, at which point thecontribution period concluded. During 2008 the employees has purchased673,235 B shares. If the employee retains the purchased shares for three yearsafter the investment date and is still employed by the Saab Group, they will beallotted a corresponding number of Series B shares.In April 2008, Saab’s Annual General Meeting resolved to offer employees anew share matching plan with similar terms as the 2007 plan. In 2009, employeespurchased 680,267 Series B shares, corresponding to the maximum number ofmatching shares. The savings period was concluded in October 2009.In addition, a performance-based plan was introduced for senior executivesentitling them to 2–5 matching shares depending on the category theemployee belongs to. In addition to the requirement that the employeeremain employed by Saab after three years, there is also a requirement thatearnings per share grow in the range of 5 to 15 per cent. In 2009, participantspurchased 118,936 Series B shares.The maximum number of matching shares in the two plans are 1,040,000.The plans were started in November 2008 with purchases from January 2009through November 2009.In April 2009, Saab’s Annual General Meeting resolved to offer employeesa new share matching plan and a performance share plan with correspondingterms as the 2008 plan with the difference that these plans start on 1 January2010 and continue through the calendar year 2010. The maximum number ofmatching shares in these two plans is 1,040,000.Share matching plan 2007 plan 2008 plan 2009 plan TotalNumber of matching shares atbeginning of financial year 645,621 - - 645,621Allotted during the year - 680,267 - 680,267Less early matching -13,962 -7,512 - -21,474Forfeited matching shares -3,511 -5,613 - -9,124Number of remaining matchingshares at year-end 628,148 667,142 - 1,295,290Number of participants,31 Dec. 2009 5,084 2,979 - -% of total number of employees 39 23 - -Average remaining maturity, years 1.6 2.6 - -Performance share plan 2008 plan 2009 plan TotalNumber of matching shares at beginningof financial year - - -Allotted during the year 118,936 - 118,936Less early matching - - -Forfeited matching shares -2,796 - -2,796Number of remaining matchingshares at year-end 116,140 - 116,140Number of participants, 31 Dec. 2009 193 - -Average remaining maturity, years 2.6 - -Recognised expense for above-mentioned plan,including social security expenses 2009 2008Share matching plan 2007 32 15Share matching plan 2008 12 -Performance plan 2008 4 -Total 48 15The fair value of the services rendered is based on the share price of thematching shares that are expected to be allotted. The share price is determinedat the time of the participants’ investment adjusted by the dividendthat does not accrue to the employee during the vesting period.The company’s expense is recognised in the balance sheet as equity andaccrued expenses (social security fees). During 2009 the administrativeexpenses for the share matching plans were msek 3.SENIOR EXECUTIVES’ BENEFITSRemuneration to Board membersIn accordance with the resolution of the Annual General Meeting, the feespaid to the members of the Board amount to sek 3,650,000 (3,650,000), consistingof sek 1,100,000 (1,100,000) to the Chairman and sek 425,000(425,000) to each of the other members elected by the Annual General Meeting,with the exception of the President. The members nominated by bae Systems– Michael O’Callaghan and George Rose – both of whom are employeesof bae Systems, have declined their fees with reference to bae Systems’ policy.For audit committee work, committee chairman Peter Nygårds alsoreceived fees of sek 150,000 (150,000) and committee members LennartJohansson and Per-Arne Sandström sek 100,000 (100,000) each.For compensation committee work, committee chairman Lena TreschowTorell also received fees of sek 135,000 (135,000) and committee memberMarcus Wallenberg sek 80,000 (80,000). George Rose has declined his feeswith reference to bae Systems’ policy.In his capacity as a consultant in 2009, Board member Per-Arne Sandströmalso received sek 125,000 from Saab ab for consulting services relatedto organisational development.Remuneration to the PresidentThe salary paid to President and ceo Åke Svensson consists of a fixed portionand a variable portion. The variable portion is based on predetermined quantitativeand qualitative objectives each year. The variable compensation canamount to a maximum of 50 per cent of the President’s fixed salary. The preparationand decision-making process for compensation issues regarding thePresident is handled by the Board’s Remuneration Committee according tothe principles laid down by the Annual General Meeting.During the period November 2007 through October 2008, the Presidentparticipated in the Saab Share Matching Plan approved by the Annual GeneralMeeting 2007 for all company employees. From November 2008, thePresident participates in the Saab Global Performance Share Plan approved bythe Annual General Meeting 2008. Accumulated outstanding matching rightsin Saab Share Matching Plan 2007 amount to sek 121,411 as of 31 December2009, and the Saab Global Performance Share Plan 2008 amounts tosek 299,778 in the event of a maximum outcome. In 2009, the Presidentreceived salary, variable compensation and other benefits totalling sek6,293,894 (7,631,449), of which the variable compensation for 2008 accountedfor sek 588,600 (1,620,000) and other benefits, including a car allowance, forsek 19,024 (23,137).saab annual report 2009 105