Note 13 - Salaries and other remuneration

Salaries and other remuneration to senior executives and other employees:

Board fees as well as employment and termination terms and conditions for senior executives:

The Group's Board comprises 5 (2010: 5) persons, of whom 60% are men (2010: 60%).

Other senior executives comprise 8 (2010: 8) persons, including the CEO, of whom 100% are men (2010: 100%). As from February 1, 2012, when the position of Head of Business Area Retail becomes vacant, the management team will temporarily comprise seven persons. A recruitment process has commenced and the position will be filled as soon as a suitable candidate is found. 

Principles
Fees and other remuneration to the Board of Directors, including Duni's Board Chairman, are decided upon by the Annual General Meeting (AGM). Pursuant to guidelines adopted by the AGM on May 5, 2011, remuneration to the CEO and other senior executives shall be on market terms and consist of basic salary, other benefits (including car benefit), other remuneration (including bonus, mileage compensation and vacation pay) and pension. At present, there are no long-term share-related incentive programs. "Other senior executives" are those persons who, together with the CEO, constitute group management. Pension benefits and other remuneration to the CEO and other senior executives are payable as part of the total remuneration.

In accordance with a resolution adopted by the AGM on May 5, 2011, the annual fee for the current Chairman of the Board was set at SEK 500,000, while the annual fee for other directors amounted to SEK 250,000 per director. In addition, fees shall be paid for committee work in the amount of SEK 50,000 to the Chairman of the Remuneration Committee and SEK 25,000 each to the other members of the Remuneration Committee, as well as SEK 100,000 to the Chairman of the Audit Committee and SEK 50,000 each to other members of the Audit Committee.

The Chairman of the Board received no remuneration other than fees for board work and committee work.

The tables below specify the amounts by which the decided fees stated above were incurred in the 2011 and 2010 financial years.

Remuneration and other benefits during the year

Bonuses

The CEO and all senior executives are included in a bonus system which is based on profitability and capital tie-up targets, primarily with respect to their individual operational area but also Group targets. For the CEO and CFO, the variable remuneration is capped at 55% of basic salary. For other senior executives, the variable remuneration is capped at 45% of basic salary. The bonus system covers only one year each time following a decision by the Board of Directors. For the 2011 financial year, a bonus of SEK 0 m (2010: SEK 1.2 m) was paid to the CEO.

Pensions

CEO 

The CEO has an agreed retirement age of 62. The pension expense corresponds to the costs for a defined contribution plan. Until the agreed retirement age, Duni shall allocate each month an amount equal to 35% of the CEO's monthly salary and a three-year average of the bonus, paid into a designated occupational pension insurance scheme. The allocated occupational pension provision is fully tax-deductible for Duni. There are no other outstanding pension obligations to the CEO.

Other senior executives

Five other senior executives have defined contribution plans, while two have defined benefit plans. "Pension entitlement salary" means fixed annual salary plus holiday pay, as well as an average of bonus payments received for the past three years. In addition, there are commitments regarding sickness pension and survivor's pension. Each month, Duni pays a cash pension contribution in accordance with each senior executive's individual pension plan. Pension is earned on a straight-line basis during the employment period, i.e. from the date of employment until retirement age. There are no outstanding pension obligations to other senior executives.

Severance compensation

CEO

The CEO has a separate agreement regarding severance compensation. The severance compensation comprises payment for twelve months following a termination period of six months. Only the Company is entitled to trigger the agreement.

The CEO is entitled to terminate his employment on six months’ notice. There is no entitlement to severance compensation in the event of termination by the CEO.

Other senior executives

Severance compensation amounts to between six and twelve months' salary following a termination period of three to twelve months, with only the Company being entitled to trigger agreements.

Preparation and decision-making process

The Remuneration Committee prepares issues relating to remuneration for Duni’s senior executives based on the guidelines adopted by the AGM regarding remuneration for senior executives, and negotiates with the CEO regarding the latter’s salary.

The Remuneration Committee and its Chairman are appointed each year at the constituent Board meeting following election. The Committee comprises at least three of Duni’s directors, one of whom shall be the Chairman of the Board. Pursuant to Duni’s rules of procedure, the other members of the Remuneration Committee shall be independent in relation to the Company and company management. The Remuneration Committee shall meet at least three times per year. Duni’s CEO shall participate at meetings of the Remuneration Committee, except when questions are addressed which relate to the CEO’s remuneration.

The Remuneration Committee is responsible for preparing issues concerning remuneration and other benefits for company management. Decisions are thereafter taken by Duni’s Board. The Remuneration Committee also participates in the preparation of proposals regarding the adoption of any share-related incentive programs within Duni. In 2011, the Remuneration Committee held three meetings at which minutes were taken.