Note 3 – Employees, personnel costs and executive remuneration In this note, amounts are given in SEK thousands unless otherwise stated. Average number of employees 2015 of whom men 2014 of whom men Parent Company Sweden 9 56 % 9 56 % Total in the Parent Company 9 56 % 9 56 % Subsidiaries Sweden 338 85 % 346 87 % Finland 292 92 % 293 90 % Estonia 26 77 % 27 77 % Latvia 10 83 % 9 78 % Lithuania 10 70 % 10 78 % Poland 22 93 % 19 81 % Czech Republic 42 67 % 50 65 % Slovakia 19 47 % 19 47 % Total for subsidiaries 759 87 % 773 85 % Group total 768 87 % 782 85 % Specification of gender distribution in Group management 2015 2014 Gender distribution, Group management Percentage Women Percentage Women Parent Company Board 20 % 17 % Other senior executives 0 % 0 % Group Board 20 % 17 % Other senior executives 0 % 0 % Salaries, other remuneration and social security expenses Group 2015 2014 Salaries and remunerations 299,678 303,633 Share Savings Scheme cost – 24 Pension expense, defined-contribution plans 32,758 32,186 Social security contributions 67,897 67,508 400,333 403,351 Parent Company 2015 2014 Salaries and remunerations Social security expenses Salaries and remunerations Social security expenses Parent Company 12,068 6,240 17,422 9,182 (of which, pension expenses)1) (2,548) (4,056) 1) Of the Parent Company’s pension expenses, 1,226 (1,644) refers to senior executives. There are no outstanding pension commitments. Salaries and other remunerations distributed between the Parent Company and its subsidiaries and between senior executives and other employees1) 2015 2014 Senior executives 2) Other employees Senior executives 2) Other employees Parent Company 6,682 5,386 10,7753) 6,647 (of which, bonuses, etc.) (–) (–) (–) (–) Subsidiaries 9,037 271,759 10,118 268,650 (of which, bonuses, etc.) (–) (940) (8) (776) Group total 15,719 277,145 20,893 275,297 (of which, bonuses, etc.) (–) (940) (8) (776) 1) Salaries and other remuneration include base salary and supplementary vacation pay. 2) Senior executives include Board members, members of Group Management and company presidents. 3) Salary of SEK 3.3 M was allocated to the severance pay for Kimmo Väkiparta. Defined benefit plans Pension obligations for retirement pensions and family pensions for white-collar employees in Sweden are secured through an insurance policy provided by Alecta. According to a statement (UFR 10) from the Swedish Financial Reporting Board, this is a multiple-employer defined benefit plan. The Company has not had access to information that would permit recognition of its proportional share of the plan’s commitments, plan assets and costs that meant that the plan could not be recognized as a defined-benefit plan. The ITP pension plan secured through insurance provided by Alecta is accordingly recognized as a defined contribution plan. The premium for the defined-benefit retirement pension and family pension is calculated individually, depending on salary, already earned pension and anticipated remaining period of service. Anticipated fees for the next reporting period for ITP 2 insurance subscribed with Alecta amounts to SEK 5.5 M (5.5). The collective funding ratio is comprised of the fair value of Alecta’s assets as a percentage of insurance obligations computed according to Alecta’s actuarial assumptions, which do not accord with IAS 19. The collective consolidation level shall normally be allowed to vary between 125 and 155 percent. If Alecta’s collective consolidation level is below 125 percent or exceeds 155 percent, action should be taken with the aim of creating conditions for the consolidation level to return to the normal interval. In the event of low consolidation, one action may be to raise the agreed price for new subscription and expansion of existing benefits. In the event of high consolidation, one action may be to introduce premium reductions. At the end of 2015, Alecta’s surplus expressed as the collective funding ratio amounted to 153 percent (143). Defined contribution pension plans The Group has defined contribution pension plans for employees in Sweden for which expenses are fully paid by the companies. Pension plans in Finland and other countries are treated as defined contribution plans. For defined contribution plans, pension contributions are paid to a pension insurance company and recognized as an expense in profit and loss for the accounting period in which they occur. There are defined contribution plans in other countries for which the expenses are paid partially by the subsidiaries and partially by employee contributions. Payments are made regularly to these plans according to plan rules. Executive remuneration Total remuneration to the President and CEO and other senior executives consists of base pay, variable remuneration, pension and other benefits. These remuneration components are based on the guidelines for executive remuneration adopted by the 2015 Annual General Meeting, which are detailed in the Board of Directors’ Report. The following tables provide details of actual remunerations and other benefits paid in financial years 2015 and 2014 to Board members, the President (who is also the CEO), the Executive Vice President and other senior executives. The latter are those individuals who, alongside the President and CEO and Executive Vice President and CFO are members of Group Management. Remunerations and benefits 2015 Basic salary/Board fee Variable remuneration Others benefits6) Pension expenses Share Savings Scheme Other remuneration Total Pension commitments Chairman of the Board Anders Ullberg1) 153 – – – – 0 153 – Petter Stillström2) 377 – – – – – 377 – Directors Roger Bergqvist 210 – – – – – 210 – Charlotte Hansson 210 – – – – – 210 – Lars Olof Nilsson 280 – – – – – 280 – Jörgen Zahlin 250 – – – – – 250 – Acting President and CEO Lars Engström3) 1,925 – 26 495 – 0 2,446 – President and CEO Anders Martinsson4) 900 – 151 224 – 1 1,276 – Other senior executives5) 5,336 – 525 1,312 – 9 7,182 – Total 9,641 – 702 2,031 – 10 12,384 – Recognized as an expense in the Parent Company 6,611 – 406 1,226 – 5 8,248 – 1) Anders Ullberg withdrew from the Board of Directors in connection with the 2015 Annual General Meeting. 2) Petter Stillström began as the Chairman of the Board of Directors in connection with the 2015 Annual General Meeting. 3) Lars Engström served as interim CEO until July 31, 2015. 4) Anders Martinsson began as the CEO on August 1, 2015. 5) Other senior executives consist of four people. 6) Other benefits include supplementary vacation pay. Remunerations and benefits 2014 Basic salary/Board fee Variable remuneration Others benefits7) Pension expenses Share Savings Scheme Other remuneration Total Pension commitments Chairman of the Board Anders Ullberg 460 – – – – 2 462 – Directors Roger Bergqvist 210 – – – – – 210 – Marita Jaatinen1) 70 – – – – – 70 – Charlotte Hansson2) 140 – – – – – 140 – Lars Olof Nilsson 280 – – – – – 280 – Petter Stillström 210 – – – – – 210 – Jörgen Zahlin 250 – – – – 1 251 – President and CEO Kimmo Väkiparta3) 2,147 – 249 695 – – 3,091 – Acting President and CEO Lars Engström4) 1,162 – 164 330 – 2 1,658 – Executive Vice President and CFO Torbjörn Clementz5) 812 – 136 214 6 1 1,169 – Other senior executives6) 4,922 – 738 1,101 3 5 6,769 – Total 10,663 – 1,287 2,340 9 11 14,310 – Recognized as an expense in the Parent Company 7,664 – 880 1,644 8 5 10,201 – 1) Marita Jaatinen withdrew from the Board of Directors in connection with the 2014 Annual General Meeting. 2) Charlotte Hansson became a Board member in connection with the 2014 Annual General Meeting. 3) Kimmo Väkiparta served as President until August 25, 2014. Under the agreement, Kimmo Väkiparta is entitled to compensation until August 25, 2015. This compensation amounts to SEK 4.4 M and, in addition to salary, primarily includes pension provisions. This amount is not included in the table above. 4) Lars Engström took over as interim CEO on August 25, 2014. 5) Torbjörn Clementz ended his appointment as CFO and Executive Vice President on April 30, 2014. 6) Other senior executives consist of three individuals up until April 30, 2014. After that the other senior executives consist of four individuals. 7) Other benefits include supplementary vacation pay. Detailed below are the agreed terms for remuneration to the Board, the President and CEO and other senior executives. For an account of guidelines approved by the Annual General Meeting, see the Board of Directors’ Report. Board remuneration The Chairman and other Board members are paid Board member fees as resolved by the Annual General Meeting. The Annual General Meeting resolved that Board member fees totaling SEK 1,470,000 (1,470,000) will be distributed among the Board members as follows: SEK 420,000 (420,000) to the Chairman of the Board and SEK 210,000 (210,000) to each of the remaining Board members who are not employees of the Company. In addition, remuneration of SEK 70,000 (70,000) will be paid to the Chairman for his work in the Audit Committee and SEK 40,000 (40,000) for each of the other members of the Audit Committee. No fees are paid to members of the Remunerations Committee. Other remuneration has been paid in the form of taxable travel expense reimbursements. Remuneration to the President and CEO Remuneration In accordance with a decision by the Board of Directors, remuneration to the President and CEO normally takes the form of base salary, variable remuneration, pension and other benefits. The base pay of the President and CEO amounted to SEK 2,160 M (3,300). For the President and CEO, maximum variable remuneration payable is 40 percent of base pay. Potential bonus payments and the size of them are related to targets defined in advance and set by the Board. Term of notice and severance pay The President and CEO has a 12-month period of notice in the event of termination by the company and six months upon resignation. During the term of notice, the President and CEO is entitled to full pay and other benefits of employment, regardless of whether there is a duty to work or not. Members of Group management are not entitled to severance pay. Pension benefits In addition to benefits in accordance with the National Income Replacement Pension Act, pension contributions are made corresponding to 30 percent (30) of fixed annual salary plus vacation pay, which constitutes pensionable pay. BE Group AB’s commitment is limited to paying the annual premium. Pension rights are not conditional on future employment. Remunerations for other senior executives of the Parent Company and Group Remuneration Remuneration consists of base pay, variable remuneration, pensions and other benefits. The maximum variable remuneration payable to other senior executives is 30 percent of base pay. Whether or not bonuses are distributed and bonus amounts are determined by the CEO based on attainment of financial targets and individual targets. Term of notice and severance pay Other senior executives have a period of notice of up to 12 months when notice of termination is issued by BE Group. The senior executives are required to give six months’ notice when resigning. During the term of notice, the senior executives are entitled to full pay and other benefits of employment. Members of Group management are not entitled to severance pay. Pension benefits For other senior executives, contribution-defined pension solutions are applied. BE Group’s commitment is limited to paying the annual premium. Pension rights are not conditional on future employment. Pensionable pay consists of fixed annual salary plus average bonus for the past three years. Remuneration Committee Please see the Corporate Governance Report for more information about BE Group’s preparation and decision process regarding executive remuneration.