Kinnevik Remuneration Committee
The Remuneration Committee, within the Board of Investment AB Kinnevik, comprises the Chairman of the Board, Cristina Stenbeck, and the Board members Dame Amelia Fawcett, Erik Mitteregger and Wilhelm Klingspor. Dame Amelia Fawcett is the Chairman of the Remuneration Committee.
In accordance with the Swedish Corporate Governance Code, the Remuneration Committee has monitored and evaluated programmes for variable remuneration (both on-going and those that have ended during the year), how the guidelines for remuneration to the senior executives adopted at the Annual General Meeting have been applied as well, as the current remuneration structure and levels of remuneration in the Company.
The following is the Board's report of the results of the evaluation carried out by the Remuneration Committee.
General information with respect to the remuneration to executive management of Kinnevik
The remuneration to the executive management have during 2013 consisted of fixed salary, variable salary, as well as the possibility to participate in long-term incentive programmes, pensions and other customary benefits. These components shall create a well-balanced remuneration which reflects individual performance and offers a competitive remuneration adjusted to conditions on the market.
The maximum outcome for variable salary paid in cash (STI) during 2013 was 75 percent of the fixed salary and was based on a combination of outcome in relation to established targets and individual performance. Information regarding the variable remuneration paid in cash is found in the Annual Report 2013.
For executive management and other key employees in Kinnevik there are long-term share related incentive programs (LTI). Information regarding the LTI such as outcome, participation ratio, number of issued and outstanding instruments etc. is found in the Annual Report 2013 and on the Company's website at www.kinnevik.se.
Evaluation of programmes for variable remuneration
The Remuneration Committee follows and evaluates the STI and LTI and the expected outcome has been reported to the Board and discussed at Board meetings. Also, the Remuneration Committee monitors to which extent the executive management and other key employees participates in the ongoing long-term share related programs LTIP 2011, LTIP 2012 and LTIP 2013.
Prior the Annual General Meeting 2014 the Remuneration Committee has initiated a more thorough evaluation of the LTI. The evaluation was made from a number of perspectives; the employees’ motivation and alignment of interest with shareholders, shareholder value and simplification. The evaluation has resulted in that the Board now proposes that the Annual General Meeting 2014 resolves to adopt two new LTI plans, a call option plan and a synthetic share option plan. These two new plans are proposed to replace the previous long-term share related incentive plan.
The call option plan is proposed to include all employees in the Kinnevik organisation. The objectives of the call option plan are both to facilitate that employees build up a significant personal shareholding in Kinnevik, and to further relate the employees remuneration to the long-term value growth of the Kinnevik-share and in so doing increase the alignment between the interests of the employees with those of the shareholders. The synthetic share option plan is proposed to include certain members of the executive management and key persons in the Kinnevik organisation working with Kinnevik's investments in unlisted companies. The objectives are to create a long-term incentive that is appropriate for, and related to, the long-term value growth in Kinnevik's unlisted investments.
Evaluation of the guidelines for remuneration to the senior executives
The Remuneration Committee's evaluation, and the review carried out by the auditor, has resulted in the conclusion that the guidelines for remuneration for senior executives established at the 2012 and 2013 Annual General Meetings have been applied on such remuneration in the Company during the year.
Evaluation of remuneration structure and levels of remuneration in Kinnevik
The Remuneration Committee's evaluation has resulted in that the Board made the assessment that the current remuneration structure and levels of remuneration to the executive management have had a positive effect on Kinnevik. However, the Board considers the proposed remuneration structure and levels of remuneration for LTI to the executive management to a greater extent aligns the executive
management's incentive with the shareholders' interest and strikes a better balance between motivating the members of the executive management and achieving a well-balanced competitive compensation that will facilitate to attract, motivate and retain key persons in the Kinnevik organisation.
Stockholm, April 2014
INVESTMENT AB KINNEVIK (PUBL)