Kinnevik Remuneration Committee
The Remuneration Committee of the Board of Investment AB Kinnevik comprises the Chairman of the Board, Cristina Stenbeck, and the Board members Dame Amelia Fawcett, Wilhelm Klingspor and Erik Mitteregger. Dame Amelia Fawcett is the Chairman of the 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) and how the guidelines for remuneration to the Senior Executives (being the CEO and the other members of the executive management) 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 Senior Executives
The remuneration to the Senior Executives during 2015 has consisted of fixed salary and variable remuneration, pensions and other customary benefits. The aim is to create incentives for the Senior Executives to execute strategic plans and deliver excellent operating results and to align their incentives with the interests of the shareholders. The intention is that all Senior Executives shall have a significant long-term shareholding in the Company.
The maximum outcome for variable salary paid in cash (STI) during 2015 was 100 percent of the fixed salary and was based on pre-established targets relating to both individual and Company performance. Part of every Senior Executive’s STI must be re-invested in Kinnevik shares. Information regarding STI is found in the Annual Report 2015.
Kinnevik employees may also participate in long-term share-related incentive programs (LTI). Information regarding the LTI, such as outcome, participation ratio, number of issued instruments and awards etc. is found in the Annual Report 2015 and on the Company's website at www.kinnevik.com.
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. The evaluation of the programmes for variable remuneration has shown that:
the programmes are important to help attract, motivate and retain the best talent for Kinnevik globally; and
the remuneration to the Senior Executives strikes an appropriate balance between motivating the Senior Executives and achieving a well-balanced competitive compensation that aligns the executives’ incentives with the interests of Kinnevik and the shareholders.
In order to further align the employees' incentives and rewards with the interests and return of the shareholders, the Board has decided to increasingly shift remuneration for Senior Executives towards equity-based remuneration. As a result of the evaluation, the Board has decided to propose certain changes to the LTI including an increase in the maximum number of potential performance shares awarded as well as the introduction of a new category of senior executives that are eligible to invest a larger number of shares.
Evaluation of the guidelines for remuneration to the Senior Executives
The Remuneration Committee's evaluation, and the review carried out by the auditor, have resulted in the conclusion that the guidelines for remuneration for Senior Executives established at the 2014 and 2015 Annual General Meetings have been applied by the Company during the year.
Evaluation of remuneration structure and levels of remuneration in Kinnevik
Based on the Remuneration Committee's evaluation of the remuneration programs, the Board has determined that the current remuneration structure and levels of remuneration for the Senior Executives have had a positive effect on Kinnevik. In an effort to increase the effectiveness of Kinnevik's remuneration programs and structures, particularly in aligning to a greater extent Senior Executives interests and incentives with shareholders' interests, the Board is proposing revised levels of remuneration for the LTI. The Board believes that these proposals will ensure the competitiveness of Kinnevik's remuneration structure and levels and facilitate the Company's ability to attract, motivate and retain key personnel.
Stockholm, April 2016
INVESTMENT AB KINNEVIK (PUBL)
THE BOARD OF DIRECTORS