The Swedish Industry and Commerce Stock Exchange Committee (Näringslivets Börskommitté or NBK) has issued a new recommendation regarding information about the benefits for senior managers of Swedish and foreign companies whose shares or depositary receipts are listed in Sweden. Foreign companies can be granted exemption from the information requirements under the recommendation by the stock exchange or marketplace where the company's shares or depositary receipts are listed. Information under the new recommendation must be provided for the first time in the 2002 annual report. Should the benefits be amended in any material proportion by comparison with previous given information, this must be disclosed in the following interim report. Foreign companies can, in consultation with the relevant Swedish stock exchange or marketplace, give the information elsewhere than in the annual report or the interim report. The recommendations from NBK are part of the listing contract with the Stockholm Stock Exchange.
The senior managers are divided into the highest senior managers and other senior managers. The first consist of the chairman of the board, members of the board not employed by the company, to whom remuneration has been paid besides the remuneration for the board work, and the CEO. For every one of the highest senior managers information must be given, on an individual basis, about the following:
- The total amount of all remunerations and other benefits. Each remuneration component (exceeding 10% of the annual salary) must be disclosed. Remuneration received from the company, also for assignments within the board member's normal professional competence, for example as a lawyer, scientific expert or consultant, must be disclosed.
- Fixed and variable parts of the remuneration. The main mechanism for the calculation of the variable remuneration must be explained.
- Holdings of and at the time of allotment the purchase price and market value of financial instruments and other options or rights regarding share-based incentive schemes, received during the year. The information must show whether the allotment was a benefit (subsidy).
- Holdings of financial instruments received in previous years.
- The most material terms in the manager's agreements on pension and termination payment.
For the other senior managers, information must be given about the total amount of remuneration and other benefits as well as a comprehensive description of the most material terms in their agreements on pension and termination payment. Holdings of financial instruments must also be disclosed. The information must not be given on an individual level, but for the group together. The number of people in the group must be specified.
The company must give a description of the principles for remuneration to the senior management. With regard to remuneration of the highest senior managers, information must be given about the preparation and decision-making process applied by the company.
An English translation of the recommendation should soon be available at NBK's website, www.nbk.ihb.se.
Ulf Rehnmark and Carl Asterius