Note 4 - Employees, employee expenses and benefits

1. Employees under fixed-term employment contracts includes probationary contracts for 68 (52) employees.
2. Fixed-term contracts includes both temporary contracts and other fixed-term contracts.

Directors’ emoluments

1. The amount pertains to invoiced amount and includes VAT.

The Chairman and Directors of the Board receive fees in accordance with the resolution by the Annual General Meeting (AGM). The same applies to the Chairman and Directors on the Audit Committee and the Remuneration Committee. Under the AGM resolution, Board members can invoice their fees as business activities carried out under the respective Board member’s sole trader status or as a company with an additional amount corresponding to the social security expenses that AB Svenska Spel does not have to pay. The amounts stated in the notes marked with a footnote pertain to invoiced amounts and include VAT but not social security expenses.

Board members, employees of the Government Offices of Sweden, and employee representatives and their deputies are not paid Board or committee fees.

The remuneration presented above pertains to the Parent Company AB Svenska Spel. No fees are paid to the directors of subsidiaries and sub-­subsidiaries if the directors are employed in companies in the Svenska Spel Group, that is, executive directors. The Playscan subsidiary has one Board member who is not employed by AB Svenska Spel and who receives fees for Board work, that is, a non-executive director.

Remunerations and terms for senior executives

1. Pension costs include possible salary sacrifice to pension.
2. The amount includes severance pay.
3. Correction of previously unreported housing allowance.

Senior executives

Those who at any time are part of the team of "senior executives" are determined by the Remuneration Committee under the application of the provisions stipulated in Chapter 5, Section 20 of the Annual Accounts Act (1995:554). This team includes the President of the Parent Company and all members of Group management, managers who are not members of Group management, but report directly to the President of the Parent Company, the presidents of the subsidiaries and the members of the subsidiaries’ management teams.

Guidelines, nomination process, decisions and monitoring

Remuneration principles for executives were adopted by the AGM on 24 April 2014 and are applied throughout the Group. These guidelines are based on the guidelines issued by the Government on 20 April 2009 regarding employment terms for senior executives in state-owned companies. The policies specify that total remuneration to senior executives should be reasonable and well balanced. Remuneration should be competitive, have a ceiling, be appropriate and contribute to sound ethics and corporate culture.

The decision on employment terms for the President of the Parent Company is prepared by the Remuneration Committee and decided by the Board. Employment terms for other senior executives who report to the CEO are decided by the CEO after consultation with the Remuneration Committee. Before decisions are made regarding individual remuneration, written documentation is to be presented showing the Company’s overall costs. The Board’s Remuneration Committee ensures that employment terms comply with Government guidelines by comparing remuneration for equivalent roles in other state-owned and private companies that are comparable to Svenska Spel in terms of size, complexity and revenue.

Remuneration of the CEO and the Company’s senior executives consists of fixed basic salaries, benefits and pensions. Benefits primarily comprise company cars. Senior executives who do not have a company car benefit receive monthly compensation equivalent in value to the company car. Pension costs pertain to the cost that impacted earnings in 2014. Senior executives have the option of exchanging part of their gross salary for extra pension deposits, which are included in the recognised pension amount. Svenska Spel does not compensate senior executives with variable or bonus-based remuneration or any remuneration in the form of financial instruments.

Decisions concerning employment terms and conditions for senior executives of subsidiaries are made by the presidents of the subsidiaries following consultations with the subsidiaries’ Boards. Remuneration to senior executives of the subsidiaries is recognized in the annual reports for the subsidiaries.

President and CEO

Lennart Käll, the President and CEO of AB Svenska Spel, received salary and benefits of SEK 3,927,000 in 2014. Lennart Käll’s pension premiums amounted to SEK 1,138,000 in 2014. Lennart Käll is not part of the ITP plan and is entitled to pension premiums corresponding to 30% of his pensionable monthly salary in accordance with his agreement.

On notice of termination, a mutual notice period of six months applies. In the event that notice is given by the Company, severance pay is paid out for a maximum of 18 months. The severance pay is paid monthly with no supplement for pension or benefits. Should new employment be secured or income received from business activities, severance pay from the company that initiated the termination is reduced by an amount corresponding to the new income during the severance-pay period. Severance pay is never paid past the age of 65.

Other senior executives within the Group management

For other senior executives within the Group management, pensions are paid in line with the ITP plan, with a retirement age of 65. On notice of termination, a mutual notice period of six months applies. In the event that notice is given by the Company, severance pay corresponding to a maximum of 18 months’ salary is paid. The severance pay is paid monthly with no supplement for pension or benefits. Should new employment be secured or income received from business activities, severance pay from the company that initiated the termination is reduced by an amount corresponding to the new income during the severance-pay period. Severance pay is never paid past the age of 65.

Other senior executives

For other senior executives, remuneration is paid in the form of fixed basic salaries, benefits and pensions under collective agreements in accordance with the ITP plan, with retirement at the age of 65.

Other employees

Employees of the Svenska Spel Group receive remuneration in the form of fixed basic salaries, benefits and pensions under collective agreements. Variable remuneration is paid to employees for work performed during, for example, unsociable working hours. Bonus-based remuneration or remuneration in the form of financial instruments is not paid.

Commitments for defined-benefit old-age pensions and family pensions (alternative family pension) under the ITP 2 plan for salaried employees in Sweden are covered through insurance with Alecta. According to a statement from the Swedish Financial Reporting Board UFR 3, Classification of ITP plans secured through insurance with Alecta, this is a multi-employer defined-benefit plan. For the 2014 financial year, the Company has not had access to the requisite information to allow reporting of its proportional share of the plan’s obligations, plan assets and costs, which means that it was not possible to report the plan as a defined-benefit plan. Accordingly, the ITP 2 pension plan that is secured through an insurance in Alecta is reported as a defined-contribution plan. Premiums for the defined-benefit old-age pensions and family pensions are calculated on an individual basis and are influenced by items including salary, previously earned pension entitlements and remaining period of service. Expected fees for ITP 2 insurances with Alecta for the next reporting period total SEK 26 million (24). The Group’s share of total fees under the plan and the Group’s share of the total number of active plan members amounted to 0.163% and 0.138% respectively (0.149 and 0.138 respectively).