Employees, salaries, and social security expenses
Acquired operations in 2008 added 1,116 employees, of which in Nepal 416, in Norway 412 and in Cambodia 172. In the existing operations, efficiency measures in Sweden and Finland offset recruitments mainly in Eurasia to handle the growth in customer base, resulting in a net decrease of the number of employees by 237. Hence, the total change during 2008 was an increase by 879 employees to 32,171 at year-end (31,292 at year-end 2007).
The average number of full-time employees by country was as follows.
|
|
January–December | |||
|---|---|---|---|---|
|
|
2008 | 2007 | ||
| Country |
Total (number) |
of whom men (%) |
Total (number) |
of whom men (%) |
| Sweden | 10,152 | 52.1 | 10,002 | 54.2 |
| Finland | 5,258 | 59.9 | 5,697 | 59.0 |
| Norway | 1,245 | 67.9 | 945 | 69.7 |
| Denmark | 1,736 | 65.5 | 1,559 | 66.6 |
| Lithuania | 3,694 | 51.6 | 3,672 | 52.1 |
| Latvia | 1,064 | 47.6 | 1,010 | 57.1 |
| Estonia | 2,310 | 58.8 | 2,322 | 56.8 |
| Spain | 79 | 70.9 | 72 | 65.3 |
| Kazakhstan | 1,483 | 40.6 | 1,278 | 45.9 |
| Azerbaijan | 622 | 43.1 | 613 | 46.3 |
| Uzbekistan | 806 | 64.0 | 358 | 64.8 |
| Tajikistan | 605 | 64.8 | 255 | 49.4 |
| Georgia | 275 | 49.1 | 227 | 49.3 |
| Moldova | 313 | 47.0 | 293 | 45.1 |
| Nepal | 92 | 54.0 | – | – |
| Cambodia | 44 | 67.6 | – | – |
| Russian Federation | 56 | 62.5 | 60 | 63.3 |
| United Kingdom | 45 | 64.4 | 51 | 74.5 |
| Other countries | 158 | 73.0 | 147 | 72.8 |
| Total | 30,037 | 55.9 | 28,561 | 56.0 |
In total, operations in 2008 and 2007 were conducted in 32 and 28 countries, respectively.
The share of female and male Senior executives was as follows. Senior executives include ordinary members of boards of directors, presidents and other members of executive management teams at the corporate level, business area level and company level.
|
|
December 31, | |||
|---|---|---|---|---|
|
|
2008 | 2007 | ||
| Percent |
Boards of directors |
Other Senior executives |
Boards of directors |
Other Senior executives |
| Women | 19.2 | 32.1 | 22.9 | 23.4 |
| Men | 80.8 | 67.9 | 77.1 | 76.6 |
| Total | 100.0 | 100.0 | 100.0 | 100.0 |
Total salaries and other remuneration, along with social security expenses and other personnel expenses, were as follows.
|
|
January–December | |
|---|---|---|
| SEK millions | 2008 | 2007 |
| Salaries and other remuneration | 11,011 | 9,632 |
| Social security expenses |
|
|
| Employer's social security contributions | 2,134 | 1,971 |
| Pension expenses | 1,172 | 1,221 |
| Total social security expenses | 3,306 | 3,192 |
| Capitalized work by employees | -360 | -208 |
| Other personnel expenses | 1,099 | 861 |
| Total personnel expenses recognized by nature | 15,056 | 13,477 |
Salaries and other remuneration were divided between Senior executives and other employees as follows. Variable pay was expensed in the respective year, but disbursed in the following year.
|
|
January–December | |||
|---|---|---|---|---|
|
|
2008 | 2007 | ||
| SEK in millions | Senior executives (of which variable pay) |
Other employees |
Senior executives (of which
variable pay) |
Other employees |
| Salaries and other remuneration | 155 (27) | 10,856 | 179 (30) | 9,453 |
Pension expenses for all Senior executives totaled SEK 25 million in 2008 and SEK 36 million in 2007.
Remuneration to corporate officers
Principles
As resolved by the 2008 Annual General Meeting of shareholders in TeliaSonera AB, annual remuneration is paid to the members of the Board of Directors in the amount of SEK 1,000,000 (2007 AGM: SEK 900,000) to the chairman and SEK 425,000 (SEK 400,000) to each of the other directors, elected by the Annual General Meeting. In addition, annual remuneration is paid to the chairman of the Board's Audit Committee in the amount of SEK 150,000 and SEK 100,000 to each of the other members of the Audit Committee. Additional annual remuneration is also paid to the chairman of the Board's Remuneration Committee in the amount of SEK 40,000 and SEK 20,000 to each of the other members of the Remuneration Committee. No separate remuneration is paid to directors for other committee work. Directors appointed as employee representatives are not remunerated. There are no pension benefit arrangements for external directors.
Remuneration to the Chief Executive Officer (CEO), the Executive Vice President (EVP) and other members of the Leadership Team consists of base salary, annual variable pay, certain taxable benefits and pension benefits. As of December 31, 2008, TeliaSonera had no share-related incentive program. “Other members of the Leadership Team” refers to the 7 individuals who are directly reporting to the CEO and which, along with the CEO and the EVP, constituted the TeliaSonera Leadership Team on December 31, 2008.
Annual variable pay to the CEO, EVP and to the other members of the Leadership Team is capped at 50 percent of the base salary. Variable pay is based on the financial performance of the Group, financial performance in each officer's area of responsibility and individual performance objectives.
Pension benefits and other benefits to the CEO, the EVP and other members of the Leadership Team as described above form part of each individual's total remuneration package.
Remuneration and other benefits during the year, capital value of pension commitments
| SEK |
Board remuneration/ Base salary |
Variable pay | Other remuneration |
Other benefits |
Pension expense |
Total remuneration and benefits |
Capital value of pension commitment |
|---|---|---|---|---|---|---|---|
| Board of Directors |
|
|
|
|
|
|
|
| Tom von Weymarn, chairman | 1,090,000 | – | – | – | – | 1,090,000 | – |
| Maija-Liisa Friman | 493,750 | – | – | – | – | 493,750 | – |
| Conny Karlsson | 458,750 | – | – | – | – | 458,750 | – |
| Lars G Nordström | 438,750 | – | – | – | – | 438,750 | – |
| Timo Peltola | 438,750 | – | – | – | – | 438,750 | – |
| Jon Risfelt | 518,750 | – | – | – | – | 518,750 | – |
| Caroline Sundewall | 568,750 | – | – | – | – | 568,750 | – |
| Leadership Team |
|
|
|
|
|
|
|
| Lars Nyberg, CEO | 8,160,000 | 3,100,800 | – | 147,394 | 8,356,200 | 19,764,394 | – |
| Per-Arne Blomquist, EVP | 1,533,340 | 766,667 | – | 166,001 | 582,733 | 3,048,741 | 158,847 |
| Other members of the Leadership Team (7 individuals) | 17,593,685 | 6,436,949 | 646,929 | 2,725,517 | 6,128,149 | 33,531,229 | 32,744,285 |
| Former CEOs, EVPs |
|
|
|
|
|
|
|
| Anders Igel | – | – | – | – | 664,683 | 664,683 | 44,243,695 |
| Marianne Nivert | – | – | – | – | – | – | 35,237,011 |
| Jan-Åke Kark | – | – | – | – | – | – | 35,284,107 |
| Stig-Arne Larsson | – | – | – | – | – | – | 25,483,109 |
| Lars Berg | – | – | – | – | – | – | 20,962,033 |
| Tony Hagström | – | – | – | – | – | – | 8,329,443 |
| Kim Ignatius | 2,420,831 | 677,833 | 462,313 | 93,159 | 1,269,035 | 4,923,171 | 10,514,054 |
| Total | 33,715,356 | 10,982,249 | 1,109,242 | 3,132,071 | 17,000,800 | 65,939,718 | 212,956,584 |
Comments on the table:
- Board remuneration includes remuneration for Audit Committee and Remuneration Committee work. Remuneration is paid monthly.
- The EVP assumed his position on September 1, 2008. On a full-year basis, the base salary in 2008 was SEK 4,600,000. The capital value of pension commitment for the EVP refers to his previous employment in the Group.
- Variable pay was expensed in 2008, but will be settled in cash in 2009. Actual variable pay for 2008 corresponds to 38 percent of the base salary for the CEO, to 50 percent for the EVP and for other members of the Leadership Team to 32–40 percent of the base salary. Variable pay with respect to performance in 2007 was paid in 2008 to the CEO in an amount of SEK 1,333,333, to the former EVP in an amount of SEK 1,066,500 and to other members of the current Leadership Team in an amount of SEK 2,633,988.
- Other remuneration includes cash settlement for unused vacation days.
- Other benefits refer chiefly to company car but also to a number of other taxable benefits. One other member of the Leadership Team is entitled to housing allowance and school fee. In the absence of a long term variable pay scheme, the EVP and one other member of the Leadership Team are compensated by way of an annual fixed amount, which is included in the total amount of Other benefits. The compensation will be discontinued if and when a potential award from a long term variable pay scheme is introduced.
- Pension expense refers to the expense that affected earnings for the year. See further disclosures concerning the terms and conditions of pension benefits below.
Pension benefits
TeliaSonera operates both defined benefit executive schemes and defined contribution executive schemes. A defined benefit scheme provides a pension level which is pre-determined as a percentage of the pensionable salary at retirement. A defined contribution scheme provides a contribution to the pension scheme as a percentage of the pensionable salary. The level of pension benefits at retirement will be determined by the contributions paid and the return on investments and the costs associated to the plan. As from July 2006, the defined benefit executive scheme is closed for new entrants in the Group and only defined contribution executive schemes are offered.
CEO and EVP
For the CEO, the pension plan provides a defined contribution arrangement which is two-fold. One part is providing a base-salary related contribution of 4.5 percent of the salary up to 7.5 income base amounts and 30 percent of such salary above 7.5 income base amounts. The income base amount is determined annually by the Swedish Government and was SEK 48,000 for 2008. The second part is a fixed annual contribution of SEK 6,000,000. For the EVP, the pension agreement is the same as for the CEO apart from the fixed contribution. For the EVP, there is instead a 10 percent additional contribution of the base salary. The contributions into the plan are vesting immediately. The normal retirement age is 65, although the Company may request the CEO to enter into early retirement not earlier than from age 60 and the CEO may enter into early retirement on his own request not earlier than from age 60. Contributions to the pension scheme will cease at retirement or earlier if leaving the company for any other reason.
Other members of the Leadership Team
Other members of the Leadership Team have individual pension arrangements. Four members are covered by defined benefit schemes and three members are covered by defined contribution schemes. Two of the members covered by defined benefit schemes have a retirement age of 62 and 60, respectively. The retirement age for the remaining five members is 65. One member is covered by the Finnish statutory pension arrangement TyEL.
The defined benefit executive scheme for those two members with a retirement age lower than 65 is providing 70 percent of pensionable salary until age 65. For all members covered by the defined benefit executive scheme (not including TyEL), the old age provision from age 65 life-long is according to the ITP plan Section 2 with an additional benefit of 32.5 percent on pensionable salaries above 20 income base amounts for two of the members and 32.5 percent on pensionable salary above 30 income base amounts for one member. The pensionable salary includes base salary and variable pay for those employed prior to July 1, 2002. For those employed after July 1, 2002, only the base salary is pensionable.
The ITP Section 2 provides 10 percent of pensionable salary up to 7.5 income base amounts, 65 percent of such salary between 7.5 and 20 income base amounts and 32.5 percent of such salary between 20 and 30 income base amounts. Salaries above 30 income base amounts are not pensionable. The benefits under the plan are vested.
The defined contribution executive scheme is providing base-salary related contributions of 24.5 percent of the base salary up to 7.5 income base amounts and 50 percent of such salary above 7.5 income base amounts for two of the members. One member has contributions according to the ITP plan Section 1 of 4.5 percent on the salary up to 7.5 income base amounts and 30 percent of such salary above 7.5 income base amounts based on both base salary and variable pay. This member has also an additional contribution corresponding to 15 percent of the base salary. All contributions to the schemes are vesting immediately.
Severance pay and change of control
Termination of the CEO's employment by the Company or by the CEO requires that notice is given by either party in writing 6 months before termination. Should a termination of employment be initiated by the Company before the CEO has turned the age of 60, the CEO is entitled to a severance pay in the amount of two annual base salaries to be paid in 24 equal monthly installments. The salary during the notice period and the severance pay will be reduced by any other income. Should the CEO give notice of termination, he is not entitled to any severance pay. However, the CEO is entitled to a severance pay in the event of change of control in TeliaSonera, if he gives notice of termination within one month from the change of ownership. In addition, if the CEO gives notice of termination for this reason before September 3, 2009, he is entitled to a one-off contribution of SEK 6,000,000 to his pension plan by the end of the termination period.
Termination of employment in relation to the EVP and the other members of the Leadership require that notice is given in writing 6 months before termination by the employees and 12 months before termination by the Company. Should notice be given by the Company, the member is entitled to a severance pay in the amount of one annual base salary to be paid in 12 equal monthly installments. The salary during the notice period and the severance pay will be reduced by any other income. Should the member give notice of termination on his or her own initiative, he or she is not entitled to any severance pay. However, in the event of change of control in TeliaSonera, the EVP is entitled to a severance pay, should he give notice of termination within 3 months from the change of ownership.
Other members of the Leadership Team are entitled to compensation if a change of control should occur. If a buyer purchases shares in TeliaSonera and reaches not less than a 51 percent ownership and if a member continues his or her employment for more than 30 days from the change of ownership and has not given notice of resignation, compensation equivalent to 12 months base salary will be paid.
Planning and decision process
Applying the remuneration policy adopted at the Annual General Meeting each year, the CEO's total remuneration package is decided by the Board of Directors based on the recommendation of its Remuneration Committee. Total remuneration packages to other members of the Leadership Team are approved by the Remuneration Committee, based on the CEO's recommendation.