Annual Report 2010

Remuneration principles

2. Remuneration principles

2.1 The Company’s compensation philosophy

The Company’s compensation philosophy seeks to recognise and reward performance. Taking into consideration Group and business unit contributions as well as individual contributions, the programmes are designed to attract, retain, motivate, and reward employees in order to achieve the Company’s financial and strategic objectives and also to ensure that the total compensation opportunity is internally consistent and externally competitive.

It is the Company’s aim to align its compensation philosophy with the shareholders’ interests and to foster collaboration between countries, units and departments. The compensation should be fair and competitive and therefore the base salaries are aligned at a median level. The Company strives to recognise and reward team performance. Thus, as a general rule, individual quantitative targets are not used for bonus purposes in the current compensation programmes. Economic Value Added targets, defined in line with the Company’s strategic long-term projections, are used for the short-term bonuses. In addition, for members of the Executive Committee and selected next level managers, long-term incentives have been introduced to increase the focus on long-term objectives.