Scania Annual Report 2011

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142 proposed guidelines for salary and other remuneration Proposed guidelines for salary and other remuneration of the President and CEO as well as other executive officers The Board of Directors proposes that the AGM approve the following: Background The proposed principles have mainly been used since 1997. The motiv e for their introduction was to be able to offer employees a market-related remuneration package that will enable the company to recruit and retain executive officers. The proposal of the Board of Directors to the Annual General Meeting stated below is, in all essential respects, consistent with the principles for the remuneration that executive officers have received in prior years and is based on existing employment agreements between Scania and each respective executive officer. Preparation of remuneration issues is handled as follows. With regard to the President and CEO, the Remuneration Committee of the Board of Directors proposes a fixed salary, criteria for variable remuneration and other employment conditions, which are then adopted by the Board of Directors. For other Executive Board members, the President and CEO proposes the equivalent employment conditions, which are then adopted by the Remuneration Committee of the Board of Directors and reported to the Board − all in compliance with the remuneration principles approved by the Annual General Meeting (AGM). Incentive programmes for executive officers are decided by the AGM. Proposal Scania shall endeavour to offer competitive overall remuneration that will enable the company to recruit and retain executive officers. Remuneration to executive officers shall consist of fixed salary, variable remuneration in the form of the Scania Incentive Programme, pension and other remuneration. Total remuneration shall take into account the individual’s performance, areas of responsibility and experience. The fixed salary for the President and CEO as well as for the members of the Executive Board can be re-assessed on a yearly basis. Variable salary shall be dependent on Scania’s earnings and consist of an incentive programme that is divided into two parts. The outcome shall be calculated on the basis of operating return, defined as Scania Group net income after subtracting the cost of equity, Residual Net Incom e (RNI), and be adopted by the Board’s Remuneration Committe e. Part 1 of the incentive programme shall be related to the actual ability to generate a return during the year in question, all pro vided that RNI is positive, and shall be determined as a cash amount that may vary between 0−150 percent of fixed salary. Part 2 of the incentive programme shall be related to Scania’s ability to increase RNI from one year to another, and the outcome shall be determined as a cash amount that may vary between 0−80 percent of fixed salary. In order to promote a personal holding of shares in the company, the programme shall be designed so that a part of the annual total outcome, after deduction of applicable tax, is used by the employee for the purchase of Scania B shares at market price. The Board’s proposal for the incentive programme will be stated in its entirety in a complete proposal to the AGM. The President and CEO as well as the members of the Executive Board may be covered by a defined contribution pension system in addition to the public pension and the ITP occupational pension. In addition to the above mentioned pension principle, the President and CEO can, after decision by the Board, be covered by an extra annual pension provision. The retirement age of the President and CEO as well as other executive officers shall be no lower than age 60. Other remuneration and benefits shall be competitive and help facilitate the executive officer’s ability to fulfil his or her duties. Members of the Executive Board, are entitled to severance pay equivalent to a maximum of 18 months’ salary, in addition to their salar y during the six-month notice period, if the company terminates their employment. If they obtain new employment within 18 months, counting from their termination date, the severance pay ceases. If a member of the Executive Board resigns of his own volition, he is entitled to his salary for a six-month period. Otherwise there shall be no notice periods longer than six months. According to his existing employment contract, the President and CEO is entitled to his salary for a six-month period if he resigns of his own volition. The applicable outcome of variable remuneration shall be proportional to the length of his period of employment during the year in question. In case of termination by the company, the President and CEO shall be entitled to his fixed salary in an unchanged amount per year during the remaining time of his employment contract, plus annual compensation equivalent to the average of variable remuneration for the previous three years. Other members of the Executive Board, with employment contracts entered into before 1 July 2010, are entitled to severance pay equivalent to a maximum of 24 months’ salary in addition to their salary during the six months notice period, if the company terminates their employment. The Board of Directors shall be able to diverge from these guidelines, should there be specific circumstances in an individual case. Guidelines approved by the 2011 AGM The guidelines for salary and other remuneration of the President and CEO as well as other executive officers that were approved by the 2011 Annual General Meeting, plus the outcome of these guidelines related to 2011, are presented in Note 28. Report of the directors Scania 2011
Proposed distribution of earnings 143 Proposed distribution of earnings The Board of Directors proposes that the following earnings at the disposal of the Annual General Meeting: Amounts in SEK m. Retained earnings 9,281 Net income for the year 4,001 Other comprehensive income for the year 0 Total 13,282 After implementing the proposed distribution of earnings, the equity of the Parent Company, Scania AB, is as follows: Amounts in SEK m. Share capital 2,000 Statutory reserve 1,120 Retained earnings 9,282 Total 12,402 Shall be distributed as follows: To the shareholders, a dividend of SEK 5.00 per share 4,000 To be carried forward 9,282 Total 13,282 The undersigned certify that the consolidated accounts and the annual accounts have been prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted for use in the European Union, and generally accepted accounting principles respectively, and give a true and fair view of the financial positions and results of the Group and the Parent Company, and that the Report of the Directors for the Group and the Parent Company gives a true and fair review of the development of the operations, financial positions and results of the Group and the Parent Compan y and describes substantial risks and uncertainties faced by the companies in the Group. The annual accounts and the consolidated financial statements were approved for issuance by the Board of Directors on 9 February 2012. The consolidated income statement and balance sheet and the Parent Company income statement and balance sheet will be subject to adoption by the Annual General Meeting on 4 May 2012. Södertälje, 9 February 2012 Martin Winterkorn Chairman of the Board Jochem Heizmann Vice Chairman Helmut Aurenz Board member Åsa Thunman Board member Börje Ekholm Board member Francisco J. Garcia Sanz Board member Gunnar Larsson Board member Hans Dieter Pötsch Board member Peter Wallenberg Jr Board member Johan Järvklo Board member Employee representative Håkan Thurfjell Board member Employee representative Leif Östling Board member President and CEO Our Audit Report was submitted on 10 February 2012 Ernst & Young AB Lars Träff Authorised Public Accountant Report of the directors Scania 2011
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ANNUAL REPORT 2011
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1 Operations 2-31 Statement of the
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SCANIA’S STRATEGY 3 Our solution
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The world of Scania Scania is a glo
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scania’s strategY 7 Scania’s st
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SCANIA’S STRATEGY 9 The change in
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SCANIA’S STRATEGY 11 The aluminiu
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SCANIA’S STRATEGY 13 Profitable b
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SCANIA’S STRATEGY 15 Component mo
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SCANIA’S STRATEGY 17 Methods for
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SCANIA’S STRATEGY 19 Scania is st
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market - TRUCKS 21 Effective overal
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23 assembles the bodies for the Sca
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100 years of innovation In 2011, Sc
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27 Productivity and energy efficien
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SCANIA’S STRATEGY 29 service tech
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SCANIA’S STRATEGY 31 Experience s
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34 MARKET Lastbilar nettoomsättnin
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36 production
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38 production Greater flexibility w
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40 RESEARCH AND DEVELOPMENT
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42 RESEARCH AND DEVELOPMENT Scania
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44 SCANIA’S SUSTAINABILITY WORK R
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46 SCANIA’S SUSTAINABILITY WORK K
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48 SCANIA’S SUSTAINABILITY WORK S
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50 SCANIA’S SUSTAINABILITY WORK S
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52 SCANIA’S SUSTAINABILITY WORK C
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54 SCANIA’S SUSTAINABILITY WORK M
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56 Scania share data Scania share d
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58 Annual General Meeting and Finan
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60 Risks and risk management servic
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62 Risks and risk management Produc
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64 CORPORATE GOVERNANCE REPORT owne
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66 CORPORATE GOVERNANCE REPORT The
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68 CORPORATE GOVERNANCE REPORT by t
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70 BOARD OF DIRECTORS Board of Dire
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72 EXECUTIVE BOARD AND CORPORATE UN
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financial reports Amounts in tables
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76 group financial review Group fin
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78 group financial review During 20
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80 consolidated income statements C
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82 consolidated balance sheets Cons
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84 Consolidated statement of change
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86 notes to the consolidated financ
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Page 146 and 147: 144 audit report Audit Report TRANS
Page 148 and 149: 146 quarterly data Quarterly data,
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Page 156: Scania AB (publ), SE-151 87 Södert
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Scania Annual Report 2011

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