Annual report 2008 - Munters

Board of Directors’ report
45
years. Europe has a high proportion of MCS personnel, which
is traditionally a highly mobile personnel category. Asia consists
of several young companies with a large share of production
where personnel mobility is still relatively high. Munters is in
large part a young company. A full 52 percent of the workforce
is under 40. The average age is 40 years (38).
Significant risks and uncertainties
Munters’ exposure to risk can be divided primarily into two
categories: operational risks and financial risks. Operational
risks are those due to weather, dependence on key personnel
and key customers, and geographically dispersed operations
involving small operational units. Financial risks consist
mainly of currency, interest and financing risks.
Demand for the company’s products is affected by general
economic trends. The weakened economic conditions resulted
in lower sales, which also reduced capacity utilization in
manufacturing over the short term. The continuing trend in
the global economy is an uncertainty factor for the earnings
trend for 2009. Munters’ acquisition frequency may result in
integration-related risks. In addition, it is estimated that the
financial risks, primarily interest-rate risks and currency risks,
have increased somewhat in the current and past year.
A more detailed description of the business’s operational
and financial risks and how they are controlled and managed
is presented in the section Risks and risk management on
pages 32–33 and in Note 3.
The Munters share and ownership structure
The Munters share is listed on the NASDAQ OMX Nordic
Exchange Stockholm. On December 31, 2008, Munters’ share
capital was distributed among 75,000,000 shares. The company
has one class of stock. Each share carries one vote without
restrictions at the Annual General Meeting. All shares carry
equal rights to the company’s assets and earnings. There are no
restrictions on transfer of shares according to law or the company’s
Articles of Association. As far as Group management
and the Board of Directors are aware, there are no agreements
between shareholders that may entail restrictions on the right
to transfer shares.
In order to meet obligations for the outstanding options program,
the company holds 1,066,950 treasury shares. Holdings of
treasury shares comprise 1.4 percent of the total share capital.
On December 31, 2008, the ten largest owners in Munters
controlled 66 percent (60) of the voting rights. The two largest
owners are Latour and Industrivärden, which each control 14.8
percent of the voting rights. No other shareholder controls
directly or indirectly more than 10 percent of the voting rights.
Members and deputy members of the Board of Directors
are elected at the Annual General Meeting for the period
until the end of the first general meeting held after the year
the member was elected. Changes in the Articles of Association
are decided by the Annual General Meeting.
The Board of Directors’ proposal for approval of
guidelines for compensation to senior executives
The Board of Directors of Munters AB proposes that the
Annual General Meeting on April 15, 2009 approve guidelines
for compensation to senior managers in the company according
to the following.
Salaries for senior managers shall be competitive and on market
terms and have other terms of employment that correspond to
the manager’s responsibility, authority, expertise and experience.
Reconciliation of total compensation against market statistics
and other information shall be performed regularly.
In addition to a fixed annual salary, senior managers
may also receive a variable salary, which will be based on the
Group’s earnings per share, cash flow, strategic development
or other parameters for the President and for other managers
on improvements in the manager’s area of responsibility with
respect to sales, operating earnings and capital turnover rate, as
well as the outcome of individual activity plans or other parameters.
The variable salary component shall correspond to at
most 50 percent of the fixed annual salary for the President and
at most between 30 and 70 percent for other senior managers.
The Board of Directors is also entitled to resolve on programs
relating to long-term variable salary, subject to the condition
that the outcome of such a program corresponds to at most 50
percent of fixed annual salary.
The company may subsidize or compensate interest expenses
for senior managers’ acquisition of shares for which the manager
assumes all risk.
The notice period between senior managers and the company
shall not be longer than six months, and severance pay shall not
amount to more than 18 months (base salary) for the President
and 12 months (base salary) for other senior managers.
Pension entitlement shall apply from the age of 62 at the
earliest. The President is covered by a premium-based pension
plan according to which the premium may amount to at most
35 percent of the base salary. Other senior managers residing
in Sweden are covered by a premium-based plan coordinated
with the ITP plan, where the agreed premium provision may
amount to at most 35 percent of base salary. Senior managers
not residing in Sweden may be offered pension plans that are
competitive in the countries where they reside.
Each year, the Board of Directors shall consider whether
or not share-related incentive programs shall be proposed to
the Annual General Meeting. Share-related incentive programs
that are not approved by the Annual General meeting
are not allowed.
Fees for Board members are established by the Annual
General Meeting. If a Board member is employed by the
company, compensation shall be paid to the Board member
according to these guidelines, whereby special compensation
for the assignment as a Board member shall not be paid. If a
Board member performs assignments for the company that
are not Board assignments, compensation shall be paid on
market terms with consideration taken to the nature of the
assignment and the work involved.
These guidelines shall apply to those persons who during
the period in which the guidelines apply are members of Group
management, other managers in senior positions who report
directly to the President and Board members of the company.
The guidelines apply for contracts entered after the closing of
the Annual General Meeting and in cases in which changes are
made in existing contracts after that date. The Board of Directors
shall have the right to deviate from these guidelines if there
are special reasons in an individual case, subject to the condition
that this decision is reported and motivated at a later date.
The most recently approved guidelines are presented in
Note 28.
Munters Annual Report 2008