ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

40 Board of Directors’ report
of the year. During the year, Intrum Justitia
acquired Aktiv Kapital’s Nordic’s credit
management operation as well as Nice Investment
Nordic AB, a company focusing on
purchasing overdue receivables from Swedish
mail order companies.
PARENT COMPANY
The publicly listed Parent Company, Intrum
Justitia AB (publ), owns the subsidiaries, provides
the Group’s head office functions and
handles certain Group-wide development
work as well as services and marketing.
The Parent Company reported net revenues
for the year of SEK 61.9 M (57.7) and a pre-tax
loss of SEK –339.8 M (1,116.7).
Earnings include share dividends from
Group companies of SEK 211.3 M (83.5) and
write-downs of shares in subsidiaries of SEK
-462.1 M (-25.7).
The Parent Company invested SEK 0.9
M (0.5) in fixed assets during the year and
had liquid assets amounting to SEK 138.3 M
(159.8) at year-end. The average number of
employees was 25 (25).
THE SHARE AND SHAREHOLDERS
At year-end the company had 79,994,651
outstanding shares, of which 250,000 were
repurchased and held as treasury shares. The
250,000 treasury shares represented 0.3 percent
of the total outstanding shares at yearend
or SEK 5,000 of the quota value. The
treasury shares were purchased in 2008 for
SEK 25.7 M. All shares carry equal voting
rights and an equal share in the company’s assets
and earnings.
The company’s largest shareholders at yearend
were Carnegie Funds (6.4 percent of the
share capital), Swedbank Robur Funds (4.4),
CapMan Oyi (4.3) and SEB Funds (3.4). See
also the table on page 32.
The Articles of Association do not contain
any preemption clauses or other limitations
on the transferability of the shares, and there
are no other circumstances that the company
is obliged to disclose according to the provisions
in chapter 6, paragraph 2a, sections 3-11
of the Annual Accounts Act.
BOARD WORK
According to Intrum Justitia’s Articles of Association,
the Board of Directors shall consist of no
less than five and no more than nine members
with no more than four deputies. All members
are elected by the Annual General Meeting.
In 2010 the Board held 11 meetings (12 the
previous year).
For a description of the Board’s work, please
refer to the Corporate Governance Report on
pages 82 – 87. The Corporate Governance Report
is also available on the Group’s website,
www.intrum.com.
THE BOARD Of DIRECTOR’S
PROPOSAL REGARDING PRINCIPLES fOR
REMUNERATION AND OTHER TERMS Of
EMPLOYMENT fOR SENIOR EXECUTIVES
The 2010 Annual General Meeting resolved
to adopt remuneration principles for senior
executives and these are summarized in
Note 31. The Board proposes the following
guidelines for resolution by the 2011 Annual
General Meeting:
The Board proposes that the guidelines
be approved by the Annual General Meeting
and that they be applied during the period
until the 2012 Annual General Meeting.
The guidelines apply to the President
and the members of Intrum Justitia’s Group
Management Team. The proposal has been
prepared by the Board and its Remuneration
Committee.
Intrum Justitia’s success depends upon
the commitment and professionalism of its
staff. Total remuneration shall be competitive
within each market where Intrum Justitia
operates to attract, motivate and retain
highly skilled employees. Individual remuneration
levels shall be based on experience,
competence, responsibility and performance.
Total remuneration is based on four main
components: base salary, short- and longterm
variable salary programs and pension
benefits. Other benefits, such as a company
car, may also be offered.
The base salary depends on the complexity
of the work and the individual’s performance,
experience and competence. Variable
remuneration is subject to a predetermined
ceiling. Moreover, the balance between
short- and long-term variable salary programs
shall be such that the former may not
constitute more than 50 percent of the total
outcome of outstanding variable salary programs
in any given year. Deviations exist in
the case of a few older employment contracts.
Short-term variable salary
Short-term variable salary is determined
one year at a time and is conditional on the
achievement of certain pre-set targets. Such
targets may be individual and general, as well
as qualitative and quantitative. The targets are
to be agreed in writing. Examples of targets
include profitability-based and discretionarybased
targets related to the ongoing strategic
transformation.
The one-year variable salary component
helps to reduce the share of fixed costs and
focuses efforts on areas of operations that the
Board wishes to prioritize.
Short term variable salary may not exceed 50
percent of fixed base salary. Deviations exist in
the case of a few older employment contracts.
The maximum cost for Intrum Justitia’s variable
salary programs for the President and other
current senior executives for 2011 is estimated
to SEK 13 M, excluding social security expenses.
Long-term variable salary
The goal of Intrum Justitia’s long-term variable
salary programs is to encourage participants,
whose efforts are deemed to have a direct impact
on the company’s results, profitability and
value growth, to improve their performance, by
aligning their long-term interests and perspective
with those of shareholders. The aim is also
to create a long-term commitment to Intrum
Justitia, to reinforce a holistic view of the company
and to offer participants an opportunity
to share in Intrum Justitia’s long-term success
and value creation. A further goal is to reduce
the proportion of fixed costs.
Long-term variable salary programs are to
be performance-based. The estimated value at
the time of implementation of the programs
shall be limited to a certain proportion of the
participant’s current fixed base salary; 150 percent
for the President and 50 percent for other
members of the Group Management Team.
Other
New pension plans shall be premium-based
with the pensionable portion of the individual’s
salary being capped.
In the event of termination by the company,
a maximum of 12 months’ severance
pay shall apply. Deviations exist in the case of
a few existing employment contracts.
The Board of Directors shall have the right
to depart from the established principles if
there is particular justification for doing so in
individual cases.