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Amounts in SEKm unless otherwise stated
Note 25 Employees and payroll costs
The average number of employees in 2001 was 87,139 (87,128), of whom 59,123 (58,962) were men and 28,016 (28,166) were women.
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Group |
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| 2001 | 2000 | 1999 | |
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| Number of employees by geographical area | |||
| Europe | 46,899 | 49,671 | 52,032 |
| North America | 21,294 | 22,879 | 23,174 |
| Rest of the world | 18,946 | 14,578 | 17,710 |
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| Total | 87,139 | 87,128 | 92,916 |
| 2001
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2000
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1999
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Salaries, other remuneration and employer contributions |
Salaries and remuner- |
Employer
contri- |
Salaries and remuner- |
Employer contri- |
Salaries and remuner- |
Employer contri- |
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| Parent company | 1,046 | 462 | 1,143 | 509 | 1,155 | 604 |
| (of which pension costs) | (149) 1) | (121) 1) | (116) | |||
| Subsidiaries | 19,284 | 6,021 | 16,098 | 4,349 | 16,657 | 4,714 |
| (of which pension costs) | (354) | (331) | (429) | |||
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| Group total | 20,330 | 6,483 | 17,241 | 4,858 | 17,812 | 5,318 |
| (of which pension costs) | (503) | (452) | (545) | |||
1) Of which SEK 22m (6) refers to pension costs for the current company President and his predecessors. |
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| 2001
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2000
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1999
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Salaries and remuneration for Board members, Presidents and other employees, by geographical area |
Boards and
Pres- |
Other
emplo- |
Boards and Pres- |
Other emplo- |
Boards and Pres- |
Other emplo- |
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| Sweden | ||||||
| Parent company | 12 | 1,034 | 14 | 1,129 | 19 | 1,136 |
| Other | 18 | 908 | 22 | 882 | 31 | 963 |
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| Total Sweden | 30 | 1,942 | 36 | 2,011 | 50 | 2,099 |
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| EU excluding Sweden | 135 | 8,786 | 134 | 8,355 | 151 | 8,622 |
| Rest of Europe | 44 | 999 | 40 | 870 | 41 | 899 |
| North America | 55 | 6,451 | 63 | 4,802 | 74 | 4,971 |
| Latin America | 24 | 449 | 24 | 478 | 22 | 461 |
| Asia | 32 | 426 | 26 | 304 | 29 | 276 |
| Africa | 2 | 33 | 2 | 29 | 1 | 42 |
| Oceania | 5 | 917 | 3 | 64 | 4 | 70 |
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| Total outside Sweden | 297 | 18,061 | 292 | 14,902 | 322 | 15,341 |
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| Group total | 327 | 20,003 | 328 | 16,913 | 372 | 17,440 |
Remuneration, etc. to the Chairman of the Board, the President, other members of senior Group management and auditors
In accordance with the decision by the Annual General Meeting, fees were paid to the Board of Directors amounting to SEK 2,800,000. Of the total amount, SEK 75,000 was set aside for committee work, SEK 1,000,000 was paid to the Chairman, SEK 350,000 to the Deputy Chairman and SEK 275,000 to each of the other members who are not employed by the Group.The Board has decided that the SEK 75,000 set aside for committee work will not be distributed.
| Remuneration to the President 1997– 2001 | |||
| SEK |
Base |
Variable |
Total |
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| 1997 | 6,600,000 | 1,350,000 | 7,950,000 |
| 1998 | 6,600,000 | 3,852,000 | 10,452,000 |
| 1999 | 6,600,000 | 4,009,850 | 10,609,850 |
| 2000 | 6,600,000 | 2,621,000 | 9,221,000 |
| 2001 | 9,000,000 | 0 | 9,000,000 |
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The President’s variable salary is based on the principles used within the Group to reward value creation, and increases at a linear rate above a certain level. No variable salary was paid during 2001.
The President has received 60,000 options under the 2001 option program, and 135,000 options under previous years’ option programs.
The retirement age for the President is 60.The President is covered by the ITP plan, and in addition is entitled to a lifetime supplementary pension calculated on the base salary at the time of retirement, plus an average of the variable salary for the last three years.The supplementary pension consists of 32.5% of the portion of salary that corresponds to 20–30 base amounts according to the Swedish National Insurance Act, 50% of the portion corresponding to 30–100 base amounts, and 32.5% of the portion exceeding 100 base amounts. Between the ages of 60 and 65, an additional pension will be paid amounting to 5% of the salary as of the date of retirement, maximized to 30 times the base amount.The total pension payment thus amounts to approximately SEK 4–4.5m annually from age 60 onward. Pension rights from previous employment are included in the above.
There is no agreement for special severance pay.
The members of Group management employed in Sweden participate in the same pension plans as other members of management at lower levels in Swedish companies. The pensionable age is age 65. For members of Group management employed outside Sweden, different pension terms apply according to the country of employment, with the right to receive pensions at 60 years of age at the earliest. There are no agreements for special severance pay.
The total capital value of pension commitments referring to the current President, his predecessors and their survivors amount to SEK 123m (105).
Fees in 2001 to KPMG, which performs virtually all external auditing within the Group, amounted to SEK 31m referring to audits, and SEK 27m referring to various types of consultancy for the Group. Audit fees to other audit firms amounted to SEK 4m.
Option programs
1998–2000 option programs
In 1998, an annual program for employee stock options was introduced for approximately 100 senior managers. Options were allotted on the basis of value created according to the Group’s model for value creation. If no value was created, no options were issued.
The maturity period of the options was 5 years. The options were not eligible for exercise for 12 months following the date of allotment. The options can be used to purchase Electrolux B-shares at a strike price, which is 15% higher than the average closing price of the Electrolux B-shares on the Stockholm Exchange during a limited period prior to allotment.
The total number of options outstanding under the 1998 program is 694,300 and the strike price is SEK 170.A provision of SEK 39m (48), including employer contributions has been made for the 1998 program. The total number of options outstanding under the 1999 program is 1,285,900 and the strike price is SEK 216. A provision of SEK 90m (101), including employer contributions has been made for the 1999 program.
The total number of options outstanding under the 2000 program is 595,800 and the strike price is SEK 170. A provision of SEK 75m (80), including employer contributions has been made for the 2000 program.
2001 option program
Electrolux introduced a new employee stock option program in 2001. Under the 2001 stock option program, 2,460,000 options are outstanding and were allotted to less than 200 senior managers in lots of 15,000 options. The President was granted 4 lots, members of Group Management 2 lots and all other managers 1 lot. The options were allotted free of charge to participants, with a maturity period of seven years. The strike price is SEK 177, which was 10% above the average closing price of the Electrolux B-shares on the Stockholm Exchange during a limited period prior to allotment.
2002 option program
The Board has approved a proposal for a stock option program in 2002 submitted by the Remuneration Committee. A maximum of 3,000,000 options will be allotted for up to 200 senior managers. The 2002 program is based on the above mentioned parameters in the 2001 program including the number of options per lot.
Hedging arrangements for the 1998–2002 option programs
In order to meet the company’s obligations under the 1998 and 1999 stock option programs, the Annual General Meeting in 2000 approved a proposal by the Board to use 2,814,300 repurchased Electrolux B-shares for this purpose. Similarly, authorization was given at the Annual General Meeting in 2001 to sell up to 3,000,000 repurchased shares to meet the obligations under the 2001 stock option program. In the same format, the Board will present a proposal at the 2002 Annual General Meeting to sell up to 3,595,800 shares to satisfy the obligations under the 2000 and 2002 stock options programs.
Assuming that all stock options allotted under the 2002 program are exercised, a sale of previously repurchased shares will result in a dilution of 1.0%. Provided that the Board’s proposal to hedge the 2000 and 2002 programs is accepted at the Annual General Meeting, and assuming that all options outstanding under the program of 1998 up to and including the 2001 program are exercised, the maximum dilution would be 1.5%.
Synthetic options 2000
The Board granted Wolfgang König, the Head of white goods outside North America, 118,400 synthetic employee stock options with the right to receive a cash amount for each option when exercised, calculated as the difference between the current share price and the strike price of SEK 147. The options may be exercised until July 1, 2006. The options have been allotted without consideration and as compensation for lost options with his former employer immediately before joining the Electrolux Group. This program is hedged with an equity swap. The cost is SEK 0.9m.
Synthetic options 1993
Of the approximately 150 senior managers who were offered synthetic options in 1993, 112 exercised the right to subscribe to these options in January, 1994. The options were priced according to prevailing market conditions at SEK 35. The strike price was SEK 81, and the options matured on January 10, 2002.
A total of 2,530,000 options were issued, after adjustment for a stock split of 5:1 in 1998. The value of the options was indexed to the Electrolux share price. The options could not be used for purchase of the company’s shares, but only redeemed in cash by the company.
The change in the value of these synthetic options is included in the annual Electrolux income statement. At year-end the total provision was SEK 6m (50), and net income for the year has been credited with SEK 21m (1).
At year-end 2001 there were 4 (16) owners remaining with total holdings of 72,610 (383,355) options. Before the expiration of the term, all remaining options were exercised.
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