The current guidelines for determining remuneration for senior executives (below the "Executives"), as well as directors of the Board to the extent they are remunerated outside their directorship, were adopted at the Annual General Meeting on 14 May 2013.
GUIDELINES FOR REMUNERATION TO SENIOR EXECUTIVES
The objective of the guidelines is to ensure that CDON Group can attract, motivate and retain the Executives, within the context of CDON Group's peer group, which consists of Nordic online and off-line retailing companies. The remuneration shall be based on conditions that are market competitive and at the same time aligned with shareholders' interests. Remuneration to the Executives shall consist of a fixed and variable salary paid in cash, as well as the possibility of participation in long-term equity based incentive programmes, customary benefits and pension schemes. These components shall create a well-balanced remuneration reflecting individual performance and responsibility, both short-term and long-term, as well as CDON Group's overall performance.
The Executives' fixed salary shall be competitive and based on the individual Executive's responsibilities and performance.
The Executives may receive variable salary and remuneration in addition to fixed salaries. The variable salary will generally not exceed a maximum of 75 per cent of the fixed annual salary. Variable salary and remuneration shall be based on the performance of the Executives in relation to established goals and targets.
CDON Group provides other benefits to the Executives in accordance with local practice. Other benefits can include, for example, a company car and company health care. Occasionally, housing allowance could be granted for a defined period.
The Executives shall be entitled to pension commitments based on those that are customary in the country in which they are employed. Pension commitments will be secured through premiums paid to insurance companies. Under normal circumstances the retirement age is 65 years.
Notice of termination and severance pay
The maximum notice period in any Executive's contract is generally 12 months, however, there are exceptions allowing an 18 months notice period, during which time salary payment will continue.
Compensation to Board Members
Board Members, elected at General Meetings, may in certain cases receive a fee for services performed within their respective areas of expertise, outside of their Board duties. Compensation for these services shall be paid at market terms and be approved by the Board of Directors.
Deviations from the guidelines
In special circumstances, the Board of Directors may deviate from the above guidelines, for example additional variable remuneration in the case of exceptional performance. In such a case the Board of Directors shall explain the reason for the deviation at the following Annual General Meeting.
Evaluation of the guidelines and auditor's statement with respect to the compliance with the guidelines
In accordance with the Swedish Corporate Governance Code the Remuneration Committee within the Board of Directors monitors and evaluates the application of the guidelines for remuneration to the Executives established by the Annual General Meeting. Also, the Company's auditor has, pursuant to Ch 8 Sec 54 of the Companies Act (2005:551), provided a statement with respect to whether there has been compliance with the guidelines for remuneration to the Executives which have applied since the previous Annual General Meeting. The evaluation and auditor's review have resulted in the conclusion that during 2012 the guidelines adopted by the Annual General Meetings 2011 and 2012 have been followed by CDON Group.
The Auditor's statement and the Board of Directors' report of the result of the Remuneration Committee's evaluation are available on the Company's website at www.cdongroup.com, at the Company's premises at Bergsgatan 20 in Malmö, Sweden and will be sent to those shareholders who so request and state their postal address or email address.