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Note 47 Average number of employees and personnel costs

  2008 2007
Average number employees by country Men Women Total Men Women Total
Sweden 6,947 2,179 9,126 6,689 2,009 8,698
Denmark 580 104 684 553 100 653
Finland 279 211 490 276 214 490
Germany 15,111 4,649 19,760 15,093 4,677 19,770
Poland 2,086 626 2,712 2,110 649 2,759
UK 6 3 9 - - -
Other countries 18 2 20 23 3 26
Total 25,027 7,774 32,801 24,744 7,652 32,396

Personnel costs 2008 2007
Salaries and other remuneration 15,655 14,073
Social security costs 5,165 4,747
(of which pension costs)1 (1,504) (1,387)
Total 20,820 18,820

1) SEK 38 million (57) of the pension costs are attributable to senior executives, i.e., presidents and vice presidents and former presidents and vice presidents. The Group’s outstanding pension obligations attributable to these officers total SEK 594 million (469).

  2008 2007
Salaries and other compensation Senior executives1 Other employees Total Senior executives1 Other employees Total
Sweden 53 4,076 4,129 47 3,846 3,893
Denmark 1 471 472 1 104 105
Finland 4 222 226 5 203 208
Germany 174 10,022 10,196 212 9,158 9,370
Poland 20 572 592 24 470 494
UK - 18 18 - - -
Other countries - 22 22 - 3 3
Total2 252 15,403 15,655 289 13,784 14,073

Social security costs 2008 2007
Sweden 2,417 2,145
Denmark 47 11
Finland 56 52
Germany 2,538 2,444
Poland 102 95
Other countries 5 -
Total 5,165 4,747

1) Senior executives comprise directors and senior executives but also deputy directors and vice presidents and former directors, deputy directors, presidents and vice presidents.

2) Total salaries and other compensation to directors and presidents include bonuses of SEK 49 million (81).

Benefits to directors and senior executives of Vattenfall AB

SEK thousands Directors’ fees and base salary 2008 including vacation pay Other remuneration and benefits 2008 Pension and severance costs 2008 Estimated variable compensation for 2008 to be paid 2009
Lars Westerberg, Chairman of the Board (from 29 April 2008) 387 - - -
Dag Klackenberg, Chairman of the Board (until 29 April 2008) 183 - - -
Viktoria Aastrup, Director (from 29 April 2008) 233 - - -
Carl-Gustaf Angelin, Director 41 - - -
Eli Arnstad, Director (from 29 April 2008) 187 - - -
Johnny Bernhardsson, Director 47 - - -
Christer Bådholm, Director 360 - - -
Ronny Ekwall, Director 41 - - -
Greta Fossum, Director (until 29 April 2008) 80 - - -
Jonas Iversen, Director (until 29 April 2008) 80 - - -
Lars-Göran Johansson, Deputy director (from 29 April 2008) 26 - - -
Hans-Olov Olsson, Vice Chairman of the Board 383 - - -
Lone Fønss Schrøder, Director 336 - - -
Tuija Soanjärvi, Director 336 - - -
Anders Sundström, Director 290 - - -
Lars Carlsson, Deputy director 41 - - -
Stig Lindberg, Deputy director (until 29 April 2008) 15 - - -
Per-Ove Lööv, Deputy director 55 - - -
Lars G. Josefsson, President and CEO 11,953 95 8,010 -
Jan Erik Back, First Senior Executive Vice President and CFO (until 15 August 2008) 2,903 71 533 -
Dag Andresen, First Senior Executive Vice President and CFO (from 1 October 2008) 825 2 248 -
Hans von Uthmann, Senior Executive Vice President 4,878 71 791 89
Tuomo Hatakka, Senior Executive Vice President 4,831 40 1,208 2,608
Hélène Biström, Deputy Head Business Group Nordic (from 1 February 2008) 1,754 61 29 -
Ann-Charlotte Dahlström, Senior Vice President Personnel 3,042 80 6,5581 -
Knut Leman, Senior Vice President Communications 2,008 56 3,3251 -
Hans-Jürgen Meyer, Finance Director Vattenfall Europe AG (from 1 February 2008) 3,543 43 761 2,975
Helmar Rendéz, Senior Vice President Strategies 2,610 69 630 -
Carolina Wallenius, Senior Vice President Communications (from 1 February 2008) 1,444 39 434 25
Total 42,912 627 22,789 5,697

1) Including severance costs.

Board of Directors

In 2008 the Board of Directors had two chairmen. Dag Klackenberg, who served as Chairman until 29 April, received a fee of SEK 183 thousand (512). Lars Westerberg, who has been Chairman since 29 April, received a fee of SEK 387 thousand.

Combined fees of SEK 2,551 thousand (2,274) were paid to the other directors, as shown in the breakdown in the table above. Of the reported amount, a fee of SEK 70 thousand (64) was paid to each the four non-executive directors who served on the Board’s Audit Committee, and a fee of SEK 13 thousand (13) was paid to the employee representative who held this position.

President and Chief Executive Officer

In 2008, Lars G. Josefsson, who is President and Chief Executive Officer of Vattenfall AB, received salary and other remuneration, including the value of a company car, amounting to SEK 12,048 thousand (8,711). As of 2005, no variable salary component is paid to the CEO.

The ordinary retirement age for Lars G. Josefsson (born 1950) is 60. Mr Josefsson has a pension solution which, in connection with his 2008 salary review, was locked at an amount corresponding to his pensionable salary in 2007, which was SEK 8,645 thousand. In connection with his salary review, Mr Josefsson was offered an amount that he was free to choose whether it would be applied toward a salary increase or pension premiums, whereby he chose a salary increase.

Occupational pension will thus be payable in the amount of 65% of said pensionable salary until 65 years of age. Thereafter, retirement benefits will be payable in accordance with the ITP plan. Above and beyond this is a pension supplement of 32.5% of the portion of his salary in excess of 30 times the Base Amount (the Base Amount is a standard amount used for Swedish social security purposes). The latter supplemental benefit is time-restricted until the age of 80. After the age of 76, it will be scaled down by one-fifth for each subsequent year and ceases completely at the age of 80. The pension obligation is covered by periodic premiums paid to an insurance company. The benefits are vested, i.e., they are not conditional on future employment. In the event Vattenfall serves notice, the CEO is entitled to severance pay corresponding to a maximum of 24 months’ salary. However, severance pay may only be paid until the contractual retirement age. The amount of the severance pay will be calculated on the basis of his base salary at the time notice was served. In the event of new employment or income from another source, the severance pay will be reduced by an amount corresponding to the new income or other benefits received during the period in question. Severance pay is paid monthly.

Other senior executives

Salaries and other benefits

For other senior executives who have been members of the Executive Group Management - a total of 10 individuals (10) - the sum of salaries and other compensation for 2008, including the value of company cars, was SEK 28,370 thousand (31,669). A breakdown and estimated variable compensation is shown in the table above.

Pension benefits

The costs for pension benefits in 2008 are shown in the table above.

Dag Andresen and Tuomo Hatakka have defined contribution pension solutions, which also applied for Jan Erik Back and Carolina Wallenius.

The other members of the Executive Group Management have defined benefit solutions - in one case with the opportunity to retire at 60 years of age, and for employees hired after 1 October 2003, with the opportunity to retire at 62 years of age and in one case at 65. For the employee with the opportunity to retire at 60, 70% of the base salary is payable between the ages of 60 and 65. The ITP plan applies from the age of 65, together with a supplementary pension (a so-called extension). The extension consists of 32.5% of the level of pensionable salary in excess of 20 times the Base Amount. Pensionable salary consists of the executives’ base salary and annual variable salary, in accordance with the ITP plan. Occupational pension from the age 65 amounts to approximately 45% of base salary.

In cases where a retirement age of 62 applies (four individuals), in one case the ITP plan applies with an extension equivalent to 32.5% of the level of salary in excess of 30 times the Base Amount. In addition, the average of the last five years’ fixed salaries is pensionable, while variable salary is not pensionable. The pension from age 62 amounts to approximately 40% of base salary. In the other cases a defined contribution pension solution applies.

All pension benefits are vested, i.e., they are not conditional on future employment. In the case of the defined benefit solution, premiums totalling SEK 237 thousand were paid to Alecta and for ITP-K. The rest of the pension cost (the majority) is an actuarially calculated cost consisting of the ITP liability and the annual change in the capital value of the portions over and above ITP. This is posted as a liability and is secured through the Vattenfall Pension Foundation. In cases where alternative ITP has been chosen (a so-called high-earner solution), premiums have been paid in instead of the equivalent amount being posted as a liability. Added to this is the so-called extension above and beyond ITP described above.

Terms of notice on the part of the company

For the Swedish executives, if the company serves notice, they are entitled to their salary during the contractual notice period (6 months), plus severance pay equivalent to 18 months’ salary, which is paid monthly with a deduction for the amount corresponding to any new income during the period in question. A departure has been made from the principle of monthly payment and deduction, since payment that allows for a pension solution has been chosen.

However, Tuomo Hatakka, Hans-Jürgen Meyer and Helmar Rendez have fixed-term employment contracts.

Drafting and decision processes

In 2006 the Board established a compensation committee to conduct preparatory work for ongoing matters regarding the compensation of senior executives. The committee handles matters pertaining to annual salary reviews and other terms of employment for the CEO. In addition, the committee drafts principles regarding the salary and remuneration of the members of the Executive Group Management. The committee reports its work to the Board of Directors in such a way that the committee chair, who is the Vice Chairman of the Board, informs the Board about the committee’s decisions. However, the Board as a whole must decide on matters concerning the CEO’s employment and decide on the CEO’s terms of employment. (See also "Corporate Governance Report incl. Board of Directors and Executive Group Management".)

Incentive programme

Against the background of the Swedish government’s guidelines on executive compensation and incentive programmes, the Board of Vattenfall AB has adopted a programme which as of 2005 applies for the Swedish operations and for all employees in Sweden. In accordance with the government’s guidelines, the Group CEO does not receive any variable salary portion. Regarding other managers and employees, no one has a variable salary portion that exceeds the equivalent of two months’ salary per year, or 16.7% of normal base salary. Also, for certain managers, the normal base salary can be reduced by 16.7%, depending on outcome. The maximum level for most employees averages approximately SEK 17 thousand per year.

As previously, the basis of the incentive programmes is the Group’s goal for long-term value creation1. The Group target applies for all employees. Further, the result of each unit and individual is measured.

In other countries the Group’s value creation target is also used in agreements on variable salary for senior executives and other employees, where applicable.

Long-term target programme (LTI)

Starting in 2008, the members of the Executive Group Management (excluding the CEO) and the business unit managers (totalling approximately 20 persons) also have agreements on the long-term target (LTI) for the period 2008-2010. In these agreements, targets are set only with respect to the Group’s five strategic ambitions. The maximum outcome at the end of the period can amount to four extra months' salary if the three-year targets have been met.

1) Value creation = the positive change in operating profit less the required return on average net assets, where the required return is 11%.