Remuneration

Remuneration policy for the Supervisory Board and the Executive Management
TrygVesta has adopted a policy with respect to remuneration of the members of the Supervisory Board and the Executive Management and has also defined overall guidelines for incentive pay.

Read more at www.trygvesta.com > Our business > Corporate governance.

Remuneration of the Supervisory Board
Members of the Supervisory receive a fixed fee and are not covered by incentive programmes or severance schemes. Their remuneration is fixed on the basis of trends in the company's peer group, taking into account competencies and efforts as well as the scope of the Board work. The Chairman receives triple the amount of the other members, and the Deputy Chairman receives double the amount.

In addition, members of the Supervisory Board who participate in the audit and remuneration committee receive remuneration for these duties. The chairmen receive one and a half times the amount of other members. The shareholders approve the remuneration of the Supervisory Board for the current financial year and the remuneration was unchanged from 2007 to 2008.

Remuneration of the Executive Management 
TrygVesta’s Executive Management comprises three members. The remuneration of the Executive Management reflects a wish to secure a balanced earnings performance for the Group in the short term as well as in the longer term.

The remuneration of the Executive Management includes performance-related bonus, comprising a bonus plan providing for up to three months’ additional salary including pension (four months for the Group CEO). The bonus plan is directly linked to the achievement of pre-defined benchmarks. The assessment of the individual Executive Management member’s target achievement includes the Group’s overall performance as well as the performance of the individual members within their areas of responsibility. Specific benchmarks are defined within all four perspectives of the balanced scorecard (financial, customer, processes and learning). These benchmarks reflect the strategic focus areas of the Group and the individual business areas or organisational units, including growth, profitability, cost reduction, customer satisfaction, customer loyalty, image, processes, communication, employee satisfaction and development, and innovation. Members of the Executive Management may choose to receive their bonus in cash or by acquiring shares at a discount to the market price. Members of the Executive Management who choose to acquire shares at a discount to the market price can buy the shares at par with a total discount equal to the bonus for which the member is eligible. Part of the Executive Management’s remuneration consists of stock options in order to build loyalty and motivation. The value of the stock options on the grant date may not exceed 50% of the Executive Management member’s fixed annual salary inclusive of pension. On exercise of the stock options, the value, calculated as the difference between the market price at the time of exercise and the price at which the options were granted, may not exceed 200% of the Executive Management member’s fixed annual salary inclusive of pension. Members of the Executive Management are entitled to company cars. A contribution equal to 25% of their fixed salary is paid into a pension scheme. Each member of the Executive Management is entitled to 12 months’ notice of termination and to 12 months’ severance pay. However, the Group CEO is entitled to 12 months’ notice of termination and to 18 months’ severance pay plus pension contributions during such period.

Incentive pay
Like the Executive Management, the Group Executive Management and senior employees are offered a performance-related bonus of up to three months’ salary and on similar terms. Furthermore, TrygVesta operates a stock option programme for the Executive Management, the Group Executive Management, senior executives and employees to reward outstanding performance. Each option entitles the holder to acquire one share at the exercise price. Stock options cannot be exercised earlier than three years after the date of grant and not later than five years after the date of grant. The strike price is the market price at the date of grant plus 10%. The exercise price is equal to the strike price minus dividend payout in the period. Stock options can only be exercised during the open trading windows in connection with the full-year and half-year profit announcements. Own shares are bought to cover the stock option programmes.

In 2008, the stock options entitled the holders to acquire shares at the average price of TrygVesta shares (all trades) on OMX Copenhagen Stock Exchange on 22 February 2008 plus a 10% supplement, equal to an strike price of DKK 416.06. TrygVesta expects to grant a stock option programme of a similar value and on similar terms in 2009.

Employee bonus
TrygVesta operates an employee bonus programme because it is important to the Group that all employees see their own efforts relative to the company’s overall targets. Employee bonus benchmarks are combined ratio and growth. For 2008, the bonus triggered an offer to buy shares at a discount to the market price with a discount element equal to DKK 5,000 to each employee.