Nominating committee report

The Nominating Committee shall, in accordance with a resolution by the 2010 Annual General Meeting, comprise five members. The Annual General Meeting resolved to mandate the Chairman of the Board to contact the largest known shareholders in the Company in order of size until four representatives had been appointed to make up the Nominating Committee together with the Chairman of the Board.

 

The Chairman of the Board has contacted the largest shareholders in accordance with the instruction of the Annual General Meeting, and the members of the Nominating Committee held its first, preparatory, meeting on 9 November, 2010.

 

In addition to the Chairman of the Board, Conny Karlsson, the Nominating Committee comprises the following members: Mads Eg Gensmann (Parvus Asset Management), Andy Brown (Cedar Rock Capital), William Lock (Morgan Stanley Investment Management) and Anders Oscarsson (AMF & AMF Funds). Conny Karlsson is the only one of the members who is also a Member of the Board of the Company. Mads Eg Gensmann has acted as the Chairman of the Nominating Committee. The Company’s General Counsel, Fredrik Peyron, has acted as Secretary to the Nominating Committee.

 

The Nominating Committee has worked in accordance with the Swedish Code of Corporate Governance and the Instructions for Swedish Match AB’s Nominating Committee adopted by the 2010 Annual General Meeting. As per March 21, 2011, the Nominating Committee has held four meetings since the 2010 Annual General Meeting.

The Nominating Committee will give an account of how it has conducted its work at the Annual General Meeting.

The Nominating Committee will propose re-election of the present Board members Conny Karlsson, Andrew Cripps, Karen Guerra, and Meg Tivéus. Charles A. Blixt, Arne Jurbrant and Kersti Strandqvist have declined re-election.

 

New election is proposed of Robert F. Sharpe and Joakim Westh. 

 

Joakim Westh is 49 years old and has been Senior Vice President and Head of Group Function Strategy and Operational Excellence at Telefonaktiebolaget LM Ericsson and Group Vice President and member of the Executive Management Group at Assa Abloy AB. Prior hereto he worked at McKinsey & Co. Westh is currently a member of the Board in SAAB AB (publ), Rörvik Timber AB (publ), as well as in Absolent AB. Westh holds a M.Sc. from KTH Royal Institute of Technology and a Master of Science from Massachusetts Institute of Technology.

 

Robert F. Sharpe is 58 years old and serves as a Senior Advisor to the Chief Executive at ConAgra Foods, Inc., and was previously President, Commercial Foods, and Executive Vice President and Chief Administrative Officer at ConAgra Foods. Prior to his work at ConAgra Foods, Sharpe was a partner at Brunswick Group with a focus on communications with the financial media. Prior to that, he was Senior Vice President, General Counsel, and Secretary at PepsiCo, Inc and he has also worked at RJR Nabisco and Tyco International. Sharpe is currently a member of the Board of Directors at Ameriprise Financial, Inc. He holds a JD degree from Wake Forest University, a BA degree from Depauw University, and a BSE degree from Purdue University.

 

The Nominating Committee will propose Conny Karlsson as the Chairman of the Board and Andrew Cripps as the deputy Chairman of the Board.

 

All proposed Board members are independent in relation to the company, the company management and major owners.  

During the autumn 2010 the Board of Directors commissioned an external consultant to conduct an evaluation of the Board of Directors as regards the conduct and functioning of the Board’s work. The Chairman of the Board has informed the Nominating Committee about the outcome of the evaluation. The evaluation has given the Nominating Committee a basis from which to assess the competence and experience of the Board Members and the requirements for the future. This has guided the Nominating Committee's work.

 

The Nominating Committee is of the opinion that the proposed Board of Directors possesses a broad competence with appropriate diversification. The Board has longstanding experience from international businesses on both the European and the American markets. The Nominating Committee has made particular note of the Board´s collective experience in the fast-moving consumer goods markets and the tobacco industry.

 

The Nominating Committee considers that the proposed Board of Directors has the appropriate composition with regard to the company’s operations, phase of development and other relevant circumstances. It exhibits diversity and breadth of qualifications, experience and background.

The Nominating Committee will propose that the fees to the Board of Directors be paid as follows for the period until the close of the 2011 Annual General Meeting: the Chairman shall receive 1,710,000 SEK, the deputy Chairman shall receive 810,000 SEK and the other Board Members elected by the General Meeting shall each receive 685,000 SEK. It will further be proposed that the Board, as compensation for committee work carried out, be allotted 250,000 SEK to the Chairmen of the Compensation Committee and the Audit Committee respectively and 125,000 SEK respectively to the other members of these committees. Board employed by the Swedish Match Group shall not receive any compensation. The proposed fees represent an increase of fees by approximately 8.7 % compared to last year which the Committee considers reasonable in view of that there has been no increase in fees since the fees decided at the 2008 Annual General Meeting.

 

The remuneration to a board member may, subject to a specific agreement with Swedish Match AB, be invoiced from a company. In order for the Company to enjoy full cost neutrality, the invoiced remuneration shall be adjusted for social security charges and value added tax.

 

All Board Members who receive Directors’ fees will continue to acquire shares in the Company for an amount corresponding to the fee (excluding committee fees), after deductions for income tax. All such shares will be retained for a period of at least 12 months after the acquisition of the shares and half of the shares will be retained for at least 24 months.

The Nominating Committee will propose that the method of appointing the Nominating Committee shall be unchanged, in all material respects. It shall entail the Chairman of the Board of Directors, contacting the four largest shareholders in the company and asking them each to appoint a representative, to constitute, together with the Chairman of the Board, the Nominating Committee for the period until a new Nominating Committee is appointed. If any shareholder waives their right to appoint a representative, the shareholder who is the next largest owner, in terms of number of votes held, shall be offered the opportunity to appoint a representative. The names of the members of the Nominating Committee shall be published no later than six months before each Annual General Meeting. The four largest shareholders shall be identified on the basis of the known numbers of votes on August 31, the year before the forthcoming Annual General Meeting.

 

The Nominating Committee proposes that the Meeting should adopt the Instructions for Swedish Match AB’s Nominating Committee which are in all material respects identical to those adopted by the 2010 Annual General Meeting. The Nominating Committee shall provide proposals regarding (i) the election of the Chairman and other Members of the Board, and determination of the Directors’ fees to be divided between the Chairman and other Members, and any remuneration for committee work, (ii) the election of and payment of fees to auditors, when applicable, (iii) the election of a Chairman of the Annual General Meeting; and (iv) any amendment to how the Chairman and members of the Nominating Committee are to be appointed.