Swedbank cancels variable remuneration for 2009

The Board of Swedbank has decided to cancel variable remuneration for 2009, where employment contracts give the bank a discretionary right to decide on such remuneration. This decision will result in the reversal of provisions for accrued variable remuneration, which up until the third quarter amounted to SEK 406 million.

2009 was an exceptional year for the financial industry. The financial crisis triggered regulatory interventions around the world in order to guarantee the stability of the financial system. In Sweden, the government has guaranteed the stability of the financial system and the shareholders have contributed through strengthening the balance sheets of the banks. For Swedbank 2009 was a uniquely challenging year with significant losses and a second rights issue. Swedbank has during 2009 taken a number of actions in order to build a bank sustainable for the long term. The measures taken by the bank’s management during 2009, and will continue taking, is part of the strategic efforts aimed at rebuilding the trust in Swedbank. Against this background, the Board has decided to cancel variable remuneration for 2009, other than situations where such a decision would violate employment contracts. Together with the previous reversal of accrued provisions for variable remuneration during 2009 in Baltic banking, total variable remuneration for 2009 is estimated to be SEK 17 million. “This is a unique decision in the light of the bank’s losses and government efforts, and should not be interpreted as a signal that we have changed our view regarding the basic principles for the bank’s remuneration system. There is still a strong consensus that a system combining fixed and variable remuneration is the most efficient system to create value for customers and shareholders in the long term. However, going forward we will emphasize the long-term component of the total remuneration”, says Michael Wolf, CEO of Swedbank. The decision is a result of many complex considerations. At first glance it might appear as a simple decision to cancel variable remuneration during a year when the bank is reporting substantial loan loss provisions. But our mission is to protect the shareholders’ investment and to safeguard the bank’s competitiveness, both in the short-term and the long-term perspective”, says Carl Eric Stålberg, Chairman of the Board. Further information, please contact: Thomas Backteman, Executive Vice President Corporate Affairs, Swedbank, phone: +46 708 311 166 Anna Sundblad, Press Manager, Swedbank, phone: +46 70 321 39 95 1. Reversal of accrued provisions for 2008, Baltic Banking -197 SEK million Non-cancellable variable remuneration for 2009, 214 SEK million Variable remuneration, net 17 SEK million