To ensure that senior executives and other employees can be recruited and retained, H&M aims to offer employees market rates of pay.
The below proposed guidelines for remuneration to senior executives were approved by the Annual General Meeting on May 3, 2007:
H&M does not have a remuneration committee because the Board of Directors is deemed to have this responsibility. The Board negotiates annually the Managing Director’s salary according to established guidelines. The employment terms for other members of the executive management team are determined by the Managing Director and the Chairman of the Board. With the exception of the Managing Director, no severance pay is paid out by H&M.
H&M’s principles for the remuneration of senior executives are as follows:
- Remuneration should be based on factors such as work assignments, competence, position, experience and performance.
- Senior executives receive competitive remuneration at market rates. H&M is present in more than 20 countries and remuneration may differ from place to place.
- The main portion of the remuneration consists of the fixed salary. For , see the section on the bonus system below.
See Note 6, on page 62-63 in the Annual Report 2006 for information about the variable portion and outcome of remuneration to Managing Director and others in exective management team.