Management and company structure

Management and company structure

Electrolux operations are divided into five business areas, which include six sectors and a total of 25 product lines. Within Major Appliances, the business sectors are geographically defined, while the sectors Professional Products and Floor Care and Small Appliances are global. There are five Group staff units that support all business sectors: Finance, Communications, Branding, Legal Affairs, and Human Resources and Organizational Development.

In order to fully take advantage of the Group’s global presence and economies of scale, a global organization was established in 2009 with responsibility for product development, purchasing and manufacturing within Major Appliances. The Group has a decentralized corporate structure in which the overall management of operational activities is largely performed by sector boards.

Group policies and guidelines

Electrolux aims at implementing strict norms and efficient processes to ensure that all operations create long-term value for shareholders and other stakeholders. This involves the maintenance of an efficient organizational structure, systems for internal control and risk management and transparent internal and external reporting.

COMPASS was initiated during 2008 as a group-wide project to clarify joint processes and improve their efficiency in order to strengthen control and lower costs. Transparent information also allows better decision data to be developed.

Electrolux has determined that all of its operations will be undertaken on an environmentally, socially and ethically responsible basis. A proactive approach in this regard reduces risks, strengthens the brand, increases the motivation of personnel and ensures good relations with the individuals within the communities with which the Group interacts. Key policies in this context include the Electrolux Code of Ethics, the Electrolux Workplace Code of Conduct and the Electrolux Policy on Corruption and Bribery.

The Electrolux People Vision is to have an innovative culture with diverse, outstanding employees that drive changes and go beyond in delivering on the Group’s strategy and performance objectives. The Electrolux culture features diversity and innovation. Development of innovative products is a vital part of this vision. Diversity is a prerequisite for Electrolux ability to compete in a global market. Personnel with diverse backgrounds create a greater understanding of consumer needs in different countries.

President and Group Management

Group Management includes the President, the six sector heads, the five Group staff heads, the head of R&D Global Operations and the head of Global Operations Major Appliances. The President is appointed by and receives instructions from the Board. The President, in turn, appoints other members of Group Management and is responsible for the ongoing management of the Group in accordance with the Board’s guidelines and instructions.

Group Management holds monthly meetings to review the previous month’s results, to update forecasts and plans and to discuss strategic issues.

For details regarding members of Group Management, click here. The information is updated regularly at the Group’s website.

Changes during the year

  • Hans Stråberg, President and CEO of Electrolux, left the company on December 31, 2010. He was succeeded by Keith McLoughlin from January 1, 2011.
  • Lars Göran Johansson, head of Communications and Branding, has left Electrolux.
  • Henrik Bergström has been appointed head of Floor Care and Small Appliances.

New appointments as of February 1, 2011

Three new appointments in Group Management as of February 1, 2011, to increase the speed of product innovation and to continue to leverage Electrolux shared global strength;

  • Jonas Samuelson, Head of Global Operations  Major Appliances, in addition to his position as CFO
  • Jan Brockmann, Chief Technology Officer
  • MaryKay Kopf, Chief Marketing Officer.

Remuneration to Group Management

Remuneration guidelines for Group Management are resolved upon by the AGM, based on the proposal from the Board. Remuneration to the President is then resolved upon by the Board, based on proposals from the Remuneration Committee. Remuneration to other members of Group Management is resolved upon by the Remuneration Committee, based on proposals from the President, and reported to the Board.

Electrolux shall strive to offer total remuneration that is fair and competitive in relation to the country of employment or region of each Group Management member. The remuneration terms shall emphasize ‘pay for performance’, and vary with the performance of the individual and the Group.

Remuneration may comprise of fixed compensation and variable compensation. Following the ‘pay for performance’ principle, variable compensation shall represent a significant portion of the total compensation opportunity for Group Management. Variable compensation shall always be measured against pre-defined targets and have a maximum above which no pay-out shall be made. The targets shall principally relate to financial performance, for shorter (up to 1 year) or longer (3 years or longer) periods. Non-financial targets may also be used.

Each year, the Board of Directors will evaluate whether or not a long-term incentive program shall be proposed to the AGM. The AGM 2010 decided on a long-term share program for up to 160 senior managers and key employees.

For additional information on remuneration, remuneration guidelines, long-term incentive programs and pension benefits, see Note 27.

Business sectors

The sector heads are comprised of members of Group Management and have responsibility for the income statements and balance sheets of their respective sectors.

The overall management of the sectors is the responsibility of sector boards, which meet quarterly. The President is the chairman of all sector boards. The sector board meetings are attended by the President, the management of the respective sectors and the Chief Financial Officer. The sector boards are responsible for monitoring on-going operations, establishing strategies, determining sector budgets and making decisions on major investments.

In the external reporting, the Group’s operations are divided into five business areas. Operations within Consumer Durables are divided into four geographic business areas: Europe Middle East and Africa, North America, Latin America and Asia/Pacific.Professional Products is the fifth business area.

Timeline for the long-term incentive program for senior management

Earnings per share for Electrolux, excluding items affecting comparability, has to increase by an average of at least 5% annually before any performance shares will be allotted.

Participants in the program must invest in Electrolux shares. At the end of the three-year period, one matching share is allotted for each share aquired.