STOCKHOLM, Sweden, May 24, 2004 (PRIMEZONE) -- Questions have been raised about the long term incentive programmes in Skandia during the years 1997 -- 2003. On April 14, 2004, the Board therefore published a memorandum concerning these questions on Skandia's web site.
Information about local long term incentive programmes in the divested business of American Skandia was not included in the memorandum. There were several reasons for this that are set out below.
* Skandia's business within long term savings was during the period 1990 - 2000 conducted within a separate business unit -- AFS (Assurance and Financial Services). The organisation of this business was of a federal character. As a consequence thereof, the AFS-business unit enjoyed a large degree of independence. Although the main principles of local long term incentive programmes were reported to the board of Skandia, there was no requirement to report detailed information about these programmes to the head office. As a consequence thereof, no information has been held centrally about local incentive payments to employees within the then AFS-business unit, including American Skandia.
* In December 2002, Skandia entered into an agreement with Prudential under which Prudential acquired American Skandia on 1 May 2003. All information concerning the previous incentive programmes in American Skandia belongs as a consequence to Prudential.
* The sale and purchase agreement with Prudential contains an explicit prohibition of disclosing non public information concerning American Skandia's business, unless the information must be disclosed pursuant to applicable law.
Against this background, the Board came to the conclusion that it was not in the interest of Skandia and its shareholders to further investigate questions about historical remunerations to employees of American Skandia.
At Skandia's annual general meeting on April 15, 2004, the Board undertook, on request from certain shareholders, to reconsider its previous conclusion. Contacts have since been made with Prudential in order to seek their cooperation in collecting the requested information.
At Skandia's request, Prudential has provided Skandia with information regarding the aggregate payments and number of participants under American Skandia's long term incentive programme for the years in question.
A total amount of $48 million dollars (U.S.) was paid in respect of American Skandia's long-term incentive programme during the years 1997 - 2002. The indicated amount includes yearly payments to the most senior officers of American Skandia, as well as all other participants in these programmes. During these years an average of 70 key employees received these payments. In light of privacy concerns under US law, no additional information regarding payments to specific individuals will be made available.
The above-mentioned amount does not include payments made to employees within America Skandia under the Share Tracker and Wealth Builder Programmes. These payments have already been accounted for in the report published by the Board on April 14, 2004.
Additionally, a request has also been made to disclose the severance payments in relation to the divestment of American Skandia. This information has already been presented in the annual report of Skandia for 2003 and is included in the amount 696 million SEK referred to in note 44 on page 100 in the annual report. The mentioned amount include all personnel related costs incurred in connection with the sale of American Skandia. These costs concern both severance payments, incentive payments and any other personal related costs. The amount of 696 million SEK includes remuneration both to the management and to other employees. Of this amount 199 million SEK pertained to senior executives, as defined in the annual report. The severance payments were accepted by the then-board of Skandia, in order to retain key employees of American Skandia through the closing of the sale and ensure a successful completion of the sale of American Skandia.
For further information:
Bjorn Bjornsson, vice Chairman, Skandia, tel +46-8-788 25 00 Gunilla Svensson, Press Manager, tel +46-8-788 25 00
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