» nordnet annual report 2012 «
January – December 2012
Operating income decreased by 13 percent to SEK 938.4 million (1,084.2)
Profit after tax for the period fell by 30 percent to SEK 188.9 million (270.1)
Earnings per share before dilution fell by 30 percent to SEK 1.08 (1.54)
Nordnet is an online bank that provides services that make it easy to save and borrow. With smart solutions and a modern approach, we focus on active savers in the Nordic countries.
Our vision is to become the leading bank for savings in the Nordic region. To achieve this, we seek to keep things simple and focus on what is best for savers.
Nordnet AB (publ) is listed on the NASDAQ OMX Stockholm exchange.
operating profit
(January-December)SEK 227.2
(351.5)
million
active customers
(31 December)366,600
(344,000)
net savings
(January-December)6.9
(9.2)
billion
savings capital
(31 December)SEK 104
(90)
billion
number of trades
(January-December)12,739,100
(15,311,500)
trades
cost coverage
(January-December)92
(94)
percent
More about Nordnet for investors and media can be found at www.nordnetab.com.
contents
contents ... 2
nordnet 2012 ... 3
board of directors’ report ... 9
corporate governance report ... 13
consolidated income statement ... 25
consolidated statement of financial position ... 26
consolidated changes in equity ... 27
consolidated cash flow statement ... 28
parent company’s income statement ... 29
parent company’s balance sheet ... 30
changes in equity, parent company
1)... 31
parent company’s cash flow statement ... 32
notes... 33
multi-year summary ... 72
key ratios... 73
proposed distribution of profit ... 74
auditor’s report ... 75
nordnet 2012
Visit Nordnet’s website at: www.nordnetab.com for up-to-date information, reports and news.
CEO’s comments
Favourable stock market but low risk appetite
Looking in the rear-view mirror, 2012 was a good year for savers whose money was invested in the stock market. The Swedish, Norwegian and Finnish stock markets all rose by just slightly less than 15 percent and the Danish stock market rose by as much as 27 percent. However, gloomy headlines focusing on debt crises, fears of recession and the US debt cliff pervaded the mood among investors. The level of market activity and the risk appetite contradicted the rising markets more or less throughout the year.
Lower income but continued customer growth and savings
There is considerable hesitance among private individuals to invest in the stock market, which has led to lower commission income. The number of transactions decreased by 17 percent compared with 2011 and, on average, our customers made 2.8 transactions per month compared with 3.7 transactions in the preceding year. At the same time as stock exchange activity declined, market interest rates were lowered, which also put pressure on net interest. Throughout the year, we grew in the area of private loans, while our margin lending, which is associated with the appetite for share investments has declined. Despite low interest rates and a cautious stance with regard to the stock exchange, we continue to grow in terms of new customers and savings capital. Our underlying growth is good and, over the year, we increased our customer base by 7 percent and the number of accounts by
10 percent to more than 440,000. Net savings over the year amounted to nearly SEK 7 billion, and total savings capital has risen by SEK 14 billion to a total SEK 104 billion.
A Nordic financial factory
I have been CEO of Nordnet for a bit more than half a year and have had time to reflect on the operations. Our Nordic platform is a clear strength. With a factory in Stockholm, producing and handling Nordic savings and loan products, local sales and service organizations and a user-friendly digital shop, we have an effective business model. We must, however, broaden our business and become less dependent on factors beyond our control. We will continue to be best at services connected with share trading – that is our origin and a major part of our future. If the stock markets develop favourably in 2013, I believe turnover in the markets will grow. It is in such a situation that our scalability shows its best side. The Nordnet factory is able to handle considerably larger volumes than it currently does without requiring major investments in IT systems or personnel. We cannot, however, base a growth strategy on a hope that the market will turn. I see four concrete areas, beyond share trading, where Nordnet has opportunities to establish a strong position: pensions, mutual fund distribution, cash savings and consumer loans. The key to success in these areas lies in creating products offering a high level of customer value. What is good for our customers is also good for Nordnet.
Håkan Nyberg
CEO
key events per quarter
Q1
CFO Jacob Kaplan assumed the role of Acting CEO effective from 1 January
Nordnet is voted as Bank/Stockbroker of the Year in Denmark for the fourth consecutive year (Danish Shareholders’ Association)
Q2
Private banking launched in Denmark
Improved functionality in Nordnet’s savings account Q3
Nordnet’s new, web-based trading application Webtrader, suited to the needs of both beginners and more advanced savers, was launched
Håkan Nyberg began work as the new CEO of Nordnet, extending at the same time the Group management team to include the country general managers and HR manager
Per Hansen began work as the new savings economist in Denmark, his foremost task being to promote matters of private finance from the perspective of the saver
Q4
Nordnet Denmark reports its highest figure to date in terms of new active customers during a single quarter
The Nordnet blog is launched in a new responsive format where those interested in savings can read posts or write their own contributions on matters of private finance – a step towards simpler and more active private savings
Günther Mårder is appointed as the new savings economist for Nordnet Sweden, with the task of generating opinion in private savers’ interests.
this is Nordnet
Nordnet provides services that simplify savings and loans. Towards the end of the 90s, we revolutionized stock trading, making it possible for anyone to become their own stockbroker. Private savers were offered the same tools as professionals and the imbalance in information was removed. Ten years later, we revolutionized the pensions sector with our flexible, uncomplicated and value-for-money pensions offering. We have developed from a Swedish online brokerage into a Nordic online bank and today we are offering a whole range of online and mobile savings and loans services.
Nordnet keeps it simple. This is our mission, and the driving force behind everything we do. It is also with simplicity in mind that we will reach our vision, to become the leading bank for savings in the Nordic countries.
Nordnet is the active, modern and simple alternative. We stand on the side of the saver in the struggle for a more transparent finance industry. As savers in the Nordic region grow more aware of their own economy and seek cheaper, more transparent and simpler online banking solutions, we believe we will continue growing.
our product areas
Nordnet’s business concept is to offer private individuals in the Nordic region with services that simplify savings and loans. With our mission “Nordnet keeps it simple” as the starting point, we provide simple, smart services that focus on active savings. We divide our business into three areas: investments & savings, pensions and banking. Investments & savings
Investments & Savings is Nordnet’s core business and consists mainly of securities trading via internet and mobile phones. Simple tools, extensive freedom of choice and modern technology provide the conditions for successful savings. All sorts of customers use Nordnet’s trading tool – from the long-term saver to the short-term day trader. Some of the basic products include equities trading on seven markets, fund savings and derivative trading, warrants, bonds and exchange traded funds. Nordnet’s main sources of income from investments & savings products come from commission and net interest income through margin lending.
Pension
The pension area offers considerable growth potential thanks to demands for increased transparency and new rules for aspects including the right to transfer your pension. Products vary somewhat between the markets in
individuals, employers and the self-employed. Nordnet’s main sources of income from pension products come from brokerage and mutual fund commissions.
Bank
Nordnet provides simple but key banking service for savers, enabling them to gather as much of their finances as possible in one place. Savings accounts are available on all Nordic markets, and in Sweden individuals are also offered private loans and payment services. Nordnet’s main source of income from banking products comes from net interest income.
our markets
Nordnet has business activities in Sweden, Norway, Denmark and Finland. Central functions, the IT platform and the Swedish sales and service organization are located at the Group’s head office in Alvik outside Stockholm. There are also local offices in Oslo, Helsinki and Copenhagen with responsibility for customer services, sales and marketing on the respective markets.
Common to all Nordic countries is that they are dominated by Jurassic banks and pension dragons – major banks with branch offices and traditional insurance companies – while there are also one or two local online players in each market. Nordnet is the only online bank with a presence throughout the Nordic region.
Nordnet mainly grows through the migration of customers from Jurassic banks and pension dragons. Transitions between online players are significantly fewer. In 2012, customer growth was greatest in Denmark and Finland.
For current information about products, financial development and competition in each market, visit Nordnet’s
corporate website at: www.nordnetab.com.
Sweden 2012 – new savings format and savings economist
The new savings form investeringssparkonto (ISK) was launched Pensions high on the agenda
A new savings economist who promotes matters of private finance from the perspective of the saver In early 2012, a new savings format was introduced – investeringssparkonto (ISK) – and Nordnet offered this type of account to customers from the outset. With Nordnet’s investeringssparkonto, customers can easily save in shares and mutual funds without needing to declare individual transactions or pay capital gains tax when selling securities.
During the year, there was a lively debate about the Swedish pension system, focusing on the right to freely move ones pension savings and possibly prohibiting commissions. The possibility of being able to freely move ones pension capital between different players (expected to commence on 1 January 2015), demands for increased transparency and generally strengthened rights for pension savers will probably benefit Nordnet in the future. Nordnet’s saver-friendly pension offering continues to attract new customers and over the year we were entrusted with delivering occupational pension solutions to a number of companies, including Bauhaus, Björn Borg, JM and Pfizer.
At the start of the fourth quarter, Günther Mårder, former CEO of the Swedish Shareholders’ Association, became the new savings economist at Nordnet Sweden. As a savings economist, Günther promotes matters of private finance from the customer perspective, both through physical meetings with customers, the media, politicians and partners, and in particular by means of social media activities. Follow his posts on the Nordnet blog or Twitter. Due to diminished risk appetite, securities borrowing decreased during the year. However, in the area of private loans, our award-winning product Toppenlånet has continued to grow. Toppenlånet is a private loan for people with control of their finances, but who need money over the short term. We can provide a very competitive interest rate thanks to this target group.
Considerable focus was placed on customer satisfaction and service during the year. This is an aspect we continue to work on, and both small and large-scale improvements in customers’ encounters with Nordnet are important, regardless of whether this takes place over the phone, by e-mail, through social media or via our website.
Norway 2012 – both for monthly savers and millionaires
Launch of Private Banking Paper-less opening of accounts in 120 seconds
Customer meetings through our nationwide Spare- og invesTOUR
As a complement to the broad savings services that are offered in the Norwegian savings market, Nordnet launched its Private Banking offering in 2012. Private Banking at Nordnet does not mean the same thing as Private Banking at traditional banks – it requires neither expensive premises nor fancy desks to attract millionaires and offer them competitive terms, easy-to-use tools and personal service.
During the autumn, Nordnet Norway increased its visibility around the country when the Spare- og invesTOUR took place, receiving a very positive reception. Giving savers around the country the opportunity to meet Nordnet plays an important part in building stronger relations with both existing and new customers.
Nordnet’s core values simple and modern are to be reflected in everything we do, both on a small scale and on a larger scale, and throughout the customer relationship. In 2012, a completely electronic become a new customer process was introduced, making it possible to use digital identification to become a customer in 120 seconds with no complicated papers being involved.
Denmark 2012 – Bank/Stockbroker of the Year (again!)
Bank/Stockbroker of the Year – four years running High inflow of customers and capital
Renowned investment economist is our new spokesperson
In March, Nordnet was, for the fourth consecutive year, and for the fifth time in all, named “Bank/Stockbroker of the Year” by the Danish Shareholders Association whose members each year select the bank or stockbroker they consider to have benefited savers most – important recognition for a modern online bank.
The combination of Nordnet’s attractive offering and pension savers’ demands for increased transparency, freedom and low fees has led to pension capital in Denmark doubling for the second year running. As awareness of factors such as these increases and savers scan the market for new opportunities, Nordnet is an attractive alternative in both occupational and private pensions.
Another addition for 2012 was the launch of Nordnet’s Private Banking offering. For wealthy customers seeking both good service and competitive prices, Nordnet is the obvious choice. Private Banking customers are always offered the best terms with regard to commissions and interest and only pay when a service is used actively. At the end of the summer, the renowned investment economist Per Hansen began working as Nordnet’s
spokesperson in Denmark. Per participates in debates and discussions on private finance, always in the service of savers, and from the very outset gained considerable media impact.
Finland 2012 – success in fund savings and social media
Strong customer growth Savings in mutual funds increasing in popularity
supermarket strategy, we gather the market’s sharpest funds in our user-friendly platform and make it possible for savers to compare aspects such as price, risk and return. The proportion of Nordnet’s customers who save in mutual funds rose by 93 percent over the year, albeit from a low initial level. In the third quarter a monthly savings function in mutual funds was launched, a natural step towards simpler savings.
As an effect of the diminished risk appetite and the high proportion of cash-related savings, in 2013, Nordnet will launch a fixed-income supermarket, where low-risk products are packaged and gathered in an easily surveyed and accessible format.
Nordnet has a strong presence in social media in Finland. Our site, www.nordnetblogi.fi is one of the country’s most popular meeting places for those who are interested in savings and our Facebook page is liked by many customers and other stakeholders.
the share
Nordnet’s share price rose by 8 percent over the year to SEK 16.80, equivalent to a market value of SEK 2.9 billion at year-end. The turnover rate was 19 percent.
Nordnet’s shares are quoted on the NASDAQ OMX Stockholm under the ticker NN B. The shares are part of the Mid Cap segment under the Financials sector.
Share capital
On 31 December 2012, Nordnet had a share capital of SEK 175 million (175) divided between 175,027,886 (175,027,886) shares, each with a quotient value of SEK 1. All shares are class B shares with equal voting rights and share of the company’s capital and profits.
Buy-back and sale of own shares
Nordnet has not bought-back or sold own shares over the year. Nordnet owned none of its own shares at year-end 2012.
Ownership
Nordnet had 6,744 (6,944) shareholders on 31 December 2012, a decline of 3 percent compared to the same date in 2011. E. Öhman J:or AB is the largest shareholder with 30.2 (30.2) percent of the capital. The number of shareholders resident in Sweden represents 91 (94) percent of the capital. At year-end, the largest owner groups
The Nordnet share 2012 2011 2010 2009 2008 2007
Total number of shares traded 33,226,791 34,330,105 24,715,332 23,447,994 24,275,933 38,768,615
Total number of trades 27,007 35,297 31,489 15,555 9,333 19,212
Total v alue of shares traded (SEK million) 638 647 641 401 318 874 Av erage numbers of shares traded 132,907 135,692 97,689 93,418 96,333 154,457
Av erage number of trades 108 140 124 62 37 77
Av erage v alue of shares traded (SEK million) 2.6 2.6 2.5 1.6 1.3 3.5
Turnov er v elocity 19% 19% 14% 14% 15% 24%
Price performance 8% -33% -1% 174% -55% -20%
Total return 12% -30% 1% 180% -53% -18%
Highest price paid 25.7 25.00 30.80 23.80 19.50 25.50
Lowest price paid 14.55 13.90 21.50 8.65 7.50 18.30
Share price at year-end 16.80 15.60 23.30 23.60 8.60 19.20
Market capitalisation at year-end (SEK million) 2,940 2,730 4,078 3,940 1,413 3,168
Data per share
Income before tax 1.30 2.01 1.53 1.5 1.11 1.69
Income after tax 1.08 1.54 1.21 1.23 0.84 1.19
Div idend per share1 0.70 0.65 0.50 0.50 0.50 0.50
P/E ratio 15.6 10.1 19.3 19.2 10.2 16.1
Equity per share 8.65 8.17 7.09 6.21 5.18 4.92
Av erage number of shares before dilution 175,027,886 175,027,886 169,475,689 165,008,025 164,941,468 165,018,878 Av erage number of shares after dilution 175,027,886 175,027,886 171,537,967 168,926,185 169,466,841 169,938,944 Number of outstanding shares at year-end 175,027,886 175,027,886 175,027,886 166,937,285 164,347,624 165,018,878
The largest shareholdes as of 31 December 2012 Number of shares Votes and capital
E. Öhman J:or AB 52,886,083 30.2% Premiefinans AB 18,157,305 10.4% Skagen Kon-Tiki Verdipapirfond 7,007,907 4.0% Lannebo Småbolag 6,350,300 3.6% Dinkelspiel, Ulf 5,911,177 3.4% Bredberg, Micaela 5,886,550 3.4% Versteegh, Catharina 5,886,550 3.4% Dinkelspiel, Tom 5,100,776 2.9% Dinkelspiel, Claes 4,801,838 2.7% Handelsbanken fonder AB Re Jpmel 4,577,440 2.6% BK Julius Baer & Co Sweden Main Ac 3,600,611 2.1% Lannebo Microcap II 3,000,000 1.7% Fjärde AP-fonden 2,897,282 1.7% Försäkringsbolaget Av anza Pension 2,068,776 1.2% FBP Pension Variabel 1,988,510 1.1% Total top 15 shareholdes 130,121,105 74.3% Total other shareholdes 44,906,781 25.7%
Total 175,027,886 100%
Shareholdings in terms of size as of 31 December 2012
Number of shareholdes Number of shares Average shares per owner Number of votes and capital 1 - 500 3,811 684,588 180 0.4% 501 - 1000 1,096 986,610 900 0.6% 1001 - 5 000 1,296 3,239,922 2,500 1.9% 5001 - 50 000 438 6,204,356 14,165 3.5% 50 001 - 500 000 66 10,498,245 159,064 6.0% 500 001 - 5 000 000 29 46,227,517 1,594,052 26.4% 5 000 001 - 10 000 000 6 36,143,260 6,023,877 20.7% 10 000 001 - 2 71,043,388 35,521,694 40.6% Total 6,744 175,027,886 25,953 100%
Shareholding per owner group as of 31 December 2012
Owner group Number of shares Votes and capital
Financial and institutional owners 74,632,192 42.6% Priv et owners 50,292,507 28.7% Non-financial companies 31,284,002 17.9% Owners domiciled abroad 15,188,178 8.7% Social insurance funds 3,443,031 2.0% Interest organisations 152,644 0.1% Public sector 35,332 0.0%
board of directors’ report
Introduction
The Board and Chief Executive Officer of Nordnet AB (publ) (Nordnet), company registration number 556249-1687, headquartered in Stockholm, hereby submit the Annual Report and principles of consolidation for the 2012 financial year. For other information on the company, please see Note 1
Operations
Via its subsidiary Nordnet Bank AB, Nordnet offers services for savings and securities trading. A large number of information and guidance services are also offered, as well as a number of simpler bank services. Operations are mainly conducted via internet. Via the brand Nordnetdirekt, simpler online broker services are provided at the market’s lowest brokerage commissions. In Norway, Denmark and Finland, operations are run via branch offices. Through its subsidiary Nordnet Pensionsförsäkring AB, Nordnet offers life insurance operations focused on pension savings. In Norway, the pension operations are conducted by a branch office. Through the brand
Konsumentkredit in Sweden, consumer loans are provided to private individuals on the Swedish market. Nordnet’s other operations are the share discussion service VCW Internet Services AB and the derivatives information site Deriva Financial Services AB.
Significant events during the year
We can look back over a good year for the stock markets, in which the Nordic markets rose in value by 12-15 percent, with the exception of Denmark which stands out with a return of 27 percent. This was despite a year of European debt crisis, weakening economies and all possible clouds of gloom. Normally, a good year for the stock markets entails increased risk appetite and increased share trading. However, 2012 was a year in which old truths no longer applied. The extended economic uncertainty in Europe and the rest of the world has made its mark on savers’ risk appetite and cash savings reached new record levels. The number of transactions made through Nordnet decreased by 17 percent over the year.
The year began with a new savings form seeing the light of day – investeringssparkonto (ISK). This account form allows savers to buy and sell shares without complicating their tax returns and incurring capital gains taxes. Instead, an annual tax is paid on the value of the account. Nordnet launched this account form from the outset, with a modern version without fixed fees.
The number of active customers at Nordnet rose by 22,600 over the year to 366,600, equivalent to an increase of 7 percent. Favourable net savings combined with higher market capitalization has resulted in our savers’ savings capital increasing from SEK 90 billion to SEK 104 billion. The customer flow was stable over the year despite major market fluctuations and the crisis of confidence for the finance sector, signifying a strong belief in Nordnet as a player. A number of new products were introduced over the year, including Webtrader, Private Banking in Norway and Denmark, an electronic new customer process and Autotrader in Norway. In Denmark, the Danish
Shareholders Association named us Bank/Stockbroker of the year for the fourth year running.
Nordnet has increased its visibility in the public debate and is represented in each country by a savings economist tasked with promoting the interests of private savers. In Sweden, there was considerable debate about pension savers’ rights in 2012, and aspects subject to investigation included transfer rights and a possible prohibition on commissions.
Nordnet’s former CEO left his position on 31 December 2011 and on 1 January 2012, the company’s CFO Jacob Kaplan was appointed acting CEO. On 9 August, Håkan Nyberg began work as the CEO of Nordnet. Five new senior executives were appointed to Group management over the year: Jan Dinkelspiel (Country General Manager, Sweden), Max Gandrup (Country General Manager, Denmark), Niklas Odenwall (Country General Manager, Finland), Anders Skar (Country General Manager, Norway) and Maino Öhrn (HR Manager). Profits and financial review
income, SEK 344.2 (460.3) million was net commission, SEK 520.6 (547.3) million was net interest income, SEK 41.9 (45.1) million was charges and other income and SEK 31.7 (31.6) million was net profit from financial transactions. Operating expenses before credit losses fell by 4 percent to SEK 666.5 (691.8) million. Operating profit for the financial year amounted to SEK 227.2 (351.5) million. The operating margin was 24 (32) percent. The profit for the year was SEK 188.9 (270.1) million. The profit margin was 20 (25) percent. Earnings per share before dilution were SEK 1.08 (1.54) and after dilution was SEK 1.08 (1.54). Goodwill and brands at year-end amounted to SEK 206.0 (207.1) million. At the end of the period, the Group’s liquid funds, including liquid funds in the insurance business, amounted to SEK 3,793 (4 016) million, of which frozen assets amounted to SEK 89 (165) million. The consolidated equity at year-end was SEK 1,514.0 (1,429.3) million. The equity is divided between 175 027 886 outstanding shares, corresponding to SEK 8.65 per share. The consolidated capital coverage ratio was 2.29 (1.98). Investments in tangible fixed assets over the year amounted to SEK 13.7 (15.0) million. Investments in intangible assets over the year, such as development work expenses brought forward, amounted to SEK 12.8 (10.4) million, of which SEK 4.3 (3.0) million in internal product development expenses brought forward. The Group acquired other intangible assets for SEK – (1.4) million over the year. Marketing expenses amounted to SEK 36.5 (49.5) million. A multi-year overview of consolidated and key figures is presented after the notes.
Parent company
The parent company’s operating income amounted to SEK 9.7 (64.8) million and relates to internal Group administrative services. The parent company’s profit after financial items amounted to SEK 136.3 (303.5) million. The profit includes an anticipated dividend from subsidiaries of SEK 120 (175) million. Effective from 1 January 2012, only the CEO is employed by the parent company, which accounts for the lower operating income and personnel expenses. The parent company’s liquid funds amounted to SEK 3.5 (11.6) million, and shareholders’ equity to SEK 1,162.1 (1,142.0) million. Dividends of SEK 113.8 (87.5) million were paid to shareholders for the 2011 financial year.
Future prospects
Nordnet has an efficient operating model. We employ a shared platform in order to provide a Nordic offering. The head office in Stockholm houses Group functions such as IT, administration, finance and legal. In the four countries where we maintain operations, we employ personnel who work with service and sales.
We hold a strong position in all markets in the area of securities trading over internet. This is a position we will work hard to maintain. Similarly, we will work actively to broaden our business and become less dependent on factors beyond our control. Beyond share trading, four areas are judged to offer strong growth potential: pensions, mutual fund distribution, cash-related savings and consumer loans.
Regulatory changes and savers’ demands for transparency and lower fees will benefit our pension business. This can already be seen in Denmark, where we have doubled our pension capital for two consecutive years by means of a modern and customer-focused offering. In the area of mutual funds and cash savings, we apply the
“supermarket strategy”: the best products in the market are gathered in a simple, digital interface where factors such as price, risk and historical trends can be easily compared. In Finland, our mutual funds portal is under construction and the proportion of customers who save in mutual funds grew by more than 90 percent in 2012. In cash-related savings, we are launching a digital supermarket for low-risk products in early 2013. In consumer loans, there is room for a bank that offers credit on fair terms, without hidden fees. This has been demonstrated in particular by our award-winning “Toppenlånet” loan. By always offering the market’s lowest from rates, we grew rapidly in 2012.
The long-term trends favour our business model. Increasing awareness among consumers regarding financial services will hasten the migration of customers from the Jurassic banks and pension dragons to more customer-friendly and modern alternatives. We believe the key lies in creating products offering a high level of customer value. What is good for our customers is also good for Nordnet.
Employees
The average number of employees over the year was 325 (323). The number of full-time positions at year-end was 329 (330).
Risks and uncertainty factors
Nordnet’s operations are influenced by a number of external factors, the effects of which on the Group’s profit and financial position can be controlled to varying degrees. When assessing the Group’s future development, it is important to take into account the risk factors alongside any opportunities for profit growth. The primary risks to Nordnet are credit risks, market risks, liquidity risks and operational risks. Nordnet’s risk management objective is to identify, gauge, control and limit the risks to its operations. For a detailed description of risks and the handling of these, please see Note 7.
Official supervision
Nordnet’s operations are subject to official supervision. Operations are largely regulated by laws, regulations, general advice and industry agreements. Therefore, compliance with rules within the Group is of major significance and is subject to regular inspections and reviews from bodies such as the Board of Directors, the independent review function and the compliance function. The compliance function regularly checks and assess whether the guidelines and instructions established within the operations are appropriate and effective. The compliance function is also tasked with ensuring that Group employees and the Board of Directors are kept informed of applicable rules for the operations conducted. This takes place for example by means of courses concerning new and amended business rules.
Authorizations received
The subsidiary, Nordnet Bank AB, which is subject to supervision by the Swedish Financial Supervisory Authority, is licensed to run banking operations in accordance with the Banking and Finance Business Act (2004:297), to run securities operations in accordance with Chapter 2, Section 1, paragraphs 1-7 of the Securities Market Act (2007:528), to run pension savings operations in accordance with the Individual Pension Savings Act (1993:931), and licensed for registration as a manager of mutual fund units in accordance with the Swedish Investment Funds Act (2004:46). The subsidiary, Nordnet Pensionsförsäkring AB, which is subject to supervision by the Swedish Financial Supervisory Authority, is licensed to run insurance operations in accordance with the Insurance Business Act (2010:2043).
Environmental work
The parent company, Nordnet AB, publishes an annual a corporate responsibility report since 2010 in accordance with the global GRI standard for increased awareness concerning the company’s social, financial and
environmental responsibilities. As most of Nordnet’s operations are run via the Internet most of the company’s environmental impact can be attributed to consumption of electricity. This consumption is mainly incurred through the heating and cooling of offices and for the operations of servers and personnel workstations. Nordnet constantly modernizes its IT equipment, which over the long-term will lead to a reduced environmental impact. In recent years, the IT infrastructure has been optimized and “virtualization” and more efficient servers have been used to reduce the number of hardware components, thus reducing electricity consumption. A new video conferencing system was installed in 2011, and thus has cut the number of journeys between the various markets. The
efficiency of the company’s administration is being continuously enhanced and customer contacts are increasingly digitized. In 2012, the new customer process was made electronic in all countries and it is now possible to become a customer in just 120 seconds with no paper being involved and using electronic ID. In the long term, this
measure will help reduce the consumption of paper and electricity. Dividend policy
Nordnet’s dividend policy involves profits and capital not needed for consolidating, developing and expanding the business being transferred to the shareholders. The long-term share dividend should not be below 40 percent of the profit. The Board of Directors proposes a dividend of SEK 0.70 (0.65) per share for 2012, corresponding to 65 (42) percent of the net profit.
Prior to this, the company’s shares were listed on the Stockholm exchange’s O-list from April 2000. There are a total of 175,027,886 (175,027,886) registered shares. There is only one share type, and the share capital amounts to SEK 175,028 (175,028) thousand with a quotient value of SEK 1 per share. One share provides equal voting rights at the AGM and any possible EGMs. E. Öhman J:or AB was the biggest shareholder in Nordnet on 31 December 2012, with a holding of 30.2 (30.2) percent of share capital and voting rights. The second biggest owner is Premiefinans AB with a holding of 10.4 (10.4) percent.
Buy-back and sale of own shares
The Annual General Meeting decided to authorize the Board to make decisions concerning the respective transfer of shares in the company. This authorization was not utilized over the year. Nordnet owns none of its own shares. Composition of the Board
The 2012 Annual General Meeting decided that the Board shall consist of eight ordinary members and no deputies. The CEO is not part of the Board, but presents reports to it. The company’s General Counsel usually presides as the secretary at the Board meetings. Where necessary, other company officials also present reports. Members of the Board are presented in the Corporate Governance Report. The Articles of Association state that Board members are elected annually by the Annual General Meeting for the period until the end of the next Annual General Meeting. The Articles of Association include no specific regulations on dismissing Board members and amending the Articles of Association.
Board’s proposals for guidelines for remuneration to the CEO and other senior executives
Nordnet AB (publ) has a remunerations committee, which in 2012 consisted of Claes Dinkelspiel and members Ulf Dinkelspiel (committee chairman), Bo Mattson and Bengt Baron. The committee’s job is to review and provide recommendations to the Board on the principles for remuneration to the Group’s senior executives.
The Board proposes the following guidelines for 2013 for determining salaries and other remuneration to the CEO and other corporate executives, currently ten individuals. The objective is for the Company to have a remuneration level and employment conditions required in order to recruit and retain senior executives with the expertise and capacity to achieve set targets. The fixed remuneration will be individual and reviewed annually. In addition, the remuneration levels shall be consistent with and promote effective risk management, shall not encourage excessive risk-taking, shall correspond with the company’s business strategy, objectives, values and long-term interests and shall not, with regards to the total performance-related pay, impede the Company’s ability to maintain a sufficient capital base or when necessary strengthen the capital base.
The 2010, 2011 and 2012 Annual General Meetings decided that variable remuneration may be granted in accordance with the long-term incentive scheme to reward pre-agreed profit performance at Group level. The performance target may be adjusted for events that affect the Nordnet Group’s activities, or the number of outstanding shares in the Company, or that in any other way affect the performance target and is deemed relevant by the Board. The Board proposes for 2013 a continued long-term incentive scheme in accordance with the main principles of previous years’ schemes. The scheme is share-based, includes performance measurement, an upper limit and requires investment by the participants. Remuneration according to the scheme is paid as compensation-free shares. The purpose of the long-term incentive programme is to stimulate continued loyalty and strong performance among key individuals. Furthermore, the Board believes that the incentive scheme increases the Group’s attractiveness as an employer.
Other, non-monetary benefits for corporate executives shall facilitate the executives’ in execution of their work and correspond to what may be considered reasonable in relation to market practice. The Board may deviate from these guidelines if there are special reasons for doing so in individual cases.
corporate governance report
introduction
Nordnet is a Swedish limited company, headquartered in Stockholm. Nordnet shares have been listed on the NASDAQ OMX Stockholm since April 2000. In 2012, the Group ran activities in Sweden, Finland, Norway and Denmark.
The governance of the Group is based, among other things, on the Articles of Association, the Swedish Companies Act, and the regulations of the stock exchange, which include the Swedish Code of Corporate Governance. This Corporate Governance Report has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Code of Corporate Governance. The Swedish Code of Corporate Governance is available at: www.bolagsstyrning.se.
Nordnet has been applying the Code since 1 July 2007.
bodies and regulations
Shareholders
At year-end 2012, Nordnet had 6,744 shareholders, of which 9 percent were resident abroad. The biggest shareholder is E. Öhman J:or AB with 30.2 percent of the voting rights and capital, followed by Premiefinans AB with 10.4 percent and Skagen Kon-Tiki Verdipapirfond with 4.0 percent. At the end of the year, financial and institutional organizations owned 43 percent and private individuals 29 percent. For further information, see page 8.
Annual General Meeting
Shareholders’ right to decide on Nordnet matters is exercised at the Annual General Meeting, which is the company’s highest decision-making body. All shareholders registered in the shareholders’ register and who have announced their intent to participate in time have the right to participate at the meeting and vote according to their shareholding. Some of the obligatory tasks of the AGM include approving and adopting the corporate balance sheet and income statement, deciding on the distribution of earnings, the remuneration principles for the
company’s senior executives and on discharge from liability for the Board members and CEO. Based on proposals by the election committee, the Annual General Meeting elects Board members for the period up to the end of the next Annual General Meeting, as well as auditors and an election committee. Six months before the 2012 Annual General Meeting, the company’s shareholders were notified on www.nordnetab.com of their entitlement to have matters discussed at the meeting.
Election committee
The election committee nominates members of Nordnet’s Board, who are then put forward to the Annual General Meeting. The election committee’s work begins with an evaluation of the incumbent Board. When nominating a future Board, the election committee takes into account the potential members’ strategic expertise, training and any other Board work. The election committee also obtains views from the biggest owners. The election committee submits proposals regarding remuneration to the Board members at the Annual General Meeting. The election committee also submits proposals for remuneration to the auditors and, where appropriate, proposed choice of auditors. Board of Directors
Election committee prior to AGM
Member Shareholding
Fred Wennerholm, chairman 15,000
Olle Isberg 1,672,269
Claes Dinkelspiel1 35,833,194
1 Representing E. Öhman J:or AB (41.1%),
holdings in Premiefinans AB (50%), Gummesson Gruppen AB (100%) and priv ate holding
that guidelines for management of the company’s funds are structured appropriately. The Board is also
responsible for developing and monitoring the company’s strategies by means of plans and targets, decisions on acquisitions and divestments of companies, major investments, recruitment and remuneration to senior executives with regular monitoring of operations over the year. The Board also establishes business plans and annual accounts and monitors the work of the CEO.
Chairman of the Board
The Chairman manages the work of the Board to ensure that this is done in accordance with laws and regulations. The Chairman monitors operations in consultation with the CEO and is responsible for ensuring that other members receive the information they need to maintain high levels of quality in discussions and decisions. The Chairman also takes part in evaluation and development issues concerning the senior executives of the Group.
Composition of the Board
At the 2012 Annual General Meeting it was decided that the Board would consist of eight regular members and no deputies. The CEO is not part of the Board, but presents reports to it. The company’s General Counsel usually presides as the secretary at the Board meetings. Where necessary, other company officials also present reports. The table below includes Board members, along with the Board’s assessment concerning dependence in respect of the company and its shareholders. The Articles of Association state that Board members are elected annually by the Annual General Meeting for the period until the end of the next Annual General Meeting. The Articles of Association include no specific regulations on dismissing Board members and amending the Articles of Association.
Board procedures
The Board procedures are set annually at the Board meeting following election. The Board procedures are reviewed when required. The Board procedures include the Board’s responsibilities and duties, the duties of the Chairman and audit issues, and state which reports and financial information should be received by the Board prior to each ordinary Board meeting. The procedures also include instructions for the CEO. The procedures also prescribe that a remuneration committee, an audit committee and a risk and compliance committee should be elected, plus their duties. The latest applicable procedures were set on 26 April 2012.
Evaluation of the work of the Board
The procedures also state that an annual evaluation of the work of the Board should take place by means of a systematic and structured process. For 2012, the Chairman has ensured that the work of the Board has been evaluated and that the Chairman of the election committee, lawyer Fred Wennerholm, has been notified of the results of the evaluation prior to the nomination work of the election committee for the 2013 Annual General Meeting.
Committees
The overall responsibilities of the Board cannot be delegated, but the Board has established a remuneration committee tasked with preparing issues relating to salaries, remuneration and other terms of employment for the
Board members
Elected Position Dependent position1
Remuneration committee Credit committee Audit committee
Risk & compl.
committee Shareholding2
Claes Dinkelspiel, chairm. 2001 Chairman Gummesson Gruppen, etc Yes Member Member Member 4,801,838 Ulf Dinkelspiel 2001 Chairman ÅF AB, Premiefinans mm. Yes Chairman 5,911,177 Bo Mattsson 2003 CEO Cint AB Member Member Member 10,012 Tom Dinkelspiel 2007 CEO E. Öhman J:or AB, etc Yes Chariman Chairman 5,100,776 Anna Frick 2009 Deputy CEO Garbergs reklambyrå -Kjell Hedman 2010 CEO Landshypotek Member Chairman 3,000 Simon Nathanson 2010 Associated Partner Reforce International Member -Anna Settman 2012 CEO MTG Betal TV Norden
-1Dependent in respect of owners in accordance with the definition in the Swedish Code of Corporate Gov ernance 2Refers to directly held shares
Annual General Meeting. According to the Swedish Code of Corporate Governance, Board members elected by the Annual General Meeting must be independent of the company and its executives. The composition of the audit committee is such that these requirements are met.
The Board has also established an audit committee tasked with preparing the work of the Board with regard to assuring the quality of financial reporting, maintaining on-going contact with the external auditor, proposing guidelines for the Board regarding which services, beyond auditing, that may be procured from the auditor, evaluating audit work and informing the election committee of the results of this evaluation. The committee also assists the election committee in the preparation of proposals regarding auditors and fees for the auditing assignment. The audit committee will consist of Tom Dinkelspiel (Chairman), Claes Dinkelspiel and Bo Mattsson from the Board meeting following election held on 26 April 2012 until the next Annual General Meeting. According to the Swedish Code of Corporate Governance, the majority of the members should be independent in relation to the company and its management and at least one member should be independent in relation to the major shareholders in the company. The composition of the audit committee is such that these requirements are met. The Board has also established a risk and compliance committee tasked with preparing matters for the
consideration of the Board and which, in its work, shall, through dialogue with the independent reviewer, the risk manager, the compliance officer and Group Management, monitor the structure, compliance (regulatory
adherence), risk and incident reporting of the organization and its operations and enhance the Board’s access to information regarding these aspects. The risk and compliance committee shall propose an audit plan for the internal audit (independent review) to the Board and it shall scrutinize independent reviews and report on these to the Board. The risk and compliance committee will comprise of Kjell Hedman (Chairman), and Simon Nathanson effective from the Board meeting following election held on 26 April 2012 until the next Annual General Meeting. The Board’s credit committee is tasked with determining and preparing the limits that are the Board’s responsibility according to the instructions in the Board procedures, as well as preparing the annual reporting of the limits set by the Board. The credit committee is made up of Tom Dinkelspiel (Chairman), Claes Dinkelspiel and Bo Mattsson. CEO and Group Management
The CEO manages operations within the framework established by the Board. The most recently established instructions for the CEO were set by the Board on 26 April 2012. The CEO produces the requisite information and decision data prior to Board meetings, presents issues and justifies proposals for decisions. The Chairman of the Board holds annual evaluation talks with the CEO in accordance with the instructions for the CEO and the requirement specifications.
The CEO manages the work of senior executives and makes decisions in consultation with other executive members.
Senior executives hold weekly meetings at which they discuss operational issues. In addition, senior executives produce business plans each year, which are followed up via monthly reports. In addition to these weekly meetings the senior executives meet on a daily basis. The company’s rapid development means that the daily contact is a condition for functional control and management. Senior executives consist of managers of essential business areas within the Nordnet Group, see organizational chart.
Auditors
At the 2012 Annual General Meeting, accounting firm Ernst & Young was appointed auditor of Nordnet AB and all subsidiaries until the end of the Annual General Meeting 2013. The auditors’ task is to review the annual accounts, consolidated accounts and accounting, plus the administration by the Board and CEO. The auditors report back on their findings on a number of occasions over the year and are present at the Board meetings that deal with annual accounts. The auditors also have continuous contact with the audit committee.
Internal audit
In accordance with the Board’s procedures and procedures for the subsidiaries, Nordnet Bank AB and Nordnet Pensionsförsäkring AB and the regulations of the Swedish Financial Supervisory Authority, the Board has
appointed an independent review function/internal audit which is directly subordinate to the Board. The work of this independent review function will be based on a review plan established annually by the Board. This review will involve assessment of internal auditing within the company and an assessment of its appropriateness. Auditing company Deloitte has acted as the independent reviewer since late 2007.
Board control of financial reporting
The Board monitors the quality of financial reporting in a number of ways. One method is by issuing instructions to the CEO. According to these instructions, the CEO is responsible for reviewing and ensuring the quality of all financial reporting, and for ensuring that the Board in general receives the reports required in order for it to continually assess the Group’s financial position.
The internal reporting and control system is based on annual financial planning, monthly reports and daily checks of business-related key figures. The CEO is also responsible for other financial information, such as ensuring that press releases and presentation material are correct and of good quality. The CEO’s instructions state the issues on which the CEO is permitted to exercise his authority to represent the company only after authorization by the Board.
The Group works with internal control in accordance with the principles associated with the three lines of defence. The assessment of the efficiency of internal control is largely conducted by the independent control functions. These consist of the Risk Control function, the Compliance function and the independent reviewers who monitor adherence to internal and external regulations and risk limits. The tasks performed by the audit committee ensure that the financial reports maintain a high standard. The Board follows up and assesses this quality assurance by receiving monthly reports on the company’s earnings trend, credit and risk exposure and relevant sector data and by addressing the Group’s financial situation at each ordinary Board meeting.
In 2012, three out of the four interim reports were subject to review by the company’s auditors. The Group’s auditors report their findings from the audit to the entire Board, partly in connection with their on-going review over the year and partly in connection with the compilation of the annual accounts. In addition, the Board meets the company’s auditors at least once a year – without the presence of the executive management team – to learn about the focus and scope of the audit, and to discuss coordination between the external and internal audits and views of the company’s risks. The auditor gives a presentation and receives viewpoints from the Board regarding the focus and scope of the audit.
work over the year
Annual General Meeting 2012
Nordnet’s 2012 Annual General Meeting was held on 26 April 2012. Claes Dinkelspiel was elected Chairman of the meeting. The Annual General Meeting made the following decisions:
• a dividend of SEK 0.70 per share to be paid to shareholders for 2011
• the Board shall have eight regular members and no deputies
The minutes of the Annual General Meeting are available at www.nordnetab.com. Election committee
In 2011 and 2012, the election committee held three meetings and a number of teleconferences. This work was for evaluating and proposing new Board members prior to the 2012 Annual General Meeting.
For the election committee’s proposals for the 2012 Annual General Meeting, see the notice to attend at Attendance at the AGM
2012 75.1%
2011 68.2%
2010 61.7%
Board of Directors
The Board held 11 meetings over the year, excluding meetings conducted by letter or e-mail. Of these meetings two were held as teleconferences based on documentation that had been distributed in advance. In addition, four meetings were by letter or e-mail.
The large number of meetings is typical of a growth company such as Nordnet. The work of the Board takes place at an intensive pace in order to support the CEO and other senior executives. At each meeting, the Board discussed a number of issues relating to strategic and business-related areas. Over the year, Nordnet officials have also taken part in Board meetings by providing reports. Every month, the Board receives a report on the company’s earnings trend, credit and risk exposure and relevant industry data. The favourable long-term growth is partly the result of very active cooperation between the Board and senior executives.
See the table of Board meetings for decisions made in 2012. For information about Board members, see the section Board of directors and auditors.
Remuneration committee
The remuneration committee is made up of Ulf Dinkelspiel (Chairman), Claes Dinkelspiel, Kjell Hedman and Bo Mattsson. This committee has, in the usual manner, dealt with issues relating to salaries and other terms of employment for the CEO and guidelines for remuneration for other senior executives. It has also paid particular attention to issues relating to a new performance-related incentive scheme for key employees, approved by the
Board meetings 2012
Meeting Topics discussed
January Recruitment process for new CEO started. February
Ordinary matters. Year-end report from prev ious year. Desicion on suggested div idend. Report from auditor regarding rev iew of year-end report 2011. Recruitment process for new CEO.
March Ordinary matters. Notice of AGM.
April (before and after AGM) Ordinary matters. Decisions on the members of the board committees, the Rules of procedure etc. Q1 results.
June Ordinary matters. Strategy. July Q2 results. Starting date new CEO. September Ordinary matters. Strategy.
October Ordinary matters. Q3 results. Sell of Burgundy.
December Ordinary matters, determining of business plan, budget and internal capital dev elopment.
Attendance 2012
Board meetings Remuneration
committee Credit committee Audit committee Risk and compliance committee Claes Dinkelspiel 11 of 11 3 of 3 4 of 4 4 of 4 Bengt Baron* 3 of 11 2 of 3 Tom Dinkelspiel 11 of 11 4 of 4 4 of 4 Ulf Dinkelspiel 11 of 11 3 of 3 Anna Frick 10 of 11 Kjell Hedman** 10 of 11 1 of 3 7 of 7 Bo Mattsson 10 of 11 3 of 3 4 of 4 3 of 4 Simon Nathanson 11 of 11 7 of 7 Anna Settman*** 7 of 11
* resigned from the board during 2012
** elected to the remuneration committee during 2012 *** elected to the board during 2012
Credit committee
The Board’s credit committee is tasked with determining and preparing the limits that are the Board’s responsibility according to the instructions in the Board procedures, as well as preparing the annual reporting of the limits set by the Board. The credit committee is made up of Tom Dinkelspiel (Chairman), Bo Mattsson and Claes Dinkelspiel. Audit committee
The audit committee is made up of Tom Dinkelspiel (Chairman), Claes Dinkelspiel and Bo Mattsson. The committee has prepared the work of the Board regarding quality assurance of financial reporting and maintained constant contact with the auditor. The committee held four meetings over the year.
Risk and compliance committee
The risk and compliance committee is made up of Kjell Hedman (Chairman), and Simon Nathanson. The committee is tasked with monitoring and providing the Board with greater access to information concerning compliance, risk and incident reporting of the organization and its operations. The committee held eight meetings over the year.
CEO
Since 9 August 2012, Nordnet’s CEO is Håkan Nyberg, formerly CEO of EnterCard International. Until then and from 1 January 2012, the company’s CFO Jacob Kaplan was the acting CEO.
Corporate executive
Changes have been made to the corporate executive over the year. At year-end the corporate executive consisted of ten individuals: Håkan Nyberg, Jan Dinkelspiel, Max Gandrup, Jacob Kaplan, Niklas Odenwall, Martin Sandén, Anders Skar, Johan Tidestad, Carina Tovi and Maino Öhrn. The corporate executive at the close of the year is presented in the Management section below. The corporate executive held 45 minuted meetings over the year, under the management of the CEO.
Audits and auditors
At the 2012 Annual General Meeting, accounting firm Ernst & Young was re-appointed as Nordnet’s and all subsidiaries’ auditor until the 2013 Annual General Meeting. Authorized public accountant Peter Strandh, born 1955, has been the company’s principal auditor since 2010. Peter Strandh also has audit assignments for If Skadeförsäkring, LRF, AP-fonderna, Kommuninvest i Sverige and Ålandsbanken.
remunerations
Remuneration to the Board of Directors
The 2012 Annual General Meeting decided that the total remuneration for Board members for the current year should be SEK 1,800,000, of which SEK 400,000 to the Chairman and SEK 200,000 to each ordinary member. In addition, a fee of SEK 50,000 will be paid to each Board member for every committee in which they participate. Remuneration to the CEO and corporate executive
Remuneration for the CEO and other members of the corporate executive team is made up of fixed remuneration, variable remuneration, pension and other benefits.
Fixed remuneration is individual and takes into consideration the individual executive’s areas of responsibility, experience, performance and results achieved. Nordnet is a valuation-governed company, which is why
performance is also valued in relation to the company’s values. Fixed remuneration is reviewed annually. For 2012, fixed remuneration to CEO Håkan Nyberg amounted to SEK 330,000 per month. In addition, remuneration was paid to former CEO Carl-Viggo Östlund and acting CEO Jacob Kaplan. For further information, see Note 12. Variable remuneration can be paid according to a long-term performance-related share incentive scheme to reward, in advance, agreed results-based performance goals at Group level and considering risk-adjusted performance at team level and individual level. The long-term incentive scheme is share-based, has results
With the exception of the CEO, Nordnet has the same pension policy for senior executives as for other employees. The pension plan is premium-based. The premium for service pension insurance is based on age, salary and the base amount that appears for each applicable premium plan. Pension allocations for the CEO are equivalent to 35 percent of the pensionable salary for 2012. A pensionable salary is fixed remuneration including holiday remuneration.
The mutual notice period for the CEO is six months. The CEO will be entitled to severance pay equivalent to 12 months’ fixed remuneration if dismissed by the company. Severance pay is also applicable if the CEO’s employment is terminated as a consequence of a public buy-out bid concerning shares in the company. For other senior executives, the employee is obliged to give a period of notice of six months and the company is obliged to give a period of notice of between three and nine months. There are no special benefits for senior executives apart from company cars, which are cost-neutral for the employer and paid healthcare insurance.
Performance-related share incentive scheme
In accordance with decisions by the Annual General Meetings of 22 April 2010, 28 April 2011 and 26 April 2012, Nordnet has established three long-range performance-related share incentive programmes: “Performance-Related Share Programme 2010”, “Performance-“Performance-Related Share Programme 2011” and “Performance-“Performance-Related Share Programme 2012”, covering about 20 people including the CEO.
Employees who participate in the Performance-Related Share Programmes for 2010, 2011 respective 2012 can set aside an amount corresponding to a maximum 5 percent of their gross remuneration to buy Nordnet shares on NASDAQ OMX Stockholm during a 12-month period from the implementation of each programme. If the shares purchased are retained by the employee for at least three years after purchase, if the employee has been employed within the Nordnet group during the entire three-year period and if the pre-agreed earnings-based performance targets at Group level are achieved, the employee will have the right to a compensation-free matching of those shares according to a predetermined amount.
Due to the Performance-Related Share Programmes 2010, 2011 and 2012, the 2012 Annual General Meeting decided to authorize the Board to carry out acquisition and transfer of shares in Nordnet AB (publ) on NASDAQ OMX Stockholm. This authorization may be exercised on one or more occasions before the Annual General Meeting in 2013. A maximum of 733,500 shares may be acquired in order to ensure delivery of shares to participants in Performance-Related Share Programmes 2010, 2011 and 2012. Of these, a maximum of 169,600 shares may be purchased and transferred in order to cover general payroll taxes and other costs related to the programmes. The purpose of the long-term incentive schemes is to stimulate continued loyalty and strong performance among key individuals. Additionally, the Board takes the view that the incentive schemes increase the Group’s attractiveness as an employer in preparation for future recruitment of key personnel. The Board also intends to propose to the Annual General Meeting a long-term incentive scheme for 2013, in accordance with the established principles. For more information, please see Note 12.
Remuneration to auditors
A total of SEK 3,872(3,735) thousand was paid to auditors and audit firms in 2012. This amount relates to audits, advice and other review work linked with auditing. Remuneration has also been paid for other advice, of which most was for relates to consultation concerning accounting and tax issues. For more information, please see Note
Remuneration to CEO and corporate executive 2012
SEK thousands Fixed Variable Benefits Pension expenses Total
CEO, Håkan Nyberg (from 9 Aug 2012) 2012 1,617 - 1 547 2,165
2011 - - - -
-Act. CEO, Jacob Kaplan (1 Jan 2012 - 8 Aug 2012) 2012 957 - - 156 1,113
2011 - - - -
-Former CEO, Carl-Viggo Östlund (until 31 Dec 2011) 2012 1,459 - 3 - 1,462
2011 4,544 - 13 1,537 6,094
Other corporate executiv e 2012 8,388 - 65 1,420 9,873
internal control
The Board’s internal control report in accordance with the Swedish Code of Corporate Governance and chap. 6, Section 6, Paragraph 2 of the Swedish Annual Accounts Act (1995:1554).
Internal control of financial reporting is defined as the process, carried out by the Board, management and other relevant personnel, serving to establish reasonable assurance of the accuracy of financial reporting. Internal control work regarding financial reporting is structured around the five internal control components detailed below – control environment, risk assessment, control activities, information and communication, and monitoring. This report deals only with internal control regarding financial reporting.
Control environment
Good internal controls are based on a formulated, structured inspection environment in which a clear division of responsibilities and the principal of duality are fundamental principles. Steering documents in the form of policies, guidelines and instructions are established by the Board. This also applies to the ethical guidelines that are communicated to all employees and that form the basis of a favourable control environment. Nordnet’s independent control functions consist of Risk Control, Compliance & Surveillance and the independent review function.
To enhance this ambition and awareness of, for example, ethics in professional roles and compliance with rules, and to enhance the quality of work done, all employees in the Swedish market are offered the opportunity to be licensed by SwedSec. At year-end 2012 there were 67 licensed employees.
Risk assessment and control activities
Nordnet constantly assesses the risks in its financial reporting; i.e. it identifies, analyzes and assesses the principal risks of misstatement in the financial reports. The identification, analysis and assessment takes into account aspects including the complexity of business operations, the level of systems support and the quality of procedures and controls.
Review and analysis play a central role, in which cumulative effects are also analyzed. The control activities serve to detect, guard against and limit risks and the assumption of risks in operations while also preventing deviations and errors in financial reporting.
Information and Communication
Nordnet’s Board has set policies, guidelines and routines to safeguard its financial reporting. These are made available and kept updated via Nordnet’s intranet. Knowledge and awareness of these are obtained by means of on-going internal training and information for the various departments and functions covered by internal reporting responsibility in respect of financial statistics and information.
Follow-up and monitoring of control operations
The content of policies, guidelines and procedures is evaluated and updated as required. Responsibility for maintaining current documents and communicating these rests with the Board for the general steering documentation and with the relevant departmental managers for other documents.
Nordnet applies the Swedish Financial Supervisory Authority’s regulations concerning securities operations (FFFS 2007:16) and the Swedish Financial Supervisory Authority’s general recommendations on the control and
management of financial companies (FFFS 2005:1). In accordance with these, Nordnet will have an internal audit function. Nordnet’s internal audit is made up of the independent review function. The Board has appointed an external party, Deloitte AB, to perform the independent review and the independent review function works according to the annual review plan adopted by the Board annually. Recommendations from external and internal auditors are reported to management and the Board and recommendations from previous years are followed up during subsequent reviews.
board of directors and auditors
Claes Dinkelspiel, Chairman
Born 1941. B.Sc. from the Stockholm School of Economics, MBA Insead, France.
Chairman of the Board of Gummesson Gruppen AB, MPS Holding AB Premiefinans K. Bohlin AB and SCI. Board member of Gundua Foundation, Intellecta AB, Prevas AB and the Silviahemmet Foundation.
Board member since 2001, member of the election committee, remuneration committee, audit committee and credit committee
Shareholding on 31 December 2012 (direct): 4,801,838 Shareholding (indirect*): 71,317,411 Tom Dinkelspiel
Born 1967. Studies at the Stockholm School of Economics.
CEO and Board member of E. Öhman J:or AB (parent company of the Öhman Group), Board member and in some cases chairman of companies included in the Öhman Group. Chairman of 11 Real Asset Fund AB and 11 Real Asset Fund Investors AB. Board member of MPS Holding AB.
Board member since 2007, chairman of the audit committee
Shareholding (direct): 5,100,776 Shareholding (indirect*): 53,761,083 Ulf Dinkelspiel
Born 1939. B.Sc. (Econ.) from the Stockholm School of Economics.
Ambassador. Chairman of ÅF AB Board member of Premiefinans K. Bohlin AB, Ponte Fiore AB plus Bockholmen Hav och Restaurang AB. Member of IVA.
Board member since 2001, chairman of the remuneration committee Shareholding (direct): 5,911,177 Shareholding (indirect*): 73,111,365 Anna Frick
Born 1968. MBA from the Stockholm School of Economics.
Executive Vice President of Garbergs advertising agency, former Head of Creative at Adamsky Agency and former COO at communications agency Farfar AB.
Board member since 2009 Shareholding (direct) : - Kjell Hedman
Born 1951. B.Sc. (Econ.)
CEO of Landshypotek AB, former Chairman of Swedbank Hypotek, Swedbank Försäkring and Swedbank Finans. Board member of Visa Europe.
Board member since 2010, chairman of the risk and compliance committee, member of the remunerations committee.
Shareholding (direct): 3,000 Bo Mattsson
Born 1960. B.Sc. (Econ.) from the Stockholm School of Economics.
Founder and CEO of CINT AB (Cint.com). Founded Eurotrade and Mangold AB, former CEO of Nordnet Holding. Board member of Eyetrackshop AB.
Board member since 2003, member of the remuneration committee, audit committee and credit committee Shareholding (direct): 10,012
Simon Nathanson Born 1960.
Associated Partner at Reforce International. Former President and CEO of Neonet. Board member since 2010, member of the risk and compliance committee
Shareholding (direct): - Anna Settman
Born 1970. Communications at Berghs School of Communications and IFL at the Stockholm School of Economics. CEO of MTG Betal TV Norden. Former CEO of Aftonbladet Hierta AB.
Board member since 2012 Shareholding (direct): - Auditors
Audit firm Ernst & Young Auditor since 2004. Principle auditor Peter Strandh, Authorized Public Accountant. Born 1955.
* Refers to shareholding by related physical or legal entities. Where holding pertains to a related legal entity, the legal entity’s entire holding is reported.
management
Håkan Nyberg* CEO
Born 1959. Master’s Degree in Applied Mathematics from the Royal Institute of Technology. Employed since 2012. Former CEO of EnterCard International and prior to that, head of Swedbank’s (then Föreningssparbanken’s) Internet banking activities.
Shareholding on 31 December 2012 (direct): 2,874 Jan Dinkelspiel***
Country General Manager Sverige
Born 1977. Bachelor’s degree in economics from Stockholm University and a Master’s degree in Business Administration, Football Industries from Liverpool University. Employed since 2008. Former Country General Manager for Nordnet Finland. Previously employed by Hi3G and SEB.
Shareholding (direct): 1,978,293 Shareholding (indirect**): 10,000 Max Gandrup***
Country General Manager Denmark
Born 1967. Studied at Copenhagen Business College. Employed since 2000. Board member of Nordnet Pensionsförsäkring AB. Formerly employed by Midtbank.
Shareholding (direct): 6,106 Jacob Kaplan*
Chief Financial Officer
Born 1973. M.Sc. (Econ.) and B.Sc. (Econ.) Employed since 2010. Formerly employed by NASDAQ OMX and Ernst & Young Management Consulting.
Shareholding (direct): 18, 283 Niklas Odenwall***
Country General Manager Finland
Born 1971. Master’s degree in Politics, majoring in economics from Åbo Academy. Employed since 2011. Former CEO of Infonet Finland and has worked as a stockbroker at Conventum Securities.
Shareholding (direct): 2,048 Martin Sandén
Chief Information Officer
Born 1959. B.Sc. (Econ.) Employed since 2011. Formerly employed by EFG/Quesada, SEB and KPA Pension. Shareholding (direct): 12, 902
Anders Skar***
Country General Manager Norway
Born 1976. Graduate Economist from the Norwegian School of Economics. Employed since 2005. Formerly employed by Accenture.
Shareholding (direct): 10,967 Johan Tidestad
Chief Communications Officer
Born 1968. LL.M. from Uppsala University. Employed since 2007. Formerly employed by Bergsgård Petersson Fonder AB and E-Trade Sverige.
Carina Tovi
Chief Administration Officer
Born 1965. B.Sc. (Econ.) from the Stockholm School of Economics. Employed since 2011. Formerly employed by Swedbank Robur Fonder, among others.
Shareholding (direct): 1, 489 Maino Öhrn***
Acting Head of Human Resources
Born 1945. Graduate Engineer and training in HR management. Employed since 2012. Formerly employed by Swedbank Robur AB and Öhrn & Partner.
Shareholding (direct): –
* As of 1 January 2012 and until H
