Accounting policy
Defined contribution plans
The pension cost related to the Group’s defined contribution plans is equal to the annual contribution made
to the employee’s individual pension accounts in the accounting period. Annual contributions correspond to
an agreed percentage of the employee’s salary in accordance with local pension arrangements. In Norway, the
rate is five per cent of annual basic salary, limited upwards to twelve times the social security basic amount.
In addition, 18.1 per cent contribution is made for annual basic salary between 7.1-12 times the social security
basic amount. The pension contributions are expensed when incurred. The return on the pension funds will
affect the size of the employees’ pension, and the risk of returns lies with the employees.
Defined benefit plans
In the defined benefit plans, the Group companies are responsible for paying an agreed pension to the
employee based on his or her final pay. Defined benefit plans are valued at the present value of accrued future
pension obligations at the end of the reporting period. Pension plan assets are valued at their fair value. The
capitalised net liability is the sum of the accrued pension liability minus the fair value of the associated pension
fund asset.
Actuarial gains and losses are recognised in other comprehensive income. Introduction of new or changes
to existing defined benefit plans that will lead to changes in pension liabilities are recognised in the income
statement as they occur. Gains or losses linked to changes or terminations of pension plans are also recognised
in the income statement when they arise.
Other severance schemes
Other severance schemes comprise mainly of obligations related to pension schemes for employees in the
Norwegian companies with an annual basic salary exceeding 12 times the basic amount (G). In addition, minor
statutory obligations to employees in a few other countries are also included. Obligations related to other
severance schemes are recognised as non-current liabilities.
Estimate and judgement
Defined benefit plans are calculated based on a set of selected financial and actuarial assumptions. Changes
in parameters such as discount rates, future wage adjustment, etc. could have a substantial impact on the
estimated pension liability. Similarly, changes in selected assumptions for the return on pension assets could
affect the amount of the pension assets. The Group will not be materially affected by a reasonable expected
change in key assumptions.
All assumptions are reviewed at each reporting date.
5.3 REMUNERATIONS
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Jotun Group
Remuneration of the President & CEO
(NOK thousand) Ordinary salary Bonus Benefits in kind Pension cost Total
President & CEO 5 630 2 586 207 2 573 10 996
The President & CEO is part of a pension scheme that includes a mutual opportunity to discontinue employment in
whole or in part up to five years earlier than a stipulated retirement age of 67 years.
The Group has no obligation to give the President & CEO or the Chairman of the Board of Directors special
remuneration upon discontinuance or change of employment or office. Should the President & CEO’s employment
discontinue, his contract has a clause stipulating that a one-year “competition quarantine” may be imposed with
compensation. The President & CEO has a notice period of six months.
The Group has not given any loans or guarantees to the President & CEO, the Chairman of the Board, or to any
shareholders or members of Group Management, the Board of Directors or Corporate Assembly.
Remuneration of the Board of Directors and Corporate Assembly
(NOK thousand) 31.12.2020 31.12.2019
Board of Directors 2 840 3 384
Corporate Assembly 195 173
Total 3 035 3 557
Shares controlled by members of the Board of Directors and the Group Management are specified in Note 5.8.
External auditor remuneration
(NOK thousand) 31.12.2020 31.12.2019
Statutory audit 13 739 14 111
Other attestation services 426 229
Tax services 3 884 3 085
Other services 1 076 2 182
Total 19 126 19 607
Jotun Annual Report 2020 I 41