STOCKHOLM, Feb. 22,
2023 /PRNewswire/ -- The Annual General Meeting
of shareholders of Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC)
will be held on Wednesday, March 29,
2023 at 3 pm.
The Nomination Committee proposes among other things:
- Jonas Synnergren and Christy
Wyatt as new members of the Board and that Jan Carlson is elected as new Chair of the Board
(item 9 and 11)
- Increase of the Board fees, the fees to the Chair of the Board,
and the fees for work on all of the Committees of the Board
(including Chair of the respective Committee)
(item 10).
The Board of Directors proposes among other things:
- A dividend of SEK 2.70 per share,
to be paid in two equal installments (item 8.4).
- A Long-Term Variable Compensation Program for the Executive
Team, with a one-year Group EBITA (operating income) target for
2023, three-year total shareholder return targets, all targets with
a three-year vesting period (item 16).
- A Long-Term Variable Compensation Program for Executives, with
a one-year Group EBITA (operating income) target for 2023,
three-year total shareholder return targets, all targets with a
three-year vesting period (item 17).
- Transfer of treasury stock to employees and on an exchange,
directed share issue and authorization for the Board of Directors
to decide on an acquisition offer in relation to the Long-Term
Variable Compensation Programs 2022 and 2021 (item 18 and 19).
- Transfer of treasury stock on an exchange in relation to the
Long-Term Variable Compensation Programs 2020 and 2019 (item
20).
- Resolution on new Guidelines for Remuneration to Group
Management (item 21).
Notice of the Annual General Meeting of shareholders 2023 of
Telefonaktiebolaget LM Ericsson
The shareholders of Telefonaktiebolaget LM Ericsson (reg. no
556016-0680) ("Company" or "Ericsson") are invited to
participate in the Annual General Meeting of shareholders
("AGM") to be held on Wednesday,
March 29, 2023 at 3 p.m. CEST
at Kistamässan, Arne Beurlings Torg 5, Kista/Stockholm. Registration to the AGM starts at
1.30 p.m. CEST.
The Board of Directors has decided to allow shareholders to
exercise their voting rights by post before the AGM in accordance
with the articles of association of the Company.
The AGM will be conducted in Swedish and simultaneously
translated into English.
Registration and notice of participation
Participation in person
Shareholders who wish to attend the meeting venue in person or
by proxy must:
- be recorded as a shareholder in the presentation of the share
register prepared by Euroclear Sweden AB, concerning the
circumstances on Tuesday, March 21,
2023; and
- give notice of participation to the Company at the latest on
Thursday, March 23, 2023
-
- by telephone +46 (0)8 402 90 54 on weekdays between 10 a.m. and 4 p.m. CET;
- by post to Telefonaktiebolaget LM Ericsson, AGM, c/o Euroclear
Sweden AB, Box 191, SE-101 23 Stockholm,
Sweden;
- by e-mail to GeneralMeetingService@euroclear.com; or
- via Ericsson's website www.ericsson.com.
When giving notice of participation, please state name, date of
birth or registration number, address, telephone number and number
of participating assistants, if any.
Proxy
If the shareholder is represented by proxy, a written and dated
power of attorney signed by the shareholder, shall be issued for
the representative. A power of attorney issued by a legal entity
must be accompanied by the entity's certificate of registration (or
a corresponding document of authority). In order to facilitate the
registration at the AGM, the power of attorney, certificate of
registration and other documents of authority should be sent to the
Company well in advance of the AGM, but no later than March 23, 2023 to the address above. Forms of
power of attorney in Swedish and English are available on
Ericsson's website, www.ericsson.com.
Participation by postal voting
Shareholders who wish to participate in the AGM by postal voting
must:
- be recorded as a shareholder in the presentation of the share
register prepared by Euroclear Sweden AB, concerning the
circumstances on Tuesday, March 21,
2023; and
- give notice of participation no later than Thursday, March 23, 2023, by casting its postal
vote in accordance with the instructions below so that the postal
voting form is received by Euroclear Sweden AB no later than that
day.
A special form must be used for the postal vote. The form for
postal voting is available on Ericsson's website www.ericsson.com.
Completed and signed forms for postal voting can be sent by post to
Telefonaktiebolaget LM Ericsson, AGM, c/o Euroclear Sweden AB, Box
191, SE-101 23 Stockholm, Sweden,
or by e-mail to GeneralMeetingService@euroclear.com. Shareholders
may also cast their votes electronically through verification with
BankID via Ericsson's website, www.ericsson.com. Postal votes must
be received by the Company/Euroclear Sweden AB no later than
Thursday, March 23, 2023.
The shareholders may not provide special instructions or
conditions in the postal vote. If so, the entire postal vote is
invalid. Further instructions and conditions may be found in the
form for postal voting and at Ericsson's website,
www.ericsson.com.
If the shareholder submits its postal vote by proxy, a written
and dated power of attorney signed by the shareholder must be
attached to the postal voting form. If the shareholder is a legal
entity, the entity's certificate of registration (or a
corresponding document of authority) shall also be enclosed with
the form. Forms of power of attorney in Swedish and English are
available on Ericsson's website, www.ericsson.com.
A shareholder who has voted by post may also attend the meeting
venue, provided that the notification has been made in accordance
with the instructions under the heading Registration and notice
of participation – participating in person above.
Shares registered in the name of a nominee
In order to be entitled to participate in the AGM, a shareholder
whose shares are registered in the name of a nominee must, in
addition to giving notice of participation in the AGM, register its
shares in its own name so that the shareholder is listed in the
presentation of the share register of the Company as of
Tuesday, March 21, 2023. Such
re-registration may be temporary (so-called voting rights
registration), and request for such voting rights registration
shall be made to the nominee, in accordance with the nominee's
routines, at such a time in advance as decided by the nominee.
Voting rights registrations that have been made by the nominee
no later than Thursday, March 23, 2023 will be considered in
the presentation of the share register.
Processing of personal data
For information regarding the processing of personal data in
connection with the AGM, please see the integrity policy on
Euroclear Sweden AB's website:
https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf
Proposed agenda
- Election of the Chair of the AGM
- Preparation and approval of the voting list
- Approval of the agenda of the AGM
- Determination whether the AGM has been properly convened
- Election of two persons approving the minutes
- Presentation of the annual report, the auditor's report, the
consolidated accounts, the auditor's report on the consolidated
accounts, the remuneration report and the auditor's report whether
the guidelines for remuneration to group management have been
complied with, as well as the auditor's presentation of the audit
work with respect to 2022
- The President's and CEO's speech. Questions from the
shareholders to the Board of Directors and the management
- Resolution with respect to
- adoption of the income statement and the balance sheet, the
consolidated income statement and the consolidated balance
sheet;
- adoption of the remuneration report;
- discharge of liability for the members of the Board of
Directors and the President for 2022; and
- the appropriation of the results in accordance with the
approved balance sheet and determination of the record dates for
dividend
- Determination of the number of Board members and deputies of
the Board of Directors to be elected by the AGM
- Determination of the fees payable to members of the Board of
Directors elected by the AGM and members of the Committees of the
Board of Directors elected by the AGM
- Election of Board members and deputies of the Board of
Directors
The Nomination Committee's proposal for Board members:
- Jon Fredrik Baksaas (re-election)
- Jan Carlson (re-election)
- Carolina Dybeck Happe
(re-election)
- Börje Ekholm (re-election)
- Eric A. Elzvik (re-election)
- Kristin S. Rinne
(re-election)
- Helena Stjernholm
(re-election)
- Jacob Wallenberg
(re-election)
- Jonas Synnergren (new election)
- Christy Wyatt (new
election)
- Election of the Chair of the Board of Directors
- Determination of the number of auditors
- Determination of the fees payable to the auditors
- Election of auditors
- Long-Term Variable Compensation Program I 2023 ("LTV
I 2023")
- Resolution on implementation of the LTV I 2023
- Resolution on transfer of treasury stock to employees and on an
exchange, directed share issue and acquisition offer for the LTV I
2023
- Resolution on Equity Swap Agreement with third party in
relation to the LTV I 2023
- Long-Term variable Compensation Program II 2023 ("LTV II
2023")
- Resolution on implementation of the LTV II 2023
- Resolution on transfer of treasury stock to employees and on an
exchange, directed share issue and acquisition offer for the LTV II
2023
- Resolution on Equity Swap Agreement with third party in
relation to the LTV II 2023
- Resolution on transfer of treasury stock to employees and on an
exchange, directed share issue and acquisition offer in relation to
the earlier resolution on the Long-Term Variable Compensation
Program 2022 ("LTV 2022")
- Resolution on transfer of treasury stock to employees and on an
exchange, directed share issue and acquisition offer in relation to
the earlier resolution on the Long-Term Variable Compensation
Program 2021 ("LTV 2021")
- Transfer of treasury stock in relation to the resolutions on
the Long-Term Variable Compensation Programs 2019 and 2020 ("LTV
2019" and "LTV 2020")
- Resolution on transfer of treasury stock on an exchange to
cover expenses
- Resolution on transfer of treasury stock on an exchange to
cover costs for tax and social security liabilities for the
Participants
- Resolution on new Guidelines for Remuneration to Group
management
- Closing of the AGM
Item 1 Chair of the AGM
The Nomination Committee, appointed in accordance with the
Instruction for the Nomination Committee resolved by the AGM 2012,
is composed of the Chair of the Committee Johan Forssell (Investor AB), Karl Åberg (AB
Industrivärden), Anders Oscarsson
(AMF Tjänstepension & AMF Fonder), Niko Pakalén (Cevian Capital
Partners Limited) (replaced Jonas Synnergren on December 9, 2022) and Ronnie Leten (Chair of the
Board of Directors). The Nomination Committee proposes that Advokat
Eva Hägg be elected Chair of the AGM.
Item 2 Preparation and approval of the voting list
The voting list proposed for approval is the voting list drawn
up by Euroclear Sweden AB on behalf of the Company, based on the
AGM's register of shareholders, shareholders having given notice of
participation and being present at the meeting venue and postal
votes received.
Item 8.4 Dividend and record dates
The Board of Directors proposes a dividend to the shareholders
of SEK 2.70 per share. The dividend
is proposed to be paid in two equal installments, SEK 1.35 per share with the record date
March 31, 2023, and SEK 1.35 per share with the record date
September 29, 2023. Assuming these
dates will be the record dates, Euroclear Sweden AB is expected to
disburse SEK 1.35 per share on
April 5, 2023, and SEK 1.35 per share on October 4, 2023.
Item 9 Number of Board members and deputies to be elected by
the AGM
According to the articles of association, the Board of Directors
shall consist of no less than five and no more than twelve Board
members, with no more than six deputies. The Nomination Committee
proposes that the number of Board members elected by the AGM shall
be ten (previously eleven) and that no deputies be elected.
Item 10 Fees payable to members of the Board of Directors
elected by the AGM and to members of the Committees of the Board of
Directors elected by the AGM
The Nomination Committee proposes that fees to non-employee
Board members elected by the AGM and non-employee members of the
Committees of the Board of Directors elected by the AGM be paid as
follows:
- SEK 4,500,000 to the Chair of the
Board of Directors (previously SEK
4,375,000);
- SEK 1,140,000 to each of the
other Board members (previously SEK
1,100,000);
- SEK 495,000 to the Chair of the
Audit and Compliance Committee
(previously SEK 475,000);
- SEK 285,000 to each of the other
members of the Audit and Compliance Committee
(previously SEK 275,000);
- SEK 210,000 to each Chair of the
Finance, the Remuneration and the Technology and Science Committee
(previously SEK 205,000);
and
- SEK 185,000 to each of the other
members of the Finance, the Remuneration and the Technology and
Science Committee (previously SEK
180,000).
The Nomination Committee considered the Board fees with the
objective of ensuring that they allow for the recruitment and
retention of high quality individuals while also being appropriate
in comparison to other technology companies operating globally and
with similar size and complexity. As such, the Nomination Committee
has concluded that an increase of the fees to all members of the
Board and Board Committees, including their Chairs, in accordance
with the above is reasonable, well-justified and in the best
interests of the Company. The proposal of the Nomination Committee
provides for an increase of the fees of approximately 3.3%[1]
compared with the total fees to the corresponding number of Board
and Committee members for Board and Committee work resolved by the
Annual General Meeting 2022.
Fees in the form of synthetic shares
Background
The Nomination Committee believes that it is appropriate that
Board members elected by the shareholders hold shares in Ericsson,
in order to strengthen the Board members' and the shareholders'
mutual interests in the Company. The Nomination Committee
recommends that Board members elected by the shareholders, over a
five year period, build a holding of shares or synthetic shares in
Ericsson equal to at least the value of the annual Board fee
(excluding fees for Committee work), and that such holding be kept
during the time the Board member remain Board member in
Ericsson.
To enable Board members to create an economic interest in the
Company and considering that it is in many cases difficult for
Board members to trade in the Company's share due to applicable
insider rules, the Nomination Committee proposes that the Board
members should, as previously, be offered the option of receiving
part of the Board fees in the form of synthetic shares. A synthetic
share constitutes a right to receive payment of an amount which
corresponds to the market value of a share of series B in the
Company on Nasdaq Stockholm at the time of payment.
Proposal
The Nomination Committee therefore proposes that the AGM 2023
resolve that part of the fees to the Board member, in respect of
their Board assignment (however, not in respect of Committee work),
may be paid in the form of synthetic shares, on the following terms
and conditions.
- A nominated Board member shall be able to choose to receive the
fee in respect of his or her Board assignment, according to the
following four alternatives:
-
- 25 percent in cash – 75 percent in synthetic shares
- 50 percent in cash – 50 percent in synthetic shares
- 75 percent in cash – 25 percent in synthetic shares
- 100 percent in cash.
- The number of synthetic shares to be allocated shall be valued
at the average of the market price of shares of series B in the
Company on Nasdaq Stockholm during a period of five trading days
immediately following the publication of Ericsson's interim report
for the first quarter of 2023. The synthetic shares are vested
during the term of office, with 25 percent per quarter of the
year.
- The synthetic shares give a right to, following the publication
of Ericsson's year-end financial statement in 2028, receive payment
of a cash amount per synthetic share corresponding to the market
price of shares of series B in the Company in close connection with
the time of payment.
- An amount corresponding to dividend in respect of shares of
series B in the Company, resolved by the AGM during the holding
period, shall be disbursed at the same time as the cash
amount.
- Should the Board member's assignment to the Board of Directors
come to an end no later than during the third calendar year after
the year in which the AGM resolved on allocation of the synthetic
shares, payment may take place the year after the assignment came
to an end.
- The number of synthetic shares may be subject to recalculation
in the event of bonus issues, splits, rights issues and similar
measures, under the terms and conditions for the synthetic
shares.
The complete terms and conditions for the synthetic shares are
described in Exhibit 1 to the Nomination Committee's
proposal.
The financial difference for the Company, should all Board
members receive part of their fees in the form of synthetic shares
compared with the fees being paid in cash only, is assessed to be
limited.
Item 11 Election of Board members and deputies of the Board
of Directors
Proposals
The Nomination Committee proposes that the following persons be
re-elected Board members:
- Jon Fredrik Baksaas;
- Jan Carlson;
- Carolina Dybeck Happe;
- Börje Ekholm;
- Eric A. Elzvik;
- Kristin S. Rinne;
- Helena Stjernholm; and
- Jacob Wallenberg.
The Nomination Committee proposes that the following two persons be
elected as new Board members:
- Jonas Synnergren; and
- Christy Wyatt.
Item 12 Election of the Chair of the Board of
Directors
The Nomination Committee proposes that Jan Carlson be elected Chair of the Board of
Directors (new election).
Information regarding proposed Board members and Chair (Item
11 and 12)
Information regarding the proposed Board members and Chair is
presented in Exhibit 2 to the Nomination Committee's
proposal.
Considerations
The Nomination Committee primarily searches for potential Board
member candidates for the upcoming mandate period, but also
considers future competence needs. It is a long journey to identify
the right candidates and long-term planning is essential. In
assessing the appropriate composition of the Board of Directors,
the Nomination Committee considers, among other things, experience
and competence needed on the Board and its Committees, and the
value of diversity in age, gender and cultural/geographic
background as well as the need for renewal. The Nomination
Committee believes that diversity on the Board will support
Ericsson's sustainable development and therefore continually
focuses on identifying Board member candidates with different
backgrounds. While acknowledging increased expectations on
transparency relating to diversity on the Board, applicable privacy
regulations prevent Ericsson and the Nomination Committee from
processing certain sensitive personal data about its Board members,
such as information relating to demographic background. The
Nomination Committee has applied the Swedish Corporate Governance
Code, Section 4.1, as diversity policy. Focusing on improving the
gender balance over time, the Nomination Committee particularly
works to identify women candidates matching the current and future
needs of the Board. The Nomination Committee also assesses the
appropriateness of the number of Board members and whether the
Board members can devote the necessary time required to fulfill
their tasks as Board members in Ericsson.
In its appraisal of qualifications and performance of the
individual Board members, the Nomination Committee takes into
account the competence and experience of each individual member
along with the individual member's contribution to the Board work
as a whole and to the Committee work. The Committee has
familiarized itself with the results of the Board work evaluation
that was led by the Chair of the Board of Directors. The Nomination
Committee's objective is to propose and support the election of a
Board that is comprised of individuals of the highest competency
and integrity, while also holistically comprising a strong mix of
needed skills and experience to effectively oversee and lead
Ericsson.
The Nomination Committee is of the opinion that the current
Board of Directors and Board work is well functioning. Further, it
is the Nomination Committee's view that the Board fulfills
expectations in terms of composition and that the Board of
Directors as well as the individual Board members fulfill
expectations in terms of expertise. Competencies and experiences
represented on the Board include broad international industry
experience, experience from the telecom, IT and ICT sectors,
technological and technical competencies and experiences (e.g.
related to software and digitalization), financial expertise and
experience from private equity, M&A and new business. The
Nomination Committee further believes that competencies and
experiences within the Environmental, Social and Governance areas
considered most relevant for Ericsson and the sector in which the
Company operates are well represented on the Board, including for
example related to the technologies the Company develops and
delivers as well as relating to ethics and compliance. While the
Board is well functioning and has a strong composition, the
Nomination Committee believes that the Board would benefit from
additional expertise within the software, technology and enterprise
area.
Ronnie Leten, Kurt Jofs and
Nora Denzel have informed the
Nomination Committee that they will not stand for re-election at
the AGM 2023. The Nomination Committee proposes re-election of
current Board members Jon Fredrik Baksaas, Jan Carlson, Carolina
Dybeck Happe, Börje Ekholm, Eric A. Elzvik, Kristin S. Rinne, Helena
Stjernholm and Jacob
Wallenberg, and new election of Jonas Synnergren and
Christy Wyatt as members of the
Board. Jonas Synnergren has long-term international business
experience as a Board member of Tieto Oyj and Veoneer Inc. and is
currently a Board member of Nordea Oyj. In addition, Jonas
Synnergren is Senior Partner in Cevian Capital AB, one of
Ericsson's shareholders. Christy
Wyatt has long-term international business experience from
senior management roles within Motorola, Good Technology and DTEX
Systems and is currently the President and CEO of Absolute
Software.
It is the Nomination Committee's assessment that the proposed
new Chair of the Board of Directors, Jan
Carlson, with his long career both as CEO and Chairman, good
knowledge of Ericsson after serving many years on the Board,
international experience, technology background and personal
qualities will be an excellent successor as Chair of the Board.
Further, it is the Nomination Committee's assessment that each of
the proposed Board members, with their respective experiences, adds
valuable expertise and experience to the Board, and that Jonas
Synnergren's and Christy Wyatt's
extensive international business experiences and deep software,
enterprise and technology expertise will be of additional value to
Ericsson and will further strengthen the Board.
Out of the proposed Board members to be elected by the AGM of
shareholders (excluding the President and CEO) 44% are women.
Gender balance continues to be a key priority for the Nomination
Committee, and the Committee works to improve the gender balance on
the Board of Directors over time.
Independence of Board members
The Nomination Committee has made the following assessments in
terms of applicable independence requirements:
1. The Nomination Committee considers that the following
Board members are independent of the Company and its senior
management:
a. Jon Fredrik Baksaas
b. Jan
Carlson
c. Carolina Dybeck
Happe
d. Eric A. Elzvik
e. Kristin S.
Rinne
f. Helena
Stjernholm
g. Jonas Synnergren
h. Jacob
Wallenberg
i. Christy
Wyatt
2. From among the Board members reported in (i) above, the
Nomination Committee considers that at least the following are
independent of the Company's major shareholders:
a. Jon Fredrik Baksaas
b. Jan
Carlson
c. Carolina Dybeck
Happe
d. Eric A. Elzvik
e. Kristin S.
Rinne
f. Jonas Synnergren
g. Christy
Wyatt
Moreover, the Nomination Committee considers that at least the
following Board members are independent in respect of all
applicable independence requirements:
a. Jon Fredrik Baksaas
b. Jan
Carlson
c. Carolina Dybeck
Happe
d. Eric A. Elzvik
e. Kristin S.
Rinne
f. Jonas Synnergren
g. Christy
Wyatt
The Nomination Committee concludes that the proposed composition
of the Board of Directors meets the independence requirements
applicable to Ericsson.
Item 13 Number of auditors
According to the articles of association, the Company shall have
no less than one and no more than three registered public
accounting firms as auditor. The Nomination Committee proposes that
the Company should have one registered public accounting firm as
auditor.
Item 14 Fees payable to the auditor
The Nomination Committee proposes, like previous years, that the
auditor fees be paid against approved account.
Item 15 Election of auditor
In accordance with the recommendation by the Audit and
Compliance Committee, the Nomination Committee proposes that
Deloitte AB be appointed auditor for the period from the end of the
AGM 2023 until the end of the AGM 2024 (re-election).
Item 16 Implementation of LTV I 2023 including transfer of
treasury stock, directed share issue and authorization for the
Board of Directors to decide on an acquisition offer of shares of
series C
Background
The Remuneration Committee and the Board of Directors evaluate
the long-term variable compensation ("LTV") programs to the
Executive Team ("ET") on an ongoing basis. The evaluation
considers the LTV programs for effectiveness in serving their
purpose to support achieving the Ericsson Group's strategic
business objectives and sustainable long-term interests as well as
their facility to increase the long-term focus of the members of
the ET and align their interests with the long-term expectations
and the interests of the shareholders.
Upon evaluation of the currently ongoing LTV programs for 2020,
2021 and 2022, the Remuneration Committee and the Board of
Directors concluded that these ongoing LTV programs, which are all
in essence the same in terms of plan structure, performance
criteria and performance periods, enabled the Company to achieve
its long-term objectives. The ongoing LTV programs further enabled
the Company to remain committed to the targets for 2023 as well as
the long-term target of 15-18% adjusted earnings (loss) before
interest, taxes, amortization and write-downs of acquired
intangible assets ("EBITA"), in turn creating increased
shareholder value. In order to further strengthen both Ericsson's
and the ET's commitment to long-term sustainability and responsible
business, the Board of Directors, upon recommendation from the
Remuneration Committee, has concluded to propose to the AGM 2023 an
LTV I 2023 for the ET.
LTV I 2023 is an integral part of the Company's remuneration
strategy and the Board of Directors in particular expects the
members of the ET to build significant equity holdings to align the
interests and expectations of the LTV program participants with
those of shareholders.
Proposals
16.1 Implementation of the LTV I 2023
The Board of Directors proposes that the AGM resolve on the LTV
I 2023 for ET members comprising a maximum of 4.1 million shares of
series B in the Company as set out below.
Objectives of the LTV program
The LTV program is designed to provide long-term incentives for
members of the ET ("Participants"), thereby creating
long-term value for the shareholders. The aim is to attract, retain
and motivate executives in a competitive market through
performance-based share related incentives, to encourage the
build-up of significant equity holdings to align the interests of
the Participants with those of shareholders and to further
strengthen the ET's commitment to long-term sustainability and
responsible business.
The LTV Program in brief
The LTV Program is proposed to include all members (current and
future) of the ET, currently comprising of 17 employees, including
the President and CEO. Awards under LTV I 2023 ("Performance
Share Awards") will be granted free of charge entitling the
Participant, provided that i.e. certain performance criteria set
out below are met, to receive a number of shares, free of charge,
following expiration of a three-year vesting period ("Vesting
Period"). Allotment of shares pursuant to Performance Share
Awards will be subject to the achievement of performance criteria,
as set out below, and will generally require that the Participant
retains his or her employment over the Vesting Period. All major
decisions relating to LTV I 2023 will be taken by the Remuneration
Committee, with approval by the full Board of Directors as
required.
Granting of Performance Share Awards
Granting of Performance Share Awards to the Participants will
generally take place as soon as practicably possible following the
AGM 2023. For 2023, the value of the underlying shares in respect
of the Performance Share Awards made to the President and CEO will
not exceed 190% of the Annual Base Salary at the time of grant, and
for other Participants, the value will not exceed 70% of the
Participants' respective Annual Base Salary at the time of grant,
unless the Participant is employed in the USA where the value will not exceed 100% of
Participants' Annual Base Salary.
The share price used to calculate the number of shares to which
the Performance Share Awards entitle will be the volume-weighted
average of the market price of shares of series B in Ericsson on
Nasdaq Stockholm during the five trading days immediately following
the publication of the Company's interim report for the fourth
quarter 2022.
Performance criteria
The vesting of the Performance Share Awards will be subject to
the satisfaction of performance criteria related to 2023 Group
EBITA (earnings (loss) before interest, taxes,
amortizations and write-downs of acquired intangible)
(operating income) performance criterion, along with three-year
total shareholder return ("TSR" [2]), and Group
Environmental Social Governance ("ESG") performance
criteria, which will determine what portion (if any) of the
Performance Share Awards will vest at the end of the Vesting
Period.
The 2023 Group EBITA (operating income) performance criterion
relates to 45% of the Performance Share Awards and the maximum
vesting level is 200%.
The performance criteria based on TSR are absolute TSR
development and relative TSR development for the Ericsson series B
share over the period January 1, 2023
– December 31, 2025 ("Performance
Period" [3]). The absolute and relative TSR performance
criteria relate to 25% and 20%, respectively, of the Performance
Share Awards and the maximum vesting level for both TSR performance
criteria is 200%.
The Group ESG performance criterion measured over the
Performance Period will relate to 10% of the Performance Share
Awards, and the maximum vesting level is 200%.
The following conditions will apply to the performance
criteria:
- 2023 Group EBITA (operating income) performance criterion
45% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of a Group EBITA
(operating income) performance criterion for the 2023 financial
year. The 2023 Group EBITA (operating income) performance criterion
established by the Board of Directors will stipulate a minimum
level and a maximum level. The 2023 Group EBITA (operating income)
target is not disclosed due to stock market and competition
considerations. The vesting level of Performance Share Awards
related to 2023 Group EBITA (operating income) performance
criterion will be determined by the Board of Directors when the
audited result for the financial year 2023 is available.
If the maximum performance level is reached or
exceeded, the vesting will amount to (and will not exceed) the
maximum level of 200% of the Performance Share Awards related to
the 2023 Group EBITA (operating income) performance criterion. If
performance is below the maximum level but exceeds the minimum
level, a linear pro-rata vesting of shares will occur. No vesting
will occur if performance amounts to or is below the minimum level.
The allotment of the shares will not occur until the end of the
Vesting Period in 2026.
Absolute TSR performance criterion
25% of the Performance Share Awards granted to a
Participant will be subject to fulfillment of an absolute TSR
performance criterion over the Performance Period. If the absolute
TSR development reaches or exceeds 14% per annum compounded, the
maximum vesting of 200% of the Performance Share Awards related to
absolute TSR performance criterion will occur. If the absolute TSR
development is below or reaches only 6% per annum compounded, no
vesting will occur in respect of the Performance Share Awards
related to the absolute TSR performance criterion. A linear
pro-rata vesting from 0% to 200% of the Performance Share Awards
related to absolute TSR performance criterion will apply if the
Company's absolute TSR performance is between 6% and 14% per annum
compounded.
Relative TSR performance criterion
20% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of a relative TSR
performance criterion over the Performance Period, compared to a
peer group consisting of 11 peer companies ("Peer
Group"[4]). The vesting of the relative TSR related Performance
Share Awards varies depending on the Company's TSR performance
ranking versus the other companies in the Peer Group. If the
Company's relative TSR performance is below the TSR development of
the company ranked 6th in the Peer Group, no vesting
will occur in respect of the Performance Share Awards related to
relative TSR performance criterion. Vesting of the Performance
Share Awards related to relative TSR performance criterion will
occur at the following percentage levels, based on which ranking
position in the Peer Group the Company's TSR performance
corresponds to:
Position within the Peer Group
Associated vesting
percentage level
6 or lower
0%
5
50%
4
100%
3
150%
2 or higher
200%
If the Company's TSR performance is between two
of the ranked companies, a linear pro-rata vesting will apply
between the vesting percentage levels for the relevant ranked
positions.
- Group ESG performance criterion
10% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of a Group ESG
performance criterion comprised of two equally weighted
subcomponents covering environmental and social aspects of ESG
measured over the Performance Period.
Reduction of greenhouse gas emissions
5% of the Performance Share Awards granted to a
Participant will be subject to fulfillment of a subcomponent of
reducing greenhouse gas ("GHG") emissions [5] from service
fleet vehicles, energy consumption at facilities and from business
travel [6].
Subcomponent target- and corresponding
achievement levels are defined in the schedule below and broken
down for each of the three years [7] covered by the Performance
Period. Vesting is determined at the end of each year, with each
year corresponding to one third (1/3) of the total subcomponent
Performance Share Awards. A linear pro-rata vesting of one third
(1/3) of 0% to 200% of the Performance Share Awards related to
reducing emissions in the subcomponent will apply if reported
emissions in scope are between the minimum and maximum vesting
levels for each of the years covered by the Performance Period. An
illustrative example is included below.
These target levels are aligned to the emissions
reduction trajectory set for achieving Net Zero emissions from the
Ericsson Group's own activities by 2030.
Achievement GHG emissions target levels
for emission in scope by fiscal year (ktonne CO2e)
(%)
2023 2024
2025
0
142 132
122
100
135
126
116
200
121
113
104
Illustrative example: first, if reported
emissions in scope for the year 2023 are 121 ktonne, the maximum
vesting of one third of 200% (1/3 x 200% = 66.67%) of the
Performance Share Awards related to this subcomponent and year will
occur. Next, if reported emissions for the year 2024 are 126
ktonne, vesting of one third of 100% (1/3 x 100% = 33.33%) of the
Performance Share Awards related to this subcomponent and fiscal
year will occur. Last, if reported emissions in scope for the year
2025 are 122 ktonne, no vesting (1/3 x 0% = 0.00%) of the
Performance Share Awards related to this subcomponent will occur.
Consequently, in this example total vesting of the Performance
Share Award related to this subcomponent over the Performance
Period will be (66.67% + 33.33% + 0.00%) 100%.
Increasing the representation of women
leaders in Ericsson
5% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of a subcomponent of
increasing the representation of women leaders (i.e. women holding
roles with people management responsibility) in the Ericsson Group
to 24% by the end of the Performance Period, which is in line with
achieving the target trajectory for increasing the representation
of women leaders in the Ericsson Group to 30% by 2030.
If the representation of women leaders in the
Ericsson Group amounts to 25% or above by the end of the
Performance Pe riod, the maximum
vesting of 200% of the Performance Share Awards related to this
subcomponent will occur. If the representation of women leaders in
the Ericsson Group amounts to 23% or below by the end of the
Performance Period, no vesting will occur in respect of the
Performance Share Awards related to this subcomponent. A linear
pro-rata vesting from 0% to 200% of the Performance Share Awards
related to increasing the representation of women leaders in the
Ericsson Group subcomponent will apply if the representation of
women leaders in the Ericsson Group exceeds 23% but is below 25% by
the end of the Performance Period.
The vesting level of Performance Share Awards
related to the Group ESG performance criterion will be determined
by the Board of Directors when the audited results for both
subcomponents at the end of the financial year 2025 are
available.
Information about the outcome of the performance criteria will
be provided no later than in the annual report for the financial
year 2025.
Allotment of shares
Provided that the performance criteria above have been met and
that the Participant has retained his or her employment (unless
special circumstances are at hand) during the Vesting Period,
allotment of vested shares will take place as soon as practicably
possible following the expiration of the Vesting Period.
When determining the final vesting level of Performance Share
Awards, the Board of Directors shall examine whether the vesting
level is reasonable considering the Company's financial results and
position, conditions on the stock market and other circumstances,
such as environmental, social, ethics and compliance factors, and
if not, as determined by the Board of Directors, reduce the vesting
level to the lower level deemed appropriate by the Board of
Directors.
In the event delivery of shares to Participants cannot take
place under applicable law or at a reasonable cost and employing
reasonable administrative measures, the Board of Directors will be
entitled to decide that Participants may, instead, be offered a
cash settlement.
The Company has the right to, before delivering vested shares to
the Participants, retain and sell the number of shares required to
cover the cost for withholding and paying tax and social security
liabilities on behalf of the Participants in relation to the
Performance Share Awards for remittance to revenue authorities. In
such an event, net amount of vested shares will thus be delivered
to the Participants after the vested Performance Share Awards are
reduced by the number of shares retained by the Company for such
purposes.
Financing
The Board of Directors has considered different financing
methods for transfer of shares under the LTV I 2023 such as
transfer of treasury stock and an equity swap agreement with a
third party. The Board of Directors considers that a directed issue
of shares of series C in the Company, followed by buy-back and
transfer of treasury stock is the most cost efficient and flexible
method to transfer shares under the LTV I 2023.
The Company's current holding of treasury stock is not
sufficient for the implementation of the LTV I 2023. Therefore, the
Board of Directors proposes a directed share issue and buy back of
shares as further set out below under item 16.2. Under the proposed
transactions, shares are issued at the share's quota value and
repurchased as soon as the shares have been subscribed for and
registered. The purchase price paid by the Company to the
subscriber equals the subscription price. As compensation to the
subscriber for its assistance in the issuance and buy-back of
shares under items 16, 17, 18 and 19 the Company will pay to the
subscriber an amount totaling SEK
100,000.
The procedure of issuance and buy-back of shares for the
Company's LTV programs has previously been decided by the AGMs in
2001, 2003, 2008, 2009, 2012, 2016, and 2017.
Since the costs for the Company in connection with an equity
swap agreement will be significantly higher than the costs in
connection with transfer of treasury stock, the main alternative is
that the financial exposure is secured by transfer of treasury
stock and that an equity swap agreement with a third party is an
alternative in the event that the required majority for approval is
not reached.
Costs
The total effect on the income statement of the LTV I 2023,
including financing costs and social security fees, is estimated to
range between SEK 100 million and
SEK 230 million distributed over the
years 2023-2026. The costs will depend on the future development of
the price of Ericsson series B share.
The administration cost for transfer of shares by way of an
equity swap agreement is currently estimated to approximately
SEK 30 million, compared to the cost
of approximately SEK 100,000 for
using newly issued and acquired shares in treasury (SEK 100,000 is the total cost paid to the
subscriber in relation to items 16, 17, 18 and 19, regardless of
the number of share issuances).
Dilution
The Company has approximately 3.3 billion registered shares. As
per December 31, 2022, the Company
held approximately 4 million shares in treasury. The number of
shares that may be required for ongoing LTV programs (2019, 2020,
2021 and 2022) as per December 31,
2022, is estimated to approximately 4.9 million shares,
corresponding to approximately 0.15 percent of the number of
registered shares of the Company. In order to implement the LTV I
2023, a total of up to 4.1 million shares are required, which
corresponds to approximately 0.12 percent of the total number of
registered shares of the Company, hence an issue of new shares is
proposed for the implementation of LTV I 2023. The effect on
important key figures is only marginal.
16.2 Transfer of treasury stock to employees and on an
exchange, directed share issue and acquisition offer for the LTV I
2023
a. Transfer of treasury stock under the
LTV I 2023
Transfer of no more than 3.4 million shares of series B in the
Company less any shares retained by the Company as per item 16.2 c)
may occur on the following terms and conditions:
-
-
- The right to acquire shares shall be granted to such persons
within the Ericsson Group covered by the terms and conditions
pursuant to the LTV I 2023. Furthermore, subsidiaries within the
Ericsson Group shall have the right to acquire shares, free of
consideration, and such subsidiaries shall be obligated to
immediately transfer, free of consideration, shares to employees
covered by the terms and conditions of the LTV I 2023.
- The employee shall have the right to receive shares during the
period when the employee is entitled to receive shares pursuant to
the terms and conditions of the LTV I 2023, i.e. in 2026.
- Employees covered by the terms and conditions of the LTV I 2023
shall receive shares of series B in the Company free of
consideration.
- The number of shares of series B in the Company that may be
transferred under the LTV I 2023 may be subject to recalculation in
the event of bonus issues, splits, rights issues and/or similar
measures, under the terms and conditions of the LTV I 2023.
b. Transfer of treasury stock on an
exchange to cover expenses
The Company may, prior to the AGM in 2024, transfer no more than
700,000 shares of series B in the Company, in order to cover
certain expenses, mainly social security payments. Transfer of the
shares shall be effected on Nasdaq Stockholm at a price within the,
at each time, prevailing price interval for the share as
disseminated by Nasdaq Stockholm.
c. Authorization to decide on transfer
of treasury stock on an exchange to cover costs for tax and social
security liabilities for the Participants
Authorization for the Board of Directors to decide to, in
conjunction with the delivery of vested shares under LTV I 2023,
prior to the AGM in 2024, retain and sell no more than 60% of the
vested shares of series B in the Company in order to cover for the
costs for withholding and paying tax and social security
liabilities on behalf of the Participants in relation to the
Performance Share Awards for remittance to revenue authorities.
Transfer of the shares shall be effected on Nasdaq Stockholm at a
price within the, at each time, prevailing price interval for the
share as disseminated by Nasdaq Stockholm. These shares form a part
of the final number of vested shares to the employees under LTV I
2023 and do not incur additional costs to the LTV I 2023 for the
Company.
d. Directed issue of shares of series C
in the Company
Increase of the share capital in the Company with SEK 20,500,000.01 by an issue of 4.1 million
shares of series C in the Company, each share with a quota value of
approximately SEK 5. The terms and
conditions of the share issue are the following:
- The new shares shall – with deviation from the shareholders'
preferential rights – be subscribed for only by Investor AB or its
subsidiaries.
- The new shares shall be subscribed for during the period as
from Thursday, April 27, 2023, up to
and including Tuesday, May 2, 2023.
Over-subscription may not occur.
- The amount that shall be paid for each new share shall be the
quota value (approximately SEK
5).
- Payment for the subscribed shares shall be made at the time of
subscription.
- The Board of Directors shall be entitled to extend the period
for subscription and payment.
- The new shares shall not entitle the holders to dividend
payment.
- It is noted that the new shares are subject to restrictions
pursuant to Chapter 4, Section 6 (conversion clause) and Chapter
20, Section 31 (redemption clause) of the Swedish Companies
Act.
The Board of Directors proposes that the President and CEO shall
be authorized to make the minor adjustments to the above
resolutions that may prove to be necessary in connection with the
registration with the Swedish Companies Registration Office.
Reasons for deviation from the shareholders' preferential
rights and principles on which the subscription price is
based
The Board of Directors considers that a directed issue of shares
of series C in the Company, followed by buy-back and transfer of
treasury stock is the most cost efficient and flexible method to
transfer shares under the LTV I 2023. Shares are issued at the
share's quota value and repurchased as soon as the shares have been
subscribed for and registered. The purchase price paid by the
Company to the subscriber equals the subscription price.
e. Authorization for the Board of
Directors to decide on a directed acquisition offer
Authorization for the Board of Directors to decide that 4.1
million shares of series C in Ericsson be acquired according to the
following:
-
-
- Acquisition may occur by an offer to acquire shares directed to
all holders of shares of series C in Ericsson.
- The authorization may be exercised until the AGM in 2024.
- The acquisition shall be made at a price corresponding to the
quota value of the share (approximately SEK
5 per share).
- Payment for acquired shares shall be made in cash.
16.3 Equity Swap Agreement with third party in relation to
the LTV I 2023
In the event that the required majority for approval is not
reached under item 16.2 above, the financial exposure of the LTV I
2023 shall be hedged by the Company entering into an equity swap
agreement with a third party, under which the third party shall, in
its own name, acquire and transfer shares of series B in the
Company to employees covered by the LTV I 2023.
Majority rules
The resolution of the AGM on implementation of the LTV I 2023
according to item 16.1 requires that more than half of the votes
cast at the AGM approve the proposal. The resolution of the AGM on
transfer of treasury stock to employees and on an exchange,
directed share issue and acquisition offer for the LTV I 2023
according to item 16.2 requires that shareholders representing at
least nine-tenths of the votes cast as well as the shares
represented at the AGM approve the proposal. The resolution of the
AGM on an Equity Swap Agreement with third party according to item
16.3 requires that more than half of the votes cast at the AGM
approve the proposal.
Item 17 Implementation of LTV II 2023 including transfer of
treasury stock, directed share issue and authorization for the
Board of Directors to decide on an acquisition offer
Background
In addition to the LTV programs for the President and CEO and
members of the ET, Ericsson has since 2017 operated a
performance-based long-term variable compensation program for
employees classified as Executives (approximately 180 employees)
(the Ericsson Executive Performance Plan ("EPP")). The EPP
is identical to the LTV I, with the exception that the EPP is cash
settled. The Remuneration Committee and the Board of Directors have
evaluated whether to implement an additional long-term variable
compensation program, LTV II 2023, for Executives with delivery of
shares of series B in Ericsson instead of cash settlement to
further strengthen both Ericsson's and the Executives' commitment
to long-term sustainability and responsible business. The Board of
Directors, upon recommendation from the Remuneration Committee, has
concluded to propose to the AGM 2023 the LTV II 2023 for
Executives.
LTV II 2023 is an integral part of the Company's remuneration
strategy, and the Board of Directors in particular expects the
Executives to build significant equity holdings to align the
interests and expectations of the LTV program participants with
those of shareholders.
The criteria and vesting period for LTV II 2023 are the same as
for LTV I 2023. Should the AGM 2023 not vote in favor of the
proposal of implementing LTV II 2023 the EPP 2023 will be
implemented.
Proposals
17.1 Implementation of the LTV II 2023
The Board of Directors proposes that the AGM resolve on the LTV
II 2023 for Executives, comprising a maximum of 5.9 million shares
of series B in the Company as set out below.
Objectives of the LTV program
The LTV program is designed to provide long-term incentives for
Executives ("Participants"), thereby creating long-term
value for the shareholders. The aim is to attract, retain and
motivate Executives in a competitive market through
performance-based share related incentives, to encourage the
build-up of significant equity holdings to align the interests of
the Participants with those of shareholders and to further
strengthen Ericsson's and the Executives' commitment to long-term
sustainability and responsible business.
The LTV program in brief
The LTV program is proposed to include all Executives (current
and future), currently comprising of 180 employees, excluding the
President and CEO and ET. Awards under LTV II 2023 ("Performance
Share Awards") will be granted free of charge entitling the
Participant, provided that i.e. certain performance criteria set
out below are met, to receive a number of shares, free of charge,
following expiration of a three-year vesting period ("Vesting
Period"). Allotment of shares pursuant to Performance Share
Awards will be subject to the achievement of performance criteria,
as set out below, and will generally require that the Participant
retains his or her employment over the Vesting Period. All major
decisions relating to LTV II 2023 will be taken by the Remuneration
Committee, with approval by the full Board of Directors as
required.
Granting of Performance Share Awards
Granting of Performance Share Awards to the Participants will
generally take place as soon as practicably possible following the
AGM 2023. For 2023, the value of the underlying shares in respect
of the Performance Share Awards made to the Participants, will not
exceed 70% of the Participants' respective Annual Base Salary at
the time of grant, unless the Participant is employed in the
USA where the value will not
exceed 100% of Participant's Annual Base Salary.
The share price used to calculate the number of shares to which
the Performance Share Awards entitle will be the volume-weighted
average of the market price of shares of series B in the Company on
Nasdaq Stockholm during the five trading days immediately following
the publication of the Company's interim report for the fourth
quarter 2022.
Performance criteria
The vesting of the Performance Share Awards will be subject to
the satisfaction of performance criteria related to 2023 Group
EBITA (earnings (loss) before interest, taxes, amortizations and
write-downs of acquired intangible) (operating income) performance
criterion, along with three-year total shareholder return
("TSR" [8]), and Group ESG performance criteria, which will
determine what portion (if any) of the Performance Share Awards
will vest at the end of the Vesting Period.
The 2023 Group EBITA (operating income) performance criterion
relates to 45% of the Performance Share Awards and the maximum
vesting level is 200%.
The performance criteria based on TSR are absolute TSR
development and relative TSR development for the shares of series B
in Ericsson over the period January 1,
2023 – December 31, 2025 ("Performance
Period" [9]). The absolute and relative TSR performance
criteria relate to 25% and 20%, respectively, of the Performance
Share Awards and the maximum vesting level for both TSR performance
criteria is 200%.
The Group ESG performance criterion measured over the
Performance Period will relate to 10% of the Performance Share
Awards, and the maximum vesting level is 200%.
The following conditions will apply to the performance
criteria:
- 2023 Group EBITA (operating income) performance criterion
45% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of a Group EBITA
(operating income) performance criterion for the 2023 financial
year. The 2023 Group EBITA (operating income) performance criterion
established by the Board of Directors will stipulate a minimum
level and a maximum level. The 2023 Group EBITA (operating income)
target is not disclosed due to stock market and competition
considerations. The vesting level of Performance Share Awards
related to 2023 Group EBITA (operating income) performance
criterion will be determined by the Board of Directors when the
audited result for the financial year 2023 is available.
If the maximum performance level is reached or
exceeded, the vesting will amount to (and will not exceed) the
maximum level of 200% of the Performance Share Awards related to
the 2023 Group EBITA (operating income) performance criterion. If
performance is below the maximum level but exceeds the minimum
level, a linear pro-rata vesting of shares will occur. No vesting
will occur if performance amounts to or is below the minimum level.
The allotment of the shares will not occur until the end of the
Vesting Period in 2026.
Absolute TSR performance criterion
25% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of an absolute TSR
performance criterion over the Performance Period. If the absolute
TSR development reaches or exceeds 14% per annum compounded, the
maximum vesting of 200% of the Performance Share Awards related to
absolute TSR performance criterion will occur. If the absolute TSR
development is below or reaches only 6% per annum compounded, no
vesting will occur in respect of the Performance Share Awards
related to the absolute TSR performance criterion. A linear
pro-rata vesting from 0% to 200% of the Performance Share Awards
related to absolute TSR performance criterion will apply if the
Company's absolute TSR performance is between 6% and 14% per annum
compounded.
Relative TSR performance criterion
20% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of a relative TSR
performance criterion over the Performance Period, compared to a
peer group consisting of 11 peer companies ("Peer
Group"[10]). The vesting of the relative TSR related
Performance Share Awards varies depending on the Company's TSR
performance ranking versus the other companies in the Peer Group.
If the Company's relative TSR performance is below the TSR
development of the company ranked 6th in the Peer Group,
no vesting will occur in respect of the Performance Share Awards
related to relative TSR performance criterion. Vesting of the
Performance Share Awards related to relative TSR performance
criterion will occur at the following percentage levels, based on
which ranking position in the Peer Group the Company's TSR
performance corresponds to:
Position within the Peer Group
Associated vesting percentage level
6 or lower
0%
5
50%
4
100%
3
150%
2 or higher
200%
If the Company's TSR performance is between two
of the ranked companies, a linear pro-rata vesting will apply
between the vesting percentage levels for the relevant ranked
positions.
- Group ESG performance criterion
10% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of a Group ESG
performance criterion comprised of two equally weighted
subcomponents covering environmental and social aspects of ESG
measured over the Performance Period.
Reduction of greenhouse gas emissions
5% of the Performance Share Awards granted to a
Participant will be subject to fulfillment of a subcomponent of
reducing greenhouse gas ("GHG") emissions [11] from service
fleet vehicles, energy consumption at facilities and from business
travel [12].
Subcomponent target and corresponding
achievement levels are defined in the schedule below and broken
down for each of the three years [13] covered by the Performance
Period. Vesting is determined at the end of each year, with each
year corresponding to one third (1/3) of the total subcomponent
Performance Share Awards. A linear pro-rata vesting of one third
(1/3) of 0% to 200% of the Performance Share Awards related to
reducing emissions in the subcomponent will apply if reported
emissions in scope are between the minimum and maximum vesting
levels for each of the years covered by the Performance Period. An
illustrative example is included below.
These target levels are aligned to the emissions
reduction trajectory set for achieving Net Zero emissions from the
Ericsson Group's own activities by 2030.
Achievement GHG emissions target levels
for emission in scope by fiscal year (ktonne CO2e)
(%) 2023 2024 2025
0 142
132 122
100 135 126
116
200 121 113
104
Illustrative example: first, if reported
emissions in scope for the year 2023 are 121 ktonne, the maximum
vesting of one third of 200% (1/3 x 200% = 66.67%) of the
Performance Share Awards related to this subcomponent and year will
occur. Next, if reported emissions for the year 2024 are 126
ktonne, vesting of one third of 100% (1/3 x 100% = 33.33%) of the
Performance Share Awards related to this subcomponent and fiscal
year will occur. Last, if reported emissions in scope for the year
2025 are 122 ktonne, no vesting (1/3 x 0% = 0.00%) of the
Performance Share Awards related to this subcomponent will occur.
Consequently, in this example total vesting of the Performance
Share Award related to this subcomponent over the Performance
Period will be (66.67% + 33.33% + 0.00%) 100%.
Increasing the representation of women
leaders in Ericsson
5% of the Performance Share Awards granted to a
Participant will be subject to fulfilment of a subcomponent of
increasing the representation of women leaders (i.e. women holding
roles with people management responsibility) in the Ericsson Group
to 24% by the end of the Performance Period, which is in line with
achieving the target trajectory for increasing the representation
of women leaders in the Ericsson Group to 30% by 2030.
If the representation of women leaders in the
Ericsson Group amounts to 25% or above by the end of the
Performance Period, the maximum vesting of 200% of the Performance
Share Awards related to this subcomponent will occur. If the
representation of women leaders in the Ericsson Group amounts to
23% or below by the end of the Performance Period, no vesting will
occur in respect of the Performance Share Awards related to this
subcomponent. A linear pro-rata vesting from 0% to 200% of the
Performance Share Awards related to increasing the representation
of women leaders in the Ericsson Group subcomponent will apply if
the representation of women leaders in the Ericsson Group exceeds
23% but is below 25% by the end of the Performance Period.
The vesting level of Performance Share Awards
related to the Group ESG performance criterion will be determined
by the Board of Directors when the audited results for both
subcomponents at the end of the financial year 2025 are
available.
Information about the outcome of the performance criteria will
be provided no later than in the annual report for the financial
year 2025.
Allotment of shares
Provided that the performance criteria above have been met and
that the Participant has retained his or her employment (unless
special circumstances are at hand) during the Vesting Period,
allotment of vested shares will take place as soon as practicably
possible following the expiration of the Vesting Period.
When determining the final vesting level of Performance Share
Awards, the Board of Directors shall examine whether the vesting
level is reasonable considering the Company's financial results and
position, conditions on the stock market and other circumstances,
such as environmental, social, ethics and compliance factors, and
if not, as determined by the Board of Directors, reduce the vesting
level to the lower level deemed appropriate by the Board of
Directors.
In the event delivery of shares to Participants cannot take
place under applicable law or at a reasonable cost and employing
reasonable administrative measures, the Board of Directors will be
entitled to decide that Participants may, instead, be offered a
cash settlement.
The Company has the right to, before delivering vested shares to
the Participants, retain and sell the number of shares required to
cover the cost for withholding and paying tax and social security
liabilities on behalf of the Participants in relation to the
Performance Share Awards for remittance to revenue authorities. In
such an event, net amount of vested shares will thus be delivered
to the Participants after the vested Performance Share Awards are
reduced by the number of shares retained by the Company for such
purposes.
Financing
The Board of Directors has considered different financing
methods for transfer of shares under the LTV II 2023 such as
transfer of treasury stock and an equity swap agreement with a
third party. The Board of Directors considers that a directed issue
of shares of series C in the Company, followed by buy-back and
transfer of treasury stock is the most cost efficient and flexible
method to transfer shares under the LTV II 2023.
The Company's current holding of treasury stock is not
sufficient for the implementation of the LTV II 2023. Therefore,
the Board of Directors proposes a directed share issue and buy back
of shares as further set out below under item 17.2. Under the
proposed transactions, shares are issued at the share's quota value
and repurchased as soon as the shares have been subscribed for and
registered. The purchase price paid by the Company to the
subscriber equals the subscription price. As compensation to the
subscriber for its assistance in the issuance and buy-back of
shares under items 16, 17, 18 and 19, the Company will pay to the
subscriber an amount totaling SEK
100,000.
Since the costs for the Company in connection with an equity
swap agreement will be significantly higher than the costs in
connection with transfer of treasury stock, the main alternative is
that the financial exposure is secured by transfer of treasury
stock and that an equity swap agreement with a third party is an
alternative in the event that the required majority for approval is
not reached.
Costs
The total effect on the income statement of the LTV II 2023,
including financing costs and social security fees, is estimated to
range between SEK 146 million and
SEK 333 million distributed over the
years 2023-2026. The costs will depend on the future development of
the price of shares of series B in Ericsson.
The administration cost for transfer of shares by way of an
equity swap agreement is currently estimated to approximately
SEK 30 million, compared to the cost
of approximately SEK 100,000 for
using newly issued and acquired shares in treasury (SEK 100,000 is the total cost paid to the
subscriber in relation to items 16, 17, 18 and 19, regardless of
the number of share issuances).
Dilution
The Company has approximately 3.3 billion registered shares. As
per December 31, 2022, the Company
held approximately 4 million shares in treasury. The number of
shares that may be required for ongoing LTV programs (2019, 2020,
2021 and 2022) as per December 31,
2022, is estimated to approximately 4.9 million shares,
corresponding to approximately 0.15 percent of the number of
registered shares of the Company. In order to implement the LTV II
2023, a total of up to 5.9 million shares are required, which
corresponds to approximately 0.18 percent of the total number of
registered shares of the Company. Hence an issue of new shares is
proposed for the implementation of LTV II 2023. The effect on
important key figures is only marginal.
17.2 Transfer of treasury stock to employees and on an
exchange, directed share issue and acquisition offer for the LTV II
2023
a. Transfer of treasury stock under the
LTV II 2023
Transfer of no more than 4.9 million shares of series B in the
Company less any shares retained by the Company as per item 17.2 c)
may occur on the following terms and conditions:
- The right to acquire shares shall be granted to such persons
within the Ericsson Group covered by the terms and conditions
pursuant to the LTV II 2023. Furthermore, subsidiaries within the
Ericsson Group shall have the right to acquire shares, free of
consideration, and such subsidiaries shall be obligated to
immediately transfer, free of consideration, shares to employees
covered by the terms and conditions of the LTV II 2023.
- The employee shall have the right to receive shares during the
period when the employee is entitled to receive shares pursuant to
the terms and conditions of the LTV II 2023, i.e. in 2026.
- Employees covered by the terms and conditions of the LTV II
2023 shall receive shares of series B in the Company free of
consideration.
- The number of shares of series B in the Company that may be
transferred under the LTV II 2023 may be subject to recalculation
in the event of bonus issues, splits, rights issues and/or similar
measures, under the terms and conditions of the LTV II 2023.
b. Transfer of treasury stock on an
exchange to cover expenses
The Company may, prior to the AGM in 2024, transfer no more than
1.0 million shares of series B in the Company, in order to cover
certain expenses, mainly social security payments. Transfer of the
shares shall be effected on Nasdaq Stockholm at a price within the,
at each time, prevailing price interval for the share as
disseminated by Nasdaq Stockholm.
c. Authorization to decide on transfer
of treasury stock on an exchange to cover costs for tax and social
security liabilities for the Participants
Authorization for the Board of Directors to decide to, in
conjunction with the delivery of vested shares under LTV II 2023,
prior to the AGM in 2024, retain and sell no more than 60% of the
vested shares of series B in the Company in order to cover for the
costs for withholding and paying tax and social security
liabilities on behalf of the Participants in relation to the
Performance Share Awards for remittance to revenue authorities.
Transfer of the shares shall be effected on Nasdaq Stockholm at a
price within the, at each time, prevailing price interval for the
share as disseminated by Nasdaq Stockholm. These shares form a part
of the final number of vested shares to the employees under LTV II
2023 and do not incur additional costs to the LTV II 2023 for the
Company.
d. Directed issue of shares of series C
in the Company
Increase of the share capital in the Company with SEK 29,500,000.01 by an issue of 5.9 million
shares of series C in the Company, each share with a quota value of
approximately SEK 5. The terms and
conditions of the share issue are the following:
- The new shares shall – with deviation from the shareholders'
preferential rights – be subscribed for only by Investor AB or its
subsidiaries.
- The new shares shall be subscribed for during the period as
from Thursday, April 27, 2023, up to
and including Tuesday, May 2, 2023.
Over-subscription may not occur.
- The amount that shall be paid for each new share shall be the
quota value (approximately SEK
5).
- Payment for the subscribed shares shall be made at the time of
subscription.
- The Board of Directors shall be entitled to extend the period
for subscription and payment.
- The new shares shall not entitle the holders to dividend
payment.
- It is noted that the new shares are subject to restrictions
pursuant to Chapter 4, Section 6 (conversion clause) and Chapter
20, Section 31 (redemption clause) of the Swedish Companies
Act.
The Board of Directors proposes that the President and CEO shall
be authorized to make the minor adjustments to the above
resolutions that may prove to be necessary in connection with the
registration with the Swedish Companies Registration Office.
Reasons for deviation from the shareholders' preferential
rights and principles on which the subscription price is
based
The Board of Directors considers that a directed shares of
series C in the Company, followed by buy-back and transfer of
treasury stock is the most cost efficient and flexible method to
transfer shares under the LTV II 2023. Shares are issued at the
share's quota value and repurchased as soon as the shares have been
subscribed for and registered. The purchase price paid by the
Company to the subscriber equals the subscription price.
e. Authorization for the Board of
Directors to decide on a directed acquisition offer
Authorization for the Board of Directors to decide that 5.9
million shares of series C in Ericsson be acquired according to the
following:
- Acquisition may occur by an offer to acquire shares directed to
all holders of shares of series C in Ericsson.
- The authorization may be exercised until the AGM in 2024.
- The acquisition shall be made at a price corresponding to the
quota value of the share (approximately SEK
5 per share).
- Payment for acquired shares shall be made in cash.
17.3 Equity Swap Agreement with third party in relation to
the LTV II 2023
In the event that the required majority for approval is not
reached under item 17.2 above, the financial exposure of the LTV II
2023 shall be hedged by the Company entering into an equity swap
agreement with a third party, under which the third party shall, in
its own name, acquire and transfer shares of series B in the
Company to employees covered by the LTV II 2023.
Majority rules
The resolution of the AGM on implementation of the LTV II 2023
according to item 17.1 requires that more than half of the votes
cast at the AGM approve the proposal. The resolution of the AGM on
transfer of treasury stock to employees and on an exchange,
directed share issue and acquisition offer for the LTV II 2023
according to item 17.2 requires that shareholders representing at
least nine-tenths of the votes cast as well as the shares
represented at the AGM approve the proposal. The resolution of the
AGM on an Equity Swap Agreement with third party according to item
17.3 requires that more than half of the votes cast at the AGM
approve the proposal.
Description of other ongoing long-term variable compensation
programs
In addition to the LTV programs, which are directed at the
President and CEO and the members of the ET, the Company has other
ongoing long-term variable compensation programs directed at other
employees within the Group ("Executives"). These programs
are an integral part of the Company's remuneration strategy as well
as a part of the Company's talent management strategy. The Company
has decided to implement two other share-related compensation
programs for 2023: The Executive Performance Plan 2023 ("EPP
2023") and the Key Contribution Plan 2023 ("KC Plan
2023"). Ericsson has also implemented an all-employee share
purchase plan in 2021.
The Executive Performance Plan 2023, implemented only in case
the AGM 2023 would not resolve in favor of item 17
The EPP 2023 is designed to attract, retain and motivate
Executives in a competitive market through performance based
long-term cash incentive supporting the achievement of the
Company's long-term strategies and business objectives.
Approximately 180 Executives will be eligible for the EPP 2023.
Participants are assigned a potential award defined as a percentage
of the participants' annual gross salary, which is converted into a
number of synthetic shares based on the same market price of shares
of series B in Ericsson used for the LTV I 2023 at the time of
grant. Award levels are assigned to Executives in range of 0-45% of
annual base pay.
The vesting level of the awards, occurring after a three-year
vesting period, is subject to the achievement of the same
performance criteria as for the LTV I 2023, and generally requires
that the participant retains his or her employment over the
three-year vesting period. At the end of the vesting period, the
allotted synthetic shares are converted into a cash amount, based
on the market price of the shares of series B in Ericsson at Nasdaq
Stockholm at the vesting date, and this final amount is paid to the
Participant in cash gross before tax. It is estimated that
approximately 2.5 million synthetic shares will be awarded under
the EPP 2023. The maximum total cost effect of the EPP 2023 on the
income statement, including social security fees, is estimated to
be approximately SEK 700 million
distributed over the years 2023-2026. The costs will depend on the
future development of the market price of the shares of series B in
Ericsson.
The Key Contribution Plan 2023
The KC Plan 2023 is designed to recognize the best talent,
individual performance, potential and critical skills as well as
encourage the retention of key employees. Approximately 10% to 14%
of Ericsson employees will be eligible for the KC Plan 2023. The
award levels are assigned to employees mainly within in a range of
10 – 50% of Annual Base Salary to bring greater alignment with the
local market conditions.
Participants are assigned a potential award, which is converted
into a number of synthetic shares based on the same market price of
the shares of series B in Ericsson used for the LTV I 2023 at the
time of grant. The plan has a three-year total service period
("Service Period") during which the awards are paid on an
annual rolling bases following the below payment schedule:
- 25% of the award at the end of the first year,
- 25% of the award at the end of the second year, and
- 50% of the award at the end of the full Service Period.
The value of each synthetic share is driven by the absolute
share price performance of shares of series B in Ericsson shares
during the Service Period. At the date of vesting for each
instalment of the above-described annual rolling payment schedule,
the synthetic shares are converted into a cash amount, based on the
market price of the Ericsson series B share on Nasdaq Stockholm at
the respective vesting date, and this final amount is paid to the
Participant in cash gross before tax. It is estimated that
approximately 31 million synthetic shares will be awarded under the
KC Plan 2023. The maximum total cost effect of the KC Plan 2023 on
the income statement, including social security fees, is estimated
to be approximately SEK 5 billion
distributed over the years 2023-2026. The costs will depend on the
future development of the market price of the Ericsson series B
share.
The Ericsson share purchase plan
("ESPP")
Ericsson is committed to helping employees thrive and to
recognizing them for the impact they create by providing
opportunities to enrich their working experience. In order to
encourage employees to play an active role in achieving the
Company's purpose, further create sense of belonging and ownership,
the ESPP was launched in November
2021 (in 58 countries to approximately 58,900 eligible
employees), with continued deployment in 2022 to 20 additional
countries and 30,100 eligible employees. In total the ESPP is now
live in 78 countries for 89,000 eligible employees of which 16,319
were actually saving at year-end 2022.
The ESPP is an all-employee share purchase plan that enables
employees to purchase shares of series B in Ericsson up to a
maximum value of SEK 50,000 per year
via monthly payroll deduction. In recognition of the employees'
commitment, Ericsson supports the participants with a net cash
payment up to 15% of their elected contribution amounts and covers
the tax on the Company supported amount, which is payable via
payroll. Under the ESPP participants will acquire shares of series
B in Ericsson at market price on Nasdaq Stockholm and the ESPP does
therefore not have any dilutive effect.
The Company's ongoing variable compensation programs are
described in further detail in the Annual Report 2022 in the Notes
to the consolidated financial statements, Note G3: Share-based
compensation and on the Company's website.
Item 18 Resolution on transfer of treasury stock to employees
and on an exchange, directed share issue and acquisition offer in
relation to the earlier resolution on the LTV 2022
Background
The AGM in 2022 resolved to implement LTV 2022 and to secure the
Company's undertakings under LTV 2022 through an equity swap
agreement with a third party. The Board of Directors still
considers that transfer of treasury stock, a proposal that was
withdrawn by the Board of Directors at the AGM 2022, is the most
cost efficient and flexible method to secure the undertakings under
LTV 2022.
The Company has approximately 3.3 billion registered shares. For
LTV 2022, a total of up to 2.0 million shares are required, which
corresponds to approximately 0.1 percent of the total number of
registered shares, hence an issue of new shares is proposed for LTV
2022. The effect on important key figures is only marginal.
Proposal
18.1 Transfer of treasury stock for the LTV 2022
To secure the delivery of Performance Shares in accordance with
the terms of the LTV 2022, the Board of Directors proposes that the
AGM resolve that the Company shall have the right to transfer no
more than 1.5 million shares of series B in the Company less any
shares retained by the Company as per item 18.3 on the following
terms and conditions:
- The right to acquire shares shall be granted to such persons
within the Ericsson Group covered by the terms and conditions
pursuant to the LTV 2022. Furthermore, subsidiaries within the
Ericsson Group shall have the right to acquire shares, free of
consideration, and such subsidiaries shall be obligated to
immediately transfer, free of consideration, shares to employees
covered by the terms and conditions of the LTV 2022.
- The employee shall have the right to receive shares during the
period when the employee is entitled to receive shares pursuant to
the terms and conditions of the LTV 2022, i.e. in 2025.
- Employees covered by the terms and conditions of the LTV 2022
shall receive shares of series B in the Company free of
consideration.
- The number of shares of series B in the Company that may be
transferred under the LTV 2022 may be subject to recalculation in
the event of bonus issues, splits, rights issues and/or similar
measures, under the terms and conditions of the LTV 2022.
18.2 Transfer of treasury stock on an exchange to cover
expenses for the LTV 2022
The Company may, prior to the AGM in 2024, transfer no more than
500,000 shares of series B in the Company, in order to cover
certain expenses, mainly social security payments. Transfer of the
shares shall be effected on Nasdaq Stockholm at a price within the,
at each time, prevailing price interval for the share as
disseminated by Nasdaq Stockholm.
18.3 Authorization to decide on transfer of treasury stock on
an exchange to cover costs for tax and social security liabilities
for the Participants for the LTV 2022
Authorization for the Board of Directors to decide to, in
conjunction with the delivery of vested shares under LTV 2022,
prior to the AGM in 2024, retain and sell no more than 60% of the
vested shares of series B in the Company in order to cover for the
costs for withholding and paying tax and social security
liabilities on behalf of the Participants in relation to the
Performance Share Awards for remittance to revenue authorities.
Transfer of the shares shall be effected on Nasdaq Stockholm at a
price within the, at each time, prevailing price interval for the
share as disseminated by Nasdaq Stockholm. These shares form a part
of the final number of vested shares to the employees under LTV
2022 and do not incur additional costs to the LTV 2022 for the
Company.
18.4 Directed issue of shares of series C in the Company for
the LTV 2022
Increase of the share capital in the Company with SEK 10,000,000.01 by an issue of 2 million shares
of series C in the Company, each share with a quota value of
approximately SEK 5. The terms and
conditions of the share issue are the following:
- The new shares shall – with deviation from the shareholders'
preferential rights – be subscribed for only by Investor AB or its
subsidiaries.
- The new shares shall be subscribed for during the period as
from Thursday, April 27, 2023, up to
and including Tuesday, May 2, 2023.
Over-subscription may not occur.
- The amount that shall be paid for each new share shall be the
quota value (approximately SEK
5).
- Payment for the subscribed shares shall be made at the time of
subscription.
- The Board of Directors shall be entitled to extend the period
for subscription and payment.
- The new shares shall not entitle the holders to dividend
payment.
- It is noted that the new shares are subject to restrictions
pursuant to Chapter 4, Section 6 (conversion clause) and Chapter
20, Section 31 (redemption clause) of the Swedish Companies
Act.
The Board of Directors proposes that the President and CEO shall
be authorized to make the minor adjustments to the above
resolutions that may prove to be necessary in connection with the
registration with the Swedish Companies Registration Office.
Reasons for deviation from the shareholders' preferential
rights and principles on which the subscription price is
based
The Board of Directors considers that a directed issue of shares
of series C, followed by buy-back and transfer of treasury stock is
the most cost efficient and flexible method to transfer shares
under the LTV 2022. Shares are issued at the share's quota value
and repurchased as soon as the shares have been subscribed for and
registered. The purchase price paid by the Company to the
subscriber equals the subscription price. As compensation to the
subscriber for its assistance in the issuance and buy-back of
shares under items 16, 17, 18 and 19, the Company will pay to the
subscriber an amount totaling SEK
100,000.
18.5 Authorization for the Board of Directors to decide on a
directed acquisition offer for the LTV 2022
Authorization for the Board of Directors to decide that 2.0
million shares of series C in the Company be acquired according to
the following:
- Acquisition may occur by an offer to acquire shares directed to
all holders of shares of series C in Ericsson.
- The authorization may be exercised until the AGM in 2024.
- The acquisition shall be made at a price corresponding to the
quota value of the share (approximately SEK
5 per share).
- Payment for acquired shares shall be made in cash.
Majority rules
The resolution of the AGM on items 18.1-18.5; transfer of
treasury stock to employees and on an exchange, directed share
issue and acquisition offer for the LTV 2022, is proposed to be
taken as one decision, and requires that shareholders representing
at least nine-tenths of the votes cast as well as the shares
represented at the AGM approve the proposal.
Item 19 Resolution on transfer of treasury stock to employees
and on an exchange, directed share issue and acquisition offer in
relation to the earlier resolution on the LTV 2021
Background
The AGM in 2021 resolved to implement LTV 2021 and to secure the
Company's undertakings under LTV 2021 through an equity swap
agreement with a third party. The Board of Directors still
considers that transfer of treasury stock, a proposal that was
withdrawn by the Board of Directors at the AGM 2022, is the most
cost efficient and flexible method to secure the undertakings under
LTV 2021.
The Company has approximately 3.3 billion registered shares. For
LTV 2021, a total of up to 2.1 million shares are required,
which corresponds to approximately 0.1 percent of the total number
of registered shares, hence an issue of new shares is proposed for
LTV 2021. The effect on important key figures is only marginal.
Proposal
19.1 Transfer of treasury stock for the LTV 2021
To secure the delivery of Performance Shares in accordance with
the terms and conditions of the LTV 2021, the Board of Directors
proposes that the AGM resolve that the Company shall have the right
to transfer no more than 1.6 million shares of series B in the
Company less any shares retained by the Company as per item 19.3 on
the following terms and conditions:
- The right to acquire shares shall be granted to such persons
within the Ericsson Group covered by the terms and conditions
pursuant to the LTV 2021. Furthermore, subsidiaries within the
Ericsson Group shall have the right to acquire shares, free of
consideration, and such subsidiaries shall be obligated to
immediately transfer, free of consideration, shares to employees
covered by the terms and conditions of the LTV 2021.
- The employee shall have the right to receive shares during the
period when the employee is entitled to receive shares pursuant to
the terms and conditions of the LTV 2021, i.e. in 2024.
- Employees covered by the terms and conditions of the LTV 2021
shall receive shares of series B in the Company free of
consideration.
- The number of shares of series B in the Company that may be
transferred under the LTV 2021 may be subject to recalculation in
the event of bonus issues, splits, rights issues and/or similar
measures, under the terms and conditions of the LTV 2021.
19.2 Transfer of treasury stock on an exchange to cover
expenses for the LTV 2021
The Company may, prior to the AGM in 2024, transfer no more than
500,000 shares of series B in the Company, in order to cover
certain expenses, mainly social security payments. Transfer of the
shares shall be effected on Nasdaq Stockholm at a price within the,
at each time, prevailing price interval for the share as
disseminated by Nasdaq Stockholm.
19.3 Authorization to decide on transfer of treasury stock on
an exchange to cover costs for tax and social security liabilities
for the Participants for the LTV 2021
Authorization for the Board of Directors to decide to, in
conjunction with the delivery of vested shares under LTV 2021,
prior to the AGM in 2024, retain and sell no more than 60% of the
vested shares of series B in the Company in order to cover for the
costs for withholding and paying tax and social security
liabilities on behalf of the Participants in relation to the
Performance Share Awards for remittance to revenue authorities.
Transfer of the shares shall be effected on Nasdaq Stockholm at a
price within the, at each time, prevailing price interval for the
share as disseminated by Nasdaq Stockholm. These shares form a part
of the final number of vested shares to the employees under LTV
2021 and do not incur additional costs to the LTV 2021 for the
Company.
19.4 Directed issue of shares of series C in the Company for
the LTV 2021
Increase of the share capital in the Company with SEK 10,500,000.01 by an issue of 2.1 million
shares of series C in the Company, each share with a quota value of
approximately SEK 5. The terms and
conditions of the share issue are the following:
- The new shares shall – with deviation from the shareholders'
preferential rights – be subscribed for only by Investor AB or its
subsidiaries.
- The new shares shall be subscribed for during the period as
from Thursday, April 27, 2023, up to
and including Tuesday, May 2, 2023.
Over-subscription may not occur.
- The amount that shall be paid for each new share shall be the
quota value (approximately SEK
5).
- Payment for the subscribed shares shall be made at the time of
subscription.
- The Board of Directors shall be entitled to extend the period
for subscription and payment.
- The new shares shall not entitle the holders to dividend
payment.
- It is noted that the new shares are subject to restrictions
pursuant to Chapter 4, Section 6 (conversion clause) and Chapter
20, Section 31 (redemption clause) of the Swedish Companies
Act.
The Board of Directors proposes that the President and CEO shall
be authorized to make the minor adjustments to the above
resolutions that may prove to be necessary in connection with the
registration with the Swedish Companies Registration Office.
Reasons for deviation from the shareholders' preferential
rights and principles on which the subscription price is
based
The Board of Directors considers that a directed shares of
series C in the Company, followed by buy-back and transfer of
treasury stock is the most cost efficient and flexible method to
transfer shares under the LTV 2021. Shares are issued at the
share's quota value and bought back as soon as the shares have been
subscribed for and registered. The purchase price paid by the
Company to the subscriber equals the subscription price. As
compensation to the subscriber for its assistance in the issuance
and buy-back of shares under items 16, 17, 18 and 19, the Company
will pay to the subscriber an amount totaling SEK 100,000.
19.5 Authorization for the Board of Directors to decide on a
directed acquisition offer for the LTV 2021
Authorization for the Board of Directors to decide that 2.1
million shares of series C in Ericsson be acquired according to the
following:
- Acquisition may occur by an offer to acquire shares directed to
all holders of shares of series C in Ericsson.
- The authorization may be exercised until the AGM in 2024.
- The acquisition shall be made at a price corresponding to the
quota value of the share (approximately SEK
5 per share).
- Payment for acquired shares shall be made in cash.
Majority rules
The resolution of the AGM on items 19.1-19.5; transfer of
treasury stock to employees and on an exchange, directed share
issue and acquisition offer for the LTV 2021, is proposed to be
taken as one decision, and requires that shareholders representing
at least nine-tenths of the votes cast as well as the shares
represented at the AGM approve the proposal.
Item 20 Resolutions on transfer of treasury stock in relation
to the resolutions on the ongoing LTV 2019 and LTV 2020
20.1 Transfer of treasury stock on an exchange to cover
expenses
The AGM in 2022 resolved on a right for the Company to transfer
in total not more than 1.4 million shares of series B in the
Company on a stock exchange to cover certain payments, mainly
social security payments, which may occur in relation to the LTV
2019 and the LTV 2020.
The resolution is valid up to the following AGM. Resolutions on
transfer of treasury stock for the purpose of the above-mentioned
programs must therefore be repeated at subsequent AGMs.
In accordance with the resolutions on transfer of in total not
more than 1.4 million shares, no shares of series B in the Company
have been transferred up to February 22,
2023.
The Board of Directors proposes that the AGM resolve that the
Company may, prior to the AGM in 2024, transfer no more than 1.4
million shares of series B in the Company, or the lower number of
shares of series B, which as per March 29,
2023 remains of the original 1.4 million shares for the
purposes of covering certain payments, primarily social security
payments that may occur in relation to the LTV 2019, and LTV 2020.
Transfer of the shares shall be effected on Nasdaq Stockholm at a
price within the, at each time, prevailing price interval for the
share.
20.2 Authorization to decide on transfer of treasury stock on
an exchange to cover costs for tax and social security liabilities
for the Participants
The AGMs in 2020 and in 2021 resolved to secure the delivery of
Performance Shares in relation to the LTV 2019 and the LTV 2020
through transfer of no more than 4.1 million shares of series B in
the Company to Participants and subsidiaries within the Ericsson
Group.
The Board of Directors proposes that the AGM authorize the Board
of Directors to decide to, in conjunction with the delivery of
vested shares under LTV 2019 and LTV 2020, prior to the AGM in
2024, retain and sell no more than 60% of the vested shares of
series B in the Company in order to cover for the costs for
withholding and paying tax and social security liabilities on
behalf of the Participants in relation to the Performance Share
Awards for remittance to revenue authorities. Transfer of the
shares shall be effected on Nasdaq Stockholm at a price within the,
at each time, prevailing price interval for the share as
disseminated by Nasdaq Stockholm. These shares form a part of the
final number of vested shares to the employees under LTV 2019 and
LTV 2020 and do not incur additional costs to the LTV 2019 and LTV
2020 for the Company.
Majority rules
The resolutions of the AGM on transfer of treasury stock on an
exchange according to each of items 20.1 and 20.2 requires that
shareholders representing at least two-thirds of the votes cast as
well as the shares represented at the AGM approve the
proposals.
Item 21 Resolution on proposal of new Guidelines for
remuneration to Group management
Guidelines for Remuneration to Group Management
The Board of Directors proposes that the AGM 2023 resolves on
the following guidelines for remuneration to group management. In
comparison with the guidelines decided by the AGM 2020, the
guidelines have been updated in order to:
- Adapt the guidelines to ensure the Company's business
strategies and ways of working can be supported through the
lifecycle of the guidelines;
- Clarify the mandate for the Board of Directors and Remuneration
Committee to define meaningful short-term variable compensation
("STV") targets linked to the business plan. This enables STV
targets to be defined and weighed differently for different parts
of the business given the phase in the business lifecycle they are
in as required by the business strategy. Therefore, detailed
requirements for mandatory weighting and definition of STV targets
has been removed;
- Enable for the Board of Directors to potentially include STV in
the remuneration package of the President and CEO. Any inclusion of
STV for the future or current President and CEO will take into
account the aggregated target opportunity of long-term variable
compensation programs and STV; and
- Broaden the pension guidelines for Swedish members of the group
management by removal of specific wordings related to the Swedish
collective pension plan ITP1, to accommodate for potential future
changes in collective pension plans and to allow for supplementary
pension contributions or supplementary cash pension allowance, in
excess of any caps of pension contributions allowed under
collective pension plans.
Introduction
These Guidelines for Remuneration to Group Management (the
"Guidelines") apply to the Executive Team of Telefonaktiebolaget LM
Ericsson (the "Company" or "Ericsson"), including the President and
Chief Executive Officer (the "President and CEO") ("Group
Management"). These Guidelines apply to remuneration agreed and
changes to previously agreed remuneration after the date of
approval of the Guidelines and are intended to remain in place for
four years until the Annual General Meeting of shareholders 2027.
For employments outside of Sweden,
due adaptations may be made to comply with mandatory local rules or
established local practices. In such cases, the overall purpose of
these Guidelines shall be accommodated to the largest extent
possible. These Guidelines do not cover remuneration resolved by
the general meeting of shareholders, such as long-term variable
compensation programs ("LTV").
Objective
These Guidelines aim to ensure alignment with the current
remuneration philosophy and practices applicable for the Company's
employees based on the principles of competitiveness, fairness,
transparency, and performance. In particular to:
- attract and retain highly competent, performing, and motivated
people that have the ability, experience, and skill to deliver on
the Ericsson strategy;
- encourage behavior consistent with Ericsson's culture and core
values;
- ensure fairness in reward by delivering total remuneration that
is appropriate but not excessive, and clearly explained;
- have a total compensation mix of fixed pay, variable pay and
benefits that is competitive where Ericsson competes for talent;
and
- encourage variable remuneration which aligns employees with
clear and relevant targets, reinforces their performance and
enables flexible remuneration costs for Ericsson.
The Guidelines and the Company's strategy and sustainable
long-term interest
A successful implementation of the Company's strategy and
sustainable long-term interests requires that the Company can
attract, retain, and motivate the right talent and can offer
competitive remuneration. These Guidelines aim to allow the Company
to offer the members of the Group Management attractive and
competitive total remuneration. Variable compensation covered by
these guidelines shall be awarded against specific pre-defined and
measurable business targets derived from the short and long-term
business plan approved by the Board of Directors. Targets will
include financial targets at Group, Business Area and/or Market
Area level. In addition, strategic targets, operational targets,
employee engagement targets, customer satisfaction targets,
sustainability and corporate responsibility targets or other lead
indicator targets will be applied as deemed appropriate by the
Remuneration Committee.
The Company operates long-term variable compensation programs
for the Group Management as approved by the Annual General Meeting
("AGM"). Such decisions are not covered by these Guidelines.
Details of Ericsson's current remuneration policy and how we
deliver on our policy and guidelines and information on previously
decided long-term variable compensation programs that have not yet
become due for payment, including applicable performance criteria,
can be found in the Remuneration Report and in Note G2,
"Information regarding members of the Board of Directors, the Group
management" and Note G3, "Share-based compensation" in the annual
report.
Governance of remuneration to Group Management
The Board has established a Remuneration Committee (the
"Committee") to handle compensation policies and principles and
matters concerning remuneration to Group Management. The Board has
authorized the Committee to determine and handle certain issues in
specific areas. The Board may also on occasion provide extended
authorization for the Committee to determine specific matters.
The Committee is authorized to review and prepare for resolution
by the Board salary and other remuneration for the President and
CEO. Further, the Committee shall prepare for resolution by the
Board proposals to the AGM on Guidelines for Remuneration to Group
Management at least every fourth year and on Long-term Variable
compensation programs and similar equity arrangements.
The Committee has the mandate to resolve salary and other
remuneration for the other members of Group Management except for
the President and CEO, including targets for short-term variable
compensation ("STV"), and payout of STV based on achievements and
performance.
To conduct its responsibilities, the Committee considers trends
in remuneration, legislative changes, disclosure rules and the
general global executive remuneration environment. Before preparing
salary adjustment recommendations for the President and CEO for
resolution by the Board and approving any salary adjustments for
the other members of Group Management the Committee reviews salary
survey data, Company results and individual performance. No
employee is present at the Committee's meetings when issues
relating to their own remuneration are being discussed. Similarly,
the President and CEO is not present at Board meetings when issues
relating to the President and CEO's own remuneration are being
discussed. The Committee may appoint independent expert advisors to
assist and advise in its work.
The Chair of the Remuneration Committee along with the Chair of
the Board work together with Ericsson's Investor Relations team,
striving to ensure that healthy contact is maintained as necessary
and appropriate with shareholders regarding remuneration to Group
Management.
Overview of remuneration package covered by these
Guidelines
For Group Management the remuneration package may consist of
fixed salary, short-term and long-term variable compensation (STV
and LTV), pension and other benefits.
Below are the key components of remuneration of Group Management
covered by these Guidelines, including why they are used, their
operation, opportunity levels and related performance measures. In
addition, the AGM has resolved and may in the future decide to
implement LTV for Group Management. The ongoing share-based LTV
programs resolved by the AGM have been designed to provide
long-term incentives for the members of Group Management and to
incentivize the Company's performance creating long-term value. The
aim is to attract, retain and motivate executives in a competitive
market through performance-based share related incentives and to
encourage the build-up of significant equity holdings to align the
interests of the members of Group Management with those of
shareholders. The vesting period under the ongoing share-based LTV
programs resolved by the shareholders is three years and vesting is
subject to the satisfaction of identified performance criteria.
Although LTV is an important component of the remuneration of Group
Management, it is not covered by these Guidelines, because these
programs are resolved separately by the AGM.
Element and purpose
Fixed salary
Fixed compensation paid at set times.
Purpose:
- attract and retain the executive talent required to implement
Ericsson's strategy
- deliver part of the annual compensation in a predictable
format
Description
Salaries shall be set taking into account:
- Ericsson's overall business performance
- business performance of the Unit that the individual leads
- year-on-year performance of the individual
- external economic environment
- size and complexity of the position
- external market data
- pay and conditions for other employees based in locations
considered to be relevant to the role.
When setting fixed salaries, the impact on total remuneration,
including pensions and associated costs, shall be taken into
consideration.
Element and purpose
Short-term variable compensation (STV)
STV is a variable compensation plan that shall be measured
against targets derived from the business plan and paid over a
single year.
Purpose:
- align members of Group Management with clear and relevant
targets to Ericsson's strategy and sustainable long-term
interests
- provide individuals an earning opportunity for performance at
flexible cost to the Company
Description
The STV shall be paid in cash every year after the Committee
and, as applicable, the Board have reviewed and approved
performance against targets which are normally determined at the
start of each year for each member of Group Management.
Target pay-out opportunity for any financial year may be up to
150 percent of annual fixed salary of the individual. This shall
normally be determined in line with the external market practices
of the country of employment. Maximum pay-out shall be up to two
times the target pay-out opportunity (i.e., no more than 300
percent of annual fixed salary). Any existing long-term variable
pay-opportunity should be taken into account when determining
target opportunity for STV (and vice versa).
The STV shall be based on measures linked to the annual business
plan and to Ericsson's long-term strategy and sustainability.
Measures will include financial targets at Group, Business Area
and/or Market Area level (for relevant members of Group
Management). Other potential measures may include strategic
targets, operational targets, employee engagement targets, customer
satisfaction targets, sustainability and corporate responsibility
targets or other lead indicator targets.
At the end of the performance period for each STV cycle, the
Board and the Committee shall assess performance versus the
measures and determine the formula-based outcome using the
financial information made public by the Company for the financial
targets when applicable.
The Board and the Committee reserve the right to:
- Revise any or all of the STV targets at any time
- Adjust the STV targets retroactively under extraordinary
circumstances
- Reduce or cancel STV if Ericsson faces severe economic
difficulties, for instance in circumstances as serious as no
dividend being paid
- Adjust STV in the event that the results of the STV targets are
not a true reflection of business performance
- Reduce or cancel STV for individuals either whose performance
evaluation or whose documented performance feedback is below an
acceptable level or who are on performance counselling
The Board and the Committee shall have the right in their
discretion to:
- Deny, in whole or in part, the entitlement of an individual to
the STV payout in case an individual has acted in breach of
Ericsson's Code of Business Ethics
- Claim repayment in whole or in part the STV paid in case an
individual has acted in breach of Ericsson's Code of Business
Ethics
- Reclaim STV paid to an individual on incorrect grounds such as
restatement of financial results due to incorrect financial
reporting, non-compliance with a financial reporting requirement
etc.
Element and purpose
Pension
Contributions paid towards retirement fund.
Purpose:
- Attract and retain the executive talent required to implement
Ericsson's strategy
- Facilitate planning for retirement by way of providing
competitive retirement arrangements in line with local market
practices
Description
The operation of the pension plan shall follow competitive
practice in the individual's home country and may contain various
supplementary plans in addition to any national system for social
security.
Pension plans should be defined contribution plans unless the
individual concerned is subject to defined benefit pension plan
under mandatory collective bargaining agreement provisions or
mandatory local regulations.
For Group Management members in Sweden:
- Pension benefits shall be granted based on a defined
contribution plan except where law or collective bargaining
agreement require a defined benefit pension. The pensionable salary
shall include fixed salary and, where required by law or collective
bargaining agreement, any variable salary.
- A supplementary pension contribution can be paid amounting to a
maximum of 35 percent of the fixed annual salary that exceeds any
cap in collective pension plans, unless a higher percentage is
obliged by law or collective bargaining agreement.
- The supplementary pension contribution can, as an alternative
to a pension contribution, be exchanged for a cash payment provided
that it is done in a way that is cost-neutral for the Company.
Members of Group Management employed outside of Sweden may participate in the local market
competitive pension arrangements that apply in their home countries
in line with what is offered to other employees in the same
country.
In some special circumstances where individuals cannot
participate in the local pension plans of their home countries of
employment:
- Cash equivalent to pension may be provided as a taxable
benefit, or
- Contributions may be made to an international pension fund on
behalf of the individual on a cost-neutral basis
In all cases the annual pension contributions shall be capped at
70 percent of annual fixed salary.
Element and purpose
Other Benefits
Additional tangible or intangible compensation paid annually
which do not fall under fixed salary, short-term and long-term
variable compensation, or pension.
Purpose:
- Attract and retain the executive talent required to implement
Ericsson's strategy
- deliver part of the annual compensation in a predictable
format.
Description
Benefits offered shall consider the competitive practices in the
individual's country of employment and should be in line with what
is offered to other senior employees in the same country and may
evolve year on year.
Benefits may for example include Company phones, Company cars,
wellbeing assistance, medical and other insurance benefits, tax
support, travel, Company gifts and any international relocation
and/or commuting benefits if the individual is required to relocate
and/or commute internationally to execute the requirements of the
role.
Benefit opportunities shall be set in line with competitive
market practices and shall reflect what is offered to other senior
employees in the individual's country of employment.
The levels of benefits provided may vary year on year depending
on the cost of the provision of benefits to the Company.
Other benefits shall be capped at 10% of annual fixed salary for
members of Group Management located in Sweden.
Additional benefits and allowances for members of Group
Management who are commuters into Sweden or who are on long-term assignment
("LTA") in countries other than their home countries of employment,
shall be determined in line with the Company's international
mobility policy which may include (but is not limited to) commuting
or relocation costs; cost of living adjustment, housing, home
travel or education allowance; tax and social security equalization
assistance.
Consideration of remuneration offered to the Company's
employees
When developing these Guidelines, the Board and the Committee
have considered the total remuneration and employment conditions of
the Company's employees by reviewing the application of Ericsson's
remuneration policy for the wider employee population to ensure
consistency.
There is clear alignment in the remuneration components for the
members of Group Management and the Company's employees in the way
that remuneration policy is applied as well as the methods followed
in determining fixed salaries, short-term and long-term variable
compensation, pension, and benefits, which are to be applied
broadly and consistently throughout the Company. The targets under
short-term variable compensation are similar and the performance
measures under long-term variable compensation program are the same
for the members of Group Management and other eligible employees of
the Company. However, the proportion of pay that is linked to
performance is typically higher for Group Management in line with
market practice and the higher levels of total compensation
applicable at that level.
Employment contracts and termination of employment
The members of Group Management are employed on permanent
rolling contracts. The maximum mutual notice period is no more than
12 months. In case of termination by the employee, the employee has
no right to severance pay.
In any case, the fixed salary paid during the notice period plus
any severance pay payable will not together exceed an amount
equivalent to the individual's 24 months fixed salary unless
otherwise determined by local legislation or collective bargaining
agreements.
The employee may be entitled to severance pay up until the
agreed retirement age or, if a retirement age has not been agreed,
until the month when the employee turns 65. In a case where the
employee is entitled to severance pay from a date later than 12
months prior to retirement, the severance pay shall be reduced in
proportion to the time remaining and calculated only for the time
as of the date when the employee's employment ceases (i.e., the end
of the period of notice) and until the time of retirement.
Severance pay shall be reduced by 50 percent of the remuneration
or equivalent compensation the employee receives, or has become
entitled to, from any other employer or from his/her own or other
activities during the period that severance is paid to the employee
by the Company.
The Company shall have the right to terminate the employment
contract and dismiss the employee with immediate effect, without
giving any advance notice and entitlement to severance pay, if the
employee commits a serious breach of his/her obligations towards
the Company.
Normally disputes regarding employment agreements or any other
agreements concerning the employment of the members of Group
Management, the way such agreements have been arrived at,
interpreted, or applied, as well as any other litigation
proceedings from legal relations based on such agreements, shall be
settled by arbitration by three arbitrators in accordance with the
Rules of the Arbitration Institute of the Stockholm Chamber of Commerce. Irrespective of
the outcome of any arbitral award, the Company may, in the relation
between the parties, carry all fees and expenses charged by the
arbitrators and all of its own litigation costs (including
attorney's fees), except in the event the arbitration proceedings
were initiated by the employee without reasonable cause.
Recruitment policy for new members of Group
Management
In determining the remuneration of a new member of Group
Management, the Board and the Committee shall take into
consideration all relevant factors to ensure that arrangements are
in the best interests of the Company and its shareholders. These
factors include:
- The role being taken on
- The skills, experience and caliber of the candidate
- The level and type of remuneration opportunity received at a
previous employer
- The geography in which the candidate is being recruited from
and whether any relocation allowance is required
- The circumstances of the candidate.
- The current external market and salary practice
- Internal relativities
Additional arrangements
By way of exception, additional arrangements can be made when
deemed appropriate and necessary to recruit or retain an
individual. Such arrangement could be in the form of short-term or
long-term variable compensation or fixed component and can be
renewed, but each such arrangement shall be limited in time and
shall not exceed a period of 36 months and twice the annual fixed
salary that the individual would have received if no additional
arrangements were made. In addition, if appropriate, different
measures and targets may be applied to the new appointment's
incentives in the first year.
In addition, it may on a case-by-case basis be decided by the
Board and the Committee respectively to compensate an individual
for remuneration forfeited from a previous employer during
recruitment. The Board and the Committee will consider on a
case-by-case basis if all or some of the remuneration including
incentives forfeited need to be 'bought-out'. If there is a buy-out
of forfeited incentives, this will take into account relevant
factors including the form they were granted (cash vs. shares),
performance conditions attached to these awards and the time they
would have vested/paid. Generally, buy-out awards will be made on a
comparable basis to those forfeited.
In the event of an internal candidate being promoted to Group
Management, legacy terms and conditions may be honored, including
pension and benefit entitlements and any outstanding incentive
awards. If a Group Management member is appointed following a
merger or acquisition with/of another company, legacy terms and
conditions may also be honored for a maximum period of 36
months.
Board of Directors' discretions
The Board upon recommendation from the Committee may in a
specific case decide to temporarily deviate from these Guidelines
in whole or in part based on its full discretion in unusual
circumstances such as:
- upon change of the President and CEO,
- upon material changes in the Company structure, organization,
ownership, and business (for example takeover, acquisition, merger,
demerger etc.) which may require adjustments in STV and LTV or
other elements to ensure continuity of Group Management, and
- in any other circumstances, provided that the deviation is
required to serve the long-term interests and sustainability of the
Company or to assure its financial viability.
The Committee is responsible for preparing matters for
resolution by the Board, and this includes matters relating to
deviations from these Guidelines. Any such deviation will be
disclosed in the Remuneration Report for the relevant year.
Shares and votes
There are in total 3,334,151,735 shares in the Company:
261,755,983 shares of series A and 3,072,395,752 shares of series
B, corresponding to in total 568,995,558.2 votes. The Company's
holding of treasury stock as of February 22,
2023, amounts to 4,009,306 shares of series B, corresponding
to 400,930.6 votes.
Shareholders' right to receive information at the AGM
The Board of Directors and the President and CEO shall, if any
shareholder so requests and the Board of Directors believes that it
can be done without material harm to the Company, provide
information regarding circumstances that may affect the assessment
of an item on the agenda and circumstances that may affect the
assessment of the Company's or its subsidiaries' financial
situation and the Company's relation to other companies within the
Group.
Documents
The complete proposals of the Nomination Committee with respect
to items 1, and 9-15 above, including a description of the work of
the Nomination Committee and Exhibit 1 and 2 to the Nomination
Committee's proposals are available at the Company's website
www.ericsson.com. In respect of all other items, complete proposals
are provided under the respective item in the notice. The documents
will be sent upon request to shareholders providing their address
to the Company.
The annual report (including the Board of Directors' statement
relating to the proposal under item 8.4 above), the auditor's
report, the remuneration report, the auditor's statement regarding
the Guidelines for Remuneration to Group management and the Board
of Directors' statement relating to the proposals under items 16.2,
17.2, 18.5 and 19.5 above will be available at the Company and on
the Company's website www.ericsson.com no later than three weeks
prior to the AGM. The documents will be sent upon request to
shareholders providing their address to the Company.
Stockholm, February
2023
Telefonaktiebolaget LM Ericsson (publ)
The Board of Directors
[1] Calculated as if the number of non-employed Board members
elected by the AGM was ten persons and an unchanged number of Board
Committee members. A calculation in relation to the current
proposal of nine non-employed Board members elected by the AGM and
an unchanged number of Committee members would instead entail a
decrease of the fees by approximately 3.1% compared with the total
fees to the Board and Committee members resolved by the AGM
2022.
[2] Total shareholder return, i.e. share price growth including
dividends.
[3] To provide a stable assessment of performance, the TSR
development will be calculated based on the average closing price
of the Ericsson series B share on Nasdaq Stockholm (or the
corresponding closing share price of the relevant peer group
company) for the three-month period immediately prior to the
commencement and expiration of the Performance Period.
[4] The Peer Group consists of the following companies: Cap
Gemini, CGI Group, Cisco Systems, Cognizant, Corning, F5 Networks,
International Business Machines, Juniper Networks, Motorola
Solutions, Nokia, and Qualcomm. TSR will be measured in SEK for all
companies in line with best practice.
[5] Measured as the carbon dioxide equivalents ("CO2e") of
several greenhouse gases including, but not limited to, carbon
dioxide. The so-called high-altitude effect of greenhouse gas
emissions from air travel is not to be considered in these
calculations.
[6] Corresponding to emissions in Scope 1, Scope 2
(market-based) and Scope 3 category Business Travel, as defined in
the Greenhouse Gas Protocol, and reported in the Company's annual
statutory Sustainability and Corporate Responsibility report.
[7] GHG emissions are reported on a calendar year basis but for
practical and timing reasons, some of the emissions in scope of the
subcomponent are measured on the twelve-month period December up to
and including November.
[8] Total shareholder return, i.e. share price growth
including dividends.
[9] To provide a stable assessment of performance, the TSR
development will be calculated based on the average closing price
of the shares of series B in Ericsson on Nasdaq Stockholm (or the
corresponding closing share price of the relevant peer group
company) for the three-month period immediately prior to the
commencement and expiration of the Performance Period.
[10] The Peer Group consists of the following companies: Cap
Gemini, CGI Group, Cisco Systems, Cognizant, Corning, F5 Networks,
International Business Machines, Juniper Networks, Motorola
Solutions, Nokia, and Qualcomm. TSR will be measured in SEK for all
companies in line with best practice.
[11] Measured as the carbon dioxide equivalents ("CO2e") of
several greenhouse gases including, but not limited to, carbon
dioxide. The so-called high-altitude effect of greenhouse gas
emissions from air travel is not to be considered in these
calculations.
[12] Corresponding to emissions in Scope 1, Scope 2
(market-based) and Scope 3 category Business Travel, as defined in
the Greenhouse Gas Protocol, and reported in the Company's annual
statutory Sustainability and Corporate Responsibility report.
[13] GHG emissions are reported on a calendar year basis but for
practical and timing reasons, some of the emissions in scope of the
subcomponent are measured on the twelve-month period December to
and including November.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Peter Nyquist, Head of Investor
Relations
Phone: +46 705 75 29 06
E-mail: peter.nyquist@ericsson.com
Additional contacts
Stella Medlicott, Senior Vice
President, Marketing and Corporate Relations
Phone: +46 730 95 65 39
E-mail: media.relations@ericsson.com
Investors
Lena Häggblom, Director, Investor Relations
Phone: +46 72 593 27 78
E-mail: lena.haggblom@ericsson.com
Alan Ganson, Director, Investor
Relations
Phone: +46 70 267 27 30
E-mail: alan.ganson@ericsson.com
Media
Kristoffer Edshage, Head of Regulatory and Financial
Communication
Phone: +46 722 20 44 46
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
ABOUT ERICSSON:
Ericsson enables communications service providers and
enterprises to capture the full value of connectivity. The
company's portfolio spans the following business areas: Networks,
Cloud Software and Services, Enterprise Wireless Solutions, Global
Communications Platform, and Technologies and New Businesses. It is
designed to help our customers go digital, increase efficiency and
find new revenue streams. Ericsson's innovation investments have
delivered the benefits of mobility and mobile broadband to billions
of people globally. Ericsson stock is listed on Nasdaq Stockholm
and on Nasdaq New York. www.ericsson.com
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SOURCE Ericsson