STOCKHOLM, Feb. 28, 2024 /PRNewswire/ -- The Annual General
Meeting of shareholders of Telefonaktiebolaget LM Ericsson
(NASDAQ: ERIC) will be held on Wednesday,
April 3, 2024 at 1 pm.
The Nomination Committee proposes among other things:
- Karl Åberg as new member 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 and Executives, with a one-year Group EBITA (operating income)
target for 2024, three-year total shareholder return targets, all
targets with a three-year vesting period (item 16).
- 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 Program I 2023 (item 17).
- Transfer of treasury stock on an exchange in relation to the
Long-Term Variable Compensation Programs 2021, 2022 and II 2023
(item 18).
Notice of the Annual General Meeting of shareholders 2024 of
Telefonaktiebolaget LM Ericsson
The shareholders of Telefonaktiebolaget LM Ericsson (reg. no
556016-0680) (the "Company" or "Ericsson") are
invited to participate in the Annual General Meeting of
shareholders ("AGM") to be held on Wednesday, April 3, 2024 at 1 p.m. CEST at the Company's premises: Open Box,
Grönlandsgatan 8, Kista/Stockholm. Registration for the AGM starts at
12:00 p.m. CEST. Shareholders may
also exercise their voting rights by post before the AGM.
The AGM will be conducted in Swedish and simultaneously
translated into English.
Registration and notice of participation
A) Participation at the meeting venue
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, as of Friday, March 22, 2024; and
- give notice of participation to the Company no later than
Tuesday, March 26, 2024
- 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 include 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 must 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
registration at the AGM, the power of attorney, certificate of
registration and other documents of authority should be sent to the
Company at the address above, in connection with the notice of
participation. Forms of power of attorney in Swedish and English
are available on Ericsson's website, www.ericsson.com.
B) 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, as of Friday, March 22, 2024; and
- give notice of participation 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 Tuesday, March 26, 2024.
A special form must be used for postal voting. The form is
available on Ericsson's website www.ericsson.com. The completed and
signed postal voting form may 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 submit their postal votes electronically by verification
with BankID via Ericsson's website, www.ericsson.com. The completed
form must be received by the Company/Euroclear Sweden AB no later
than Tuesday, March 26, 2024.
The shareholder may not provide special instructions or
conditions in the postal voting form. If such instructions or
conditions are included, the postal vote (in its entirety) is
invalid. Further instructions and conditions are included in the
form for postal voting.
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) must be attached to 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 – A) Participating at the meeting venue
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
Friday, March 22, 2024. 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
procedures, at such a time in advance as required by the
nominee.
Voting rights registrations that have been made by the nominee
on or before Tuesday, March 26, 2024 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 of the AGM
- 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 on
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 2023
- 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 2023; 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)
- Jonas Synnergren (re-election)
- Jacob Wallenberg
(re-election)
- Christy Wyatt (re-election)
- Karl Åberg (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 2024
(LTV 2024)
- Resolution on implementation of the LTV 2024
- Resolution on transfer of treasury stock to employees and on an
exchange, directed share issue and acquisition offer for the LTV
2024
- Resolution on Equity Swap Agreement with third party in
relation to the LTV 2024
- 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 I 2023 (LTV I 2023)
- Transfer of treasury stock in relation to the resolutions on
the ongoing Long-Term Variable Compensation Programs LTV 2021, LTV
2022 and LTV II 2023
- 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
- 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 Nomination Committee Johan Forssell (Investor AB), Bengt Kjell (AB Industrivärden) (replaced Karl
Åberg on November 30, 2023),
Anders Oscarsson (AMF Tjänstepension
and AMF Fonder), Christer Gardell
(Cevian Capital Partners Limited) and Jan
Carlson (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
April 5, 2024, and SEK 1.35 per share with the record date
October 2, 2024. Assuming these dates
will be the record dates, Euroclear Sweden AB is expected to
disburse SEK 1.35 per share on
April 10, 2024, and SEK 1.35 per share on October 7, 2024.
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 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 4,640,000 to the Chair of the
Board of Directors (previously SEK
4,500,000);
- SEK 1,175,000 to each of the
other Board members (previously SEK
1,140,000);
- SEK 540,000 to the Chair of the
Audit and Compliance Committee
(previously SEK 495,000);
- SEK 310,000 to each of the other
members of the Audit and Compliance Committee (previously
SEK 285,000);
- SEK 230,000 to the Chair of the
Enterprise Business and Technology Committee (previously
SEK 210,000);
- SEK 200,000 to each of the other
members of the Enterprise Business and Technology Committee
(previously SEK 185,000);
- SEK 220,000 to each Chair of the
Finance and the Remuneration Committee (previously
SEK 210,000); and
- SEK 195,000 to each of the other
members of the Finance and the Remuneration Committee
(previously SEK 185,000).
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 3.8% 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 2023.
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 remains 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 2024
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 2024. 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 2029, 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 as members of the Board:
11.1 Jon Fredrik Baksaas;
11.2 Jan Carlson;
11.3 Carolina Dybeck Happe;
11.4 Börje Ekholm;
11.5 Eric A. Elzvik;
11.6 Kristin S. Rinne;
11.7 Jonas Synnergren;
11.8 Jacob Wallenberg; and
11.9 Christy Wyatt.
11.10 The Nomination Committee proposes that Karl Åberg be
elected as new Board member of Ericsson.
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 its diversity policy. Focusing on improving
the gender balance of the Board 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 ESG areas (areas within environmental,
social and governance) 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.
Helena Stjernholm has informed
the Nomination Committee that she will not stand for re-election at
the AGM 2024. 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, Jonas Synnergren, Jacob Wallenberg and Christy Wyatt, and new election of Karl Åberg as
member of the Board.
Karl Åberg has long-term experience in investments and asset
management. He is currently the Deputy Chief Executive Officer,
head of the investment organization and the finance function at AB
Industrivärden, and a member of the Board in Alleima and SCA.
Previously, Karl Åberg was partner at Zeres Capital, partner at
CapMan, and he has held various roles at Handelsbanken Capital
Markets.
It is the Nomination Committee's assessment that Karl Åberg adds
valuable expertise and experience to the Board, and that Karl
Åberg's extensive governance and financial knowledge will be of
additional value to Ericsson and will further strengthen the
Board.
The Nomination Committee believes that the proposed Board
composition provides the Company with the right conditions for
realizing its long-term potential. Out of the proposed Board
members to be elected by the AGM (excluding the President and CEO)
33% are women. Gender balance continues to be a key priority for
the Nomination Committee, and the Committee will continue to work
to improve the gender balance on the Board of Directors over
time.
Information regarding proposed Board members
Information regarding the proposed Board members is presented in
Exhibit 2 to the Nomination Committee's proposal.
Independence of Board members
The Nomination Committee has made the following assessments in
terms of applicable Swedish independence requirements and US NASDAQ
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. Jonas Synnergren
g. Jacob Wallenberg
h. Christy Wyatt
i. Karl Åberg
2. From among the Board members reported in
(i) above, the Nomination Committee considers that 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 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 12 Election of the Chair of the Board of
Directors
The Nomination Committee proposes that Jan Carlson be re-elected Chair of the Board of
Directors.
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, as in 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 2024 until the end of the AGM 2025 (re-election).
Item 16 Implementation of LTV 2024 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") and for employees classified as executives
("Executives") 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 the
Executives and align their interests with the long-term
expectations and the interests of the shareholders.
Upon evaluation of the currently ongoing LTV programs for the ET
(LTV 2021, LTV 2022 and LTV I 2023) and the ongoing LTV program for
the Executives (LTV II 2023), 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 LTV I 2023 and LTV II 2023 were put
forward to the AGM 2023 as two separate programs: LTV I 2023 for
the ET and LTV II 2023 for the Executives. For administrative
reasons, the Board of Directors has decided to put forward the
Long-Term Variable Compensation Program 2024 ("LTV 2024") as one
program applicable to both the ET and the Executives. The ongoing
LTV programs have further enabled the Company to attract, retain
and motivate senior leaders and offer them globally competitive
remuneration, and remain committed to create increased shareholder
value. In order to further strengthen Ericsson's, as well as the
ET's and 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 2024 an LTV 2024 for the ET and the Executives.
LTV 2024 is an integral part of the Company's remuneration
strategy and the Board of Directors in particular expects the
members of the ET and the Executives 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 2024
The Board of Directors proposes that the AGM 2024 resolve on the
LTV 2024 for the ET and the Executives comprising a maximum of 10.4
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
the ET and the Executives ("Participants"), thereby creating
long-term value for the shareholders. The aim is to attract, retain
and motivate senior leaders 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 and the Executives' 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 and the Executives, currently comprising 215
employees, including the President and CEO. Awards under LTV 2024
("Performance Share Awards") will be granted free of charge
entitling the Participant, provided that, among other things,
certain performance criteria as set out below are met, to receive a
number of shares at no consideration, 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 2024 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 2024. For 2024, the value of the underlying shares in respect
of the Performance Share Awards made to the President and CEO will
not exceed 150% of the Annual Base Salary at the time of grant, and
for other Participants, the value will not exceed 100% 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 200% 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 2023.
Performance criteria
The vesting of the Performance Share Awards will be subject to
the satisfaction of a performance criterion related to 2024 Group
EBITA (earnings (loss) before interest, taxes, amortizations and
write-downs of acquired intangible assets) (operating income),
along with performance criteria related to three-year total
shareholder return ("TSR"[1]) and Group Environmental Social
Governance ("ESG"), which will determine what portion (if any) of
the Performance Share Awards will vest at the end of the Vesting
Period.
The 2024 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, 2024
– December 31, 2026 ("Performance
Period"[2]). 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:
- 2024 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 2024 financial year. The 2024 Group
EBITA (operating income) performance criterion established by the
Board of Directors will stipulate a minimum level and a maximum
level. The 2024 Group EBITA (operating income) target is not
disclosed due to stock market and competition considerations. The
vesting level of Performance Share Awards related to 2024 Group
EBITA (operating income) performance criterion will be determined
by the Board of Directors when the audited result for the financial
year 2024 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 2024 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
2027.
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
eleven peer companies ("Peer Group"[3]). 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[4] from service fleet vehicles, energy
consumption at facilities and from business travel[5].
Subcomponent target- and corresponding achievement levels are
defined in the schedule below and broken down for each of the three
years[6] 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)
(%)
2024
2025
2026
0
138
133
126
100
122
117
110
200
114
110
102
Illustrative example: first, if reported emissions in scope
for the year 2024 are 114 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 2025 are 117 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 2026 are 126 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 26% 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 27% 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 25% 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 25% but is below 27% 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 2026 are available.
Information about the outcome of the performance criteria will
be provided no later than in the annual report for the financial
year 2026.
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 2024 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 LTV 2024.
The Company's current holding of treasury stock is not
sufficient for the implementation of the LTV 2024. 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 and 17, 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, 2017 and 2023.
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 2024,
including financing costs and social security fees, is estimated to
range between SEK 260 million and
SEK 475 million distributed over the
years 2024-2027. The costs will depend on the future development of
the price of Ericsson series B share.
The administration cost for hedging the financial exposure of
the LTV 2024 by way of an equity swap agreement is currently
estimated to approximately SEK 70
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 and
17, regardless of the number of share issuances).
Dilution
The Company has approximately 3.3 billion registered shares. As
per February 27, 2024, the Company
held approximately 12.5 million shares in treasury. The number of
shares that may be required for ongoing LTV programs (2021, 2022,
and II 2023) as per February 27,
2024, is estimated to approximately 10 million shares,
corresponding to approximately 0.30 percent of the number of
registered shares of the Company. In order to implement the LTV
2024, a total of up to 10.4 million shares are required, which
corresponds to approximately 0.31 percent of the total number of
registered shares of the Company, hence an issue of new shares of
series C, followed by a buy-back, is proposed for the
implementation of LTV 2024. 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
2024
a. Transfer of treasury stock under the LTV 2024
To secure the delivery of Performance Shares in accordance with
the terms and conditions of the LTV 2024, the Board of Directors
proposes that the AGM resolve that the Company shall have the right
to transfer no more than 8.6 million shares of series B in the
Company less any shares retained by the Company as per item 16.2 c)
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 2024. 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 2024.
- 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 2024.
- Employees covered by the terms and conditions of the LTV 2024
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 2024 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 2024.
b. Transfer of treasury stock on an exchange to cover
expenses for the LTV 2024
The Company may, prior to the AGM in 2025, transfer no more than
1.8 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 in the LTV 2024
Authorization for the Board of Directors to decide to, in
conjunction with the delivery of vested shares under LTV 2024,
prior to the AGM in 2025, retain and sell no more than 70% of the
vested shares of series B in the Company in order to cover 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
2024 and do not incur additional costs to the LTV 2024 for the
Company.
d. Directed issue of shares of series C in the Company for
the LTV 2024
Increase of the share capital in the Company by SEK 52,000,000.01 through an issue of 10.4
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 April 25, 2024, up to and
including May 2, 2024.
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 2024. 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 for the LTV 2024
Authorization for the Board of Directors to decide that 10.4
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 2025.
- 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 2024
In the event that the required majority for approval is not
reached under item 16.2 above, the financial exposure of the LTV
2024 shall be hedged by the Company entering into an equity swap
agreement with a third party, under which the third party may, in
its own name, acquire and transfer shares of series B in the
Company to employees covered by the LTV 2024.
Majority rules
The resolution of the AGM on implementation of the LTV 2024
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 2024
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.
Description of other ongoing long-term variable compensation
programs
In addition to the LTV programs 2021, 2022 and I 2023, which are
directed at the President and CEO and the members of the ET, and
LTV II 2023, which is directed at the Executives, the Company has
other ongoing long-term variable compensation programs directed at
other employees within the Group. 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 one other share-related compensation program for 2024:
the Key Contribution Plan 2024 ("KC Plan 2024"). Ericsson has also
implemented an all-employee share purchase plan in 2021 (ESPP).
The KC Plan 2024
The KC Plan 2024 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 2024. 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 2024 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 30 million synthetic shares will be awarded under the
KC Plan 2024. The maximum total cost effect of the KC Plan 2024 on
the income statement, including social security fees, is estimated
to be approximately SEK 5 billion
distributed over the years 2024-2027. 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 79 countries for 88,000 eligible employees of which 15,099
were actually participating at year-end 2023.
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 55,000 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 2023 in the Notes
to the consolidated financial statements, Note G3: Share-based
compensation and on the Company's website.
Item 17 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 I 2023
The AGM in 2023 resolved to implement Long-Term Variable
Compensation Program I 2023 ("LTV I 2023") and to secure
the Company's undertakings under LTV I 2023 through an equity swap
agreement with a third party. The Board of Directors still
considers that transfer of treasury stock, a proposal that was not
approved by the AGM 2023, is the most cost efficient and flexible
method to secure the undertakings under LTV I 2023.
The Company has approximately 3.3 billion registered shares. For
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, hence an issue of new shares of series C,
followed by a buy-back, is proposed for LTV I 2023. The effect on
important key figures is only marginal.
a. Transfer of treasury stock under the LTV I 2023
To secure the delivery of Performance Shares in accordance with
the terms and conditions of the LTV I 2023, the Board of Directors
proposes that the AGM resolve that the Company shall have the right
to transfer no more than 3.4 million shares of series B in the
Company less any shares retained by the Company as per item 17 c)
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.
- 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 for the LTV I 2023
The Company may, prior to the AGM in 2025, 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 in the LTV I 2023
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 2025, retain and sell no more than 60% of the
vested shares of series B in the Company in order to cover 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 for
the LTV I 2023
Increase of the share capital in the Company by SEK 20,500,000.01 through 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 April 25, 2024, up to and
including May 2, 2024.
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 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. As compensation to the
subscriber for its assistance in the issuance and buy-back of
shares under items 16 and 17, the Company will pay to the
subscriber an amount totaling SEK
100,000.
e. Authorization for the Board of Directors to decide on a
directed acquisition offer for the LTV I 2023
Authorization for the Board of Directors to decide that 4.1
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 2025.
- 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 transfer of treasury stock to
employees and on an exchange, directed share issue and acquisition
offer for the LTV I 2023 according to item 17 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 18 Resolutions on transfer of treasury stock in relation
to the resolutions on the ongoing LTV 2021, LTV 2022 and LTV II
2023
18.1 Transfer of treasury stock on an exchange to cover
expenses
The AGM in 2023 resolved on a right for the Company to
transfer in total no more than 2 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
Long-Term Variable Compensation Programs LTV 2021, LTV 2022 and LTV
II 2023 (the "Programs").
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. None of
these 2 million shares of series B in the Company have been
transferred up to February 27,
2024.
The Board of Directors proposes that the AGM resolve that the
Company may, prior to the AGM in 2025, transfer no more than 2
million shares of series B in the Company, or the lower number of
shares of series B, which as per April 3,
2024 remain of the original 2 million shares for the
purposes of covering certain payments, primarily social security
payments that may occur in relation to the Programs. Transfer of
the shares shall be effected on Nasdaq Stockholm at a price within
the, at each time, prevailing price interval for the share.
18.2 Authorization to decide on transfer of treasury stock on
an exchange to cover costs for tax and social security liabilities
for the Participants
Previous AGMs have resolved to secure the delivery of Performance
Shares in relation to the Programs through transfer of in total no
more than 8 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 the Programs, prior to the AGM in 2025, 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 the Programs and do not incur additional costs
to the Programs for the Company.
Majority rules
The resolutions of the AGM on transfer of treasury stock on an
exchange according to each of items 18.1 and 18.2 requires
that shareholders representing at least two-thirds of the votes
cast as well as the shares represented at the AGM approve the
proposals.
Shares and votes
There are in total 3,344,151,735 shares in the Company:
261,755,983 shares of series A and 3,082,395,752 shares of series
B, corresponding to in total 569,995,558.2 votes. The Company's
holding of treasury stock as of February 27,
2024, amounts to 12,544,543 shares of series B,
corresponding to 1,254,454.3 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 form of power of attorney, the postal voting form and 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
and 17 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 2024
Telefonaktiebolaget LM Ericsson (publ)
The Board of Directors
[1] Total shareholder return, i.e., share price growth
including dividends.
[2] 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.
[3] 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.
[4] 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.
[5] 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.
[6] 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.
FOR FURTHER INFORMATION, PLEASE CONTACT
Contact person
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
Ralf Bagner, Head of Media
Relations
Phone: +46 76 128 47 89
E-mail: ralf.bagner@ericsson.com
Media relations
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
The following files are available for download:
https://mb.cision.com/Main/15448/3936772/2632879.pdf
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Notice of Ericsson’s
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