Remuneration

Description of ASSA ABLOY's system of variable remuneration to senior executives and of each outstanding equity- and equity-price-related incentive program.

Below follows a description of ASSA ABLOY’s system of variable remuneration to senior executives and of each outstanding share- and share-price-related incentive program in accordance with the Swedish Code of Corporate Governance, Section 10.3. The remuneration complies with the 2016 Annual General Meeting’s remuneration guidelines for senior executives. The President and CEO and other members of the Executive Team are considered senior executives.

System of variable remuneration to senior executives

The variable part of the remuneration to senior executives is paid partly in cash and partly in the form of shares.

Senior executives should have the opportunity to receive variable cash remuneration based on the outcome in relation to financial targets and, when applicable, individual targets. This remuneration should be the equivalent to a maximum 75 percent of the basic salary (excluding social security costs).

In addition, senior executives should, within the framework of the long-term incentive program (LTI 2016), have the opportunity to receive variable remuneration in the form of shares based on the outcome in relation to determined target levels in respect of earnings per share during 2016. This remuneration model also includes the right, when purchasing shares under certain conditions, to receive free matching shares from the company. This remuneration should, if the share price is unchanged, be equivalent to a maximum 75 percent of the basic salary (excluding social security costs).

A more detailed description of the remuneration to senior executives can be found in the remuneration guidelines adopted at the 2016 Annual General Meeting.

BoD proposal remuneration guidelines 2016

Outstanding incentive programs

Long-term incentive program

LTI 2016

The 2016 Annual General Meeting decided to implement a long-term incentive program (LTI 2016) for senior executives and other key employees in the Group.

For each Series B share acquired by the CEO within the framework of LTI 2016, the company has assigned one matching award and four performance awards. For each Series B share acquired by other members of the Executive Team, the company has assigned one matching award and three performance awards. For each Series B share acquired by other participants, the company has assigned one matching award and one performance award.

Each matching award entitles the holder to receive one free Series B share in the company after three years, provided that the holder, with some exceptions, is still employed by the Group when the interim report for the first quarter 2019 is published and has retained the shares acquired within the framework of LTI 2016. 

Each performance award entitles the holder to receive one free Series B share in the company three years after assignment, provided that the above conditions have been fulfilled. In addition, the maximum level in a range determined by the Board of Directors for the performance of the company’s earnings per share in 2016 must further have been fulfilled. 

BoD Proposal LTI 2016

LTI 2015

 

The 2015 Annual General Meeting decided to implement a long-term incentive program (LTI 2015) for senior executives and other key employees in the Group.

For each Series B share acquired by the CEO within the framework of LTI 2015, the company has assigned one matching award and four performance awards. For each Series B share acquired by other members of the Executive Team, the company has assigned one matching award and three performance awards.

For each Series B share acquired by other participants, the company has assigned one matching award and one performance award.

After the stock split performed in June 2015, each matching award entitles the holder to receive three free Series B shares in the company after three years, provided that the holder, with some exceptions, is still employed by the Group when the interim report for the first quarter 2018 is published and has retained the shares acquired within the framework of LTI 2015.

Each performance award entitles the holder to receive three free Series B shares (after performed stock split) in the company three years after assignment, provided that the above conditions have been fulfilled. In addition, the maximum level in a range determined by the Board of Directors for the performance of the company’s earnings per share in 2015 must have been fulfilled. The performance condition has been fulfilled.

BoD Proposal LTI 2015

LTI 2014

The 2014 Annual General Meeting decided to implement a long-term incentive program (LTI 2014) for senior executives and other key staff in the Group.

For each Series B share acquired by the CEO within the framework of LTI 2014, the company has assigned one matching award and four performance awards. For each Series B share acquired by other members of the Executive Team, the company has assigned one matching award and three performance awards. For each Series B share acquired by other participants, the company has assigned one matching award and one performance award.

The matching awards and performance awards entitle the holder to receive free Series B shares in the company after three years, provided that the holder, with some exceptions, is still employed by the Group when the interim report for the first quarter 2017 is published and has retained the shares acquired within the framework of LTI 2014. The number of Series B shares in the company that each share award entitles the holder receive has been adjusted due to the stock split performed in June 2015.In order for the performance awards to entitle full allocation of Series B shares in the company, the maximum level in a range determined by the Board of Directors for the performance of the company’s earnings per share in 2014 must further have been fulfilled. The performance condition has been fulfilled.

BoD Proposal LTI 2014, see Notice under Item 16.