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 Corporate Governance Code, Section 10.3. The President and CEO and other members of the Executive Team are considered senior executives (the “Executive Team”). 

System of variable remuneration to senior executives

The variable cash remuneration shall be linked to predetermined and measurable targets, which are further described below, and may amount to not more than 75 percent of the yearly base salary.

The variable cash remuneration shall be linked to predetermined and measurable financial targets, such as earnings per share (EPS), earnings before interest and taxes (EBIT), cash flow and organic growth and can also be linked to strategical and/or functional targets individually adjusted on the basis of responsibility and function. These targets shall be designed so as to contribute to ASSA ABLOY’s business strategy and long-term interests, including its sustainability, by for example being linked to the business strategy or promote the senior executive’s long-term development within ASSA ABLOY. 

The Remuneration Committee shall for the Board of Directors prepare, monitor and evaluate matters regarding variable cash remuneration to the Executive Team. Ahead of each yearly measurement period for the criteria for awarding variable cash remuneration the Board of Directors shall, based on the work of the Remuneration Committee, establish which criteria that are deemed to be relevant for the upcoming measurement period. To which extent the criteria for awarding variable cash remuneration has been satisfied shall be determined when the measurement period has ended. Evaluations regarding fulfilment of financial targets shall be based on determined financial basis for the relevant period.

Variable cash remuneration can be paid after the measurement period has ended or be subject to deferred payment. Paid variable cash remuneration can be claimed back when such right follows from general principles of law.

In addition, the Executive Team should, within the framework of the long-term incentive programs, be able to receive variable remuneration in the form of shares. See below description of outstanding long-term incentive programs.

A more detailed description of the remuneration to the Executive Team can be found in the remuneration guidelines adopted at the 2020 Annual General Meeting.

BoD proposal remuneration guidelines 2020

 

Outstanding incentive programs

Long-term incentive program

LTI 2020

The 2020 Annual General Meeting decided to implement a long-term incentive program (LTI 2020) for senior executives and other key employees within the ASSA ABLOY Group.

For each Series B share the CEO of the Group has purchased under LTI 2020, the company has granted six performance awards. For each Series B share that other senior executives have purchased under LTI 2020, each such individual has been awarded five performance awards. For each Series B share that other participants have purchased under LTI 2020, each such individual has been awarded four performance awards.

Each performance award entitles the holder to receive one Series B share free of charge three years after allotment of the award (vesting period), provided that the holder, with some exceptions, at the time of the release of the interim report for the first quarter 2023 still is employed by the ASSA ABLOY Group and has maintained the personal investment purchased under LTI 2020.

The number of performance awards that gives right to receive Series B shares in the company depends on the annual development of ASSA ABLOY’s earnings per share based on the target levels, as defined by the Board of Directors, during the measurement period 1 January 2020 – 31 December 2022, where each year during the measurement period is compared to the previous year. The outcome is calculated yearly, whereby one third of the performance awards is measured against the outcome for 2020, one third is measured against the outcome for 2021 and one third is measured against the outcome for 2022. The outcome for each year is measured linearly. Unless the minimum level is achieved for the year, none of the relevant performance awards will give right to Series B shares, and if the maximum level is achieved each performance award linked to the relevant year will give right to one Series B share.

BoD Proposal LTI 2020

LTI 2019

The 2019 Annual General Meeting decided to implement a long-term incentive program (LTI 2019) for senior executives and other key employees within the ASSA ABLOY Group.

For each Series B share the CEO of the Group has purchased under LTI 2019, the company has granted six performance awards. For each Series B share that other senior executives have purchased under LTI 2019, each such individual has been awarded five performance awards. For each Series B share that other participants have purchased under LTI 2019, each such individual has been awarded four performance awards.

Each performance award entitles the holder to receive one Series B share free of charge three years after allotment of the award (vesting period), provided that the holder, with some exceptions, at the time of the release of the interim report for the first quarter 2022 still is employed by the ASSA ABLOY Group and has maintained the personal investment purchased under LTI 2019.

The number of performance awards that gives right to receive Series B shares in the company depends on the annual development of ASSA ABLOY’s earnings per share based on the target levels, as defined by the Board of Directors, during the measurement period 1 January 2019 – 31 December 2021, where each year during the measurement period is compared to the previous year. The outcome is calculated yearly, whereby one third of the performance awards is measured against the outcome for 2019, one third is measured against the outcome for 2020 and one third is measured against the outcome for 2021. The outcome for each year is measured linearly. Unless the minimum level is achieved for the year, none of the relevant performance awards will give right to Series B shares, and if the maximum level is achieved each performance award linked to the relevant year will give right to one Series B share.

BoD Proposal LTI 2019

LTI 2018

The 2018 Annual General Meeting decided to implement a long-term incentive program (LTI 2018) for senior executives and other key employees within the ASSA ABLOY Group.

For each Series B share the CEO of the Group has purchased under LTI 2018, the company has granted six performance awards. For each Series B share that other senior executives have purchased under LTI 2018, each such individual has been awarded five performance awards. For each Series B share that other participants have purchased under LTI 2018, each such individual has been awarded four performance awards.

Each performance award entitles the holder to receive one Series B share free of charge three years after allotment of the award (vesting period), provided that the holder, with some exceptions, at the time of the release of the interim report for the first quarter 2021 still is employed by the ASSA ABLOY Group and has maintained the personal investment purchased under LTI 2018.

The number of performance awards that gives right to receive Series B shares in the company depends on the annual development of ASSA ABLOY’s earnings per share based on the target levels, as defined by the Board of Directors, during the measurement period 1 January 2018 – 31 December 2020, where each year during the measurement period is compared to the previous year. The outcome is calculated yearly, whereby one third of the performance awards is measured against the outcome for 2018, one third is measured against the outcome for 2019 and one third is measured against the outcome for 2020. The outcome for each year is measured linearly. Unless the minimum level is achieved for the year, none of the relevant performance awards will give right to Series B shares, and if the maximum level is achieved each performance award linked to the relevant year will give right to one Series B share.

BoD Proposal LTI 2018.