Share Savings Schemes
Sweco senior executives may be offered various forms of long-term incentive schemes, based on market terms. The rationale for share-based incentive schemes is to increase and/or diversify senior executives’ share ownership and/or exposure and to more closely align the interests of the company’s decision makers and shareholders. A long-term, personal shareholder commitment among key personnel is expected to stimulate greater interest in the company’s operations and earnings trend and to increase motivation and solidarity with the company.
Current Share Savings Schemes
The 2017, 2018, 2019 and 2020 Annual General Meetings resolved to implement long-term share savings schemes directed at senior executives in the Sweco Group. Under the share savings schemes, participants uses their own funds to acquire Class B shares in Sweco (“Savings Shares”) over NASDAQ Stockholm for an amount equivalent to a maximum of 5–10 per cent of the participant’s annual base salary for that year. If the Savings Shares are held until the forth business day after the announcement of the year-end report for the 2020 financial year for the 2017 share savings scheme, the 2021 financial year for the 2018 share savings scheme, the 2022 financial year for the 2019 share savings scheme and the 2023 financial year for the share savings scheme 2020 (the “Retention Period”) and the participant remains employed on the same, equivalent or higher position in the Sweco Group throughout the Retention Period, then each Savings Share shall thereafter grant entitlement to one Class B share in Sweco without consideration (“Matching Share”) if the absolute total shareholder return (“TSR”) for the Class B share in Sweco is positive during the Retention Period (the requirement for positiv TSR for Matching Share does not apply for the 2017 share savings scheme), and, provided that certain performance criteria have been met, to an additional number of not more than one to four Class B shares in Sweco (“Performance Shares”). The granting of Performance Shares is conditional on a positive TSR for the Sweco B share during the Retention Period and is also dependent on the Sweco B share’s TSR in relation to a group of benchmark companies. The cost for the Group is accounted for according to IFRS and is expensed on a straight-line basis over the Retention Period.
Further information, including intern alia the rational and the full terms, regarding the respective ongoing share saving schemes are set out in the documents below:
Due to the share split (ratio 3:1) that was implemented in the autumn of 2020, the above-mentioned share savings schemes will be recalculated in accordance with the terms of respective scheme.
Share bonus scheme
Sweco holds the view that a long-term commitment of employees by holding equity in Sweco can be expected to increase the interest in the business and its profitability, increase motivation and the affinity with Sweco as well as establish focus on the group as a whole.
Share Bonus Scheme 2020
Sweco Group currently offers a share bonus scheme (the Share Bonus Scheme 2020) under which bonuses are paid to employees in Sweden, who are covered by the scheme, in the form of Sweco shares. The Share Bonus Scheme 2020 shall cover all employees with long-term employments in Sweden in accordance with the rules for employee bonuses established by the Board of Directors but exclude senior executives and other key personnel who participate in Sweco’s other incentive schemes. A precondition for being awarded shares through the scheme is that the participant’s employment at the time of the awarding of the bonus has not expired nor been terminated. Under this equity-managed scheme, the number of shares to be received by each employee is calculated based on a fixed base share price (corresponding to the average volume-weighted price paid for the Sweco Class B share during a specified period). The base share price is restated in accordance with standard terms in the event the Sweco General Meeting resolves to conduct a share split, preferential rights issue or similar during the duration of the scheme. Estimated bonuses are expensed on a straight-line basis during the vesting period as a personnel cost, with a corresponding increase in equity. The expense recognised corresponds to the fair value of the estimated number of shares expected to vest. This expense is adjusted in subsequent periods to reflect the actual number of vested shares. Social fees relating to share-based compensation to employees as payment for services rendered are expensed during the periods in which such services are rendered. Provisions for social fees are based on the fair value of the share at the reporting date.
Further information, including intern alia the rational and the full terms, regarding the Share Bonus Scheme 2020 is set out in the documents below:
Shared Bonus Scheme 2020
Appendix 1 - Recalculation of the base share price 2020
Due to the share split (ratio 3:1) that was implemented in the autumn of 2020, the above-mentioned share bonus scheme will be recalculated in accordance with the terms of the scheme.