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 2018 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 consists of remuneration paid partly in cash, and partly in the form of shares.

The Executive Team 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 equivalent to a maximum of 75 per cent of the base salary (excluding social security costs).

In addition, the Executive Team should, within the framework of the long-term incentive program (LTI 2018), be able to receive variable remuneration in the form of shares, based on the annual development of ASSA ABLOY’s earnings per share in relation to 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 maximum outcome 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 remuneration shall, if the share price is unchanged, be equivalent to a maximum of 90 per cent of the base 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 2018 Annual General Meeting.

BoD proposal remuneration guidelines 2018.

Outstanding incentive programs

Long-term incentive program

LTI 2018

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

LTI 2017

The 2017 Annual General Meeting decided to implement a long-term incentive program (LTI 2017) for senior executives and other key employees in the Group.

For each Series B share acquired by the CEO within the framework of LTI 2017, 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 2020 is published and has retained the shares acquired within the framework of LTI 2017. 

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 2017 must further have been fulfilled. The performance-based condition has been 100 percent fulfilled.

BoD Proposal LTI 2017 

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. The performance-based condition has been 67 percent fulfilled. 

BoD Proposal LTI 2016