Ericsson's Annual General Meeting 2024
- Approval of proposed dividend of SEK 2.70 per share by AGM
- Re-election of Board members including Jan Carlson as Chair
- Implementation of Long-Term Variable Compensation Program 2024 (LTV 2024)
- Transfer of treasury stock for previously resolved LTV programs
- None.
Insights
The decision by Ericsson's AGM to adopt the Income Statement and the Balance Sheet for both the parent company and the group consolidates the financial results of the previous year, providing a clear picture of the company's fiscal health. The approval of a dividend of SEK 2.70 per share, distributed in two installments, is a direct indicator of the company's ability to generate profit and return value to shareholders. This move is likely to be well-received by investors as it signifies stability and confidence in the company's financial management.
Moreover, the re-election of Deloitte AB as auditor suggests continuity in the company's auditing process, which may contribute to investor confidence. It is also noteworthy that the AGM approved a long-term variable compensation program (LTV 2024) for executives and employees, which aligns their interests with those of the shareholders by tying compensation to performance. This could incentivize management to focus on long-term value creation.
The AGM's actions surrounding board composition and remuneration reflect Ericsson's commitment to corporate governance. The election of a new board member and the re-election of existing members, including the Chair, ensure continuity and potentially bring fresh perspectives to the boardroom. The remuneration report's adoption and the structured fee schedule for board and committee work demonstrate transparency in director compensation, which is important for shareholder trust.
The decision to allow part of the board fees to be paid in the form of synthetic shares is particularly interesting as it further aligns board members' interests with shareholder value, potentially enhancing long-term strategic decision-making. However, it is essential to monitor the proportion of compensation in synthetic shares to ensure it does not lead to excessive risk-taking.
Ericsson's strategic move to hedge its financial exposure under LTV 2024 through an equity swap agreement with a third party is a sophisticated financial instrument that may mitigate risk associated with the compensation program. It showcases the company's proactive approach to financial planning. The authorization to transfer treasury stock to employees and on an exchange as part of the LTV program indicates a commitment to retaining top talent through equity-based incentives, which can be an attractive proposition for both current and prospective employees in a competitive tech labor market.
From a market perspective, the impact of these decisions on Ericsson's stock will depend on investor perceptions of the company's governance practices and its ability to effectively manage its long-term incentive programs. If executed well, these programs can serve as a catalyst for performance improvement, potentially leading to positive market reactions.
Adoption of the Income Statements and the Balance Sheets
The AGM resolved to adopt the Income Statement and the Balance Sheet for the Parent company as well as the Consolidated Income Statement and the Consolidated Balance Sheet for the Group for 2023.
Dividend
The proposed dividend of
Remuneration report
The AGM resolved to adopt the Board of Directors' remuneration report for 2023.
Discharge from liability
The members of the Board and the President were discharged from liability for the financial year 2023.
Board of Directors
The AGM elected Board members in accordance with the proposal of the Nomination Committee. Jan Carlson was re-elected as Chair of the Board and Jon Fredrik Baksaas, Carolina Dybeck Happe, Börje Ekholm, Eric A. Elzvik, Kristin S. Rinne, Jonas Synnergren, Jacob Wallenberg and Christy Wyatt were re-elected as Board members. Karl Åberg was elected new Board member. Helena Stjernholm, who did not stand for re-election, left the Board of Directors in connection with the AGM. It was also noted that the unions have appointed Ulf Rosberg, Annika Salomonsson and Kjell-Åke Soting as employee representatives on the Board of Directors with Frans Frejdestedt, Loredana Roslund and Stefan Wänstedt as deputies.
Board of Directors' Fees
The AGM resolved on fees to the Board of Directors, in accordance with the Nomination Committee's proposal. A yearly fee of
The AGM approved the Nomination Committee's proposal that part of the fees to the members of the Board, in respect of their Board assignment (excluding fees for Committee work), may be paid in the form of synthetic shares.
Auditor
The AGM re-elected Deloitte AB as auditor for the period up until the end of the AGM 2025 and approved the Nomination Committee´s proposal for the auditor fees.
Long-Term Variable Compensation Programs
Long-Term Variable Compensation Program 2024 (LTV 2024)
In accordance with the Board of Directors' proposal, the AGM resolved on implementation of LTV 2024 for the Executive Team, including the President and CEO, and for employees classified as Executives (currently approximately 215 employees) comprising a maximum of 10.4 million B-shares in Ericsson. "Performance Share Awards" will be granted free of charge entitling the participant to receive a number of shares at no consideration, following the expiration of a three-year vesting period, provided that certain performance conditions are met and that the participant retains his or her employment. The 10.4 million B-shares covered by LTV 2024 correspond to approximately 0.31 percent of the total number of registered shares of the company.
Furthermore, the AGM resolved that the company's financial exposure under LTV 2024 be hedged through an equity swap agreement with a third party.
Transfer of treasury stock to employees and on an exchange, directed share issue and acquisition offer for the previously resolved LTV program I 2023 (LTV I 2023)
The AGM resolved to approve the Board of Directors' proposal on:
- directed issue of 4.1 million C-shares to Investor AB, or subsidiaries of Investor AB, at a subscription price corresponding to the quota value of the share (approximately SEK 5);
- authorization for the Board of Directors to, prior to the AGM 2025, resolve on an acquisition offer regarding the 4.1 million C-shares at a price per share corresponding to the quota value of the share (approximately
SEK 5 ); following the acquisition, the C-shares will, in accordance with the articles of association, be converted into B-shares, which thereafter can be transferred to employees and on an exchange; - transfer of no more than 3.4 million B-shares, free of consideration, to employees covered by the terms of LTV I 2023, with an 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 B-shares on Nasdaq Stockholm, at a price within the, at each time, prevailing price interval for the share, 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; and - transfer of no more than 700,000 B-shares on Nasdaq Stockholm, prior to the AGM 2025, at a price within the, at each time, prevailing price interval for the share, to cover certain expenses, mainly social security payments.
Transfer of treasury stock on an exchange for previously resolved LTV programs 2021, 2022 and II 2023
The AGM resolved to approve the Board of Directors' proposals on:
- transfer of no more than 2 million B-shares on Nasdaq Stockholm, prior to the AGM 2025, at a price within the, at each time, prevailing price interval for the share, to cover certain expenses, mainly social security charges, which may occur in relation to the previously resolved and ongoing LTV programs LTV 2021, LTV 2022 and LTV II 2023; and
- authorization for the Board of Directors to decide to, in conjunction with the delivery of vested shares under LTV 2021, LTV 2022 and LTV II 2023, prior to the AGM 2025, retain and sell no more than
60% of the vested B-shares on Nasdaq Stockholm, at a price within the, at each time, prevailing price interval for the share, 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.
Shares and votes
There are in total 3,344,151,735 shares in the company; 261,755,983 A-shares and 3,082,395,752 B-shares, corresponding to in total 569,995,558.2 votes. The company's holding of treasury stock as of April 3, 2024, amounts to 12,184,543 B-shares, corresponding to 1,218,454.3 votes.
NOTES TO EDITORS:
FOLLOW US:
Subscribe to Ericsson press releases here
Subscribe to Ericsson blog posts here
https://twitter.com/ericsson
https://www.facebook.com/ericsson
https://www.linkedin.com/company/ericsson
FOR FURTHER INFORMATION, PLEASE CONTACT:
Contact persons
Lena Häggblom, Investor Relations
Phone: +46 725 93 27 78
E-mail: lena.haggblom@ericsson.com
Media
Ralf Bagner, Head of Media Relations
Telefon: +46 761 28 47 89
E-post: 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 and Global Communications Platform. 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
This information was brought to you by Cision http://news.cision.com
https://news.cision.com/ericsson/r/ericsson-s-annual-general-meeting-2024,c3956051
The following files are available for download:
Ericsson’s Annual General Meeting 2024 |
View original content:https://www.prnewswire.com/news-releases/ericssons-annual-general-meeting-2024-302107401.html
SOURCE Ericsson
FAQ
What dividend per share was approved by Ericsson's AGM 2024?
Who was re-elected as the Chair of the Board at Ericsson's AGM 2024?
What was implemented for executives at Ericsson's AGM 2024?
What was resolved regarding transfer of treasury stock at Ericsson's AGM 2024?
