Long Term Incentive schemes

Senior executives in the Sweco Group may be offered various forms of incentive schemes on market-based terms. Share-based incentive schemes are aimed at increasing and spreading share ownership/exposure among senior executives. A long-term personal share ownership commitment among key personnel can be expected to stimulate greater interest in the Company’s operations and profit growth and to increase motivation and alignment with the Company’s goals.

Decisions regarding share-based incentive schemes shall always be approved by an Annual General Meeting or Extraordinary General Meeting.

Share Savings Scheme 2018
The costs for the 2018 Share Savings Scheme are based on IFRS 2 and will be amortised over three years.

The Board of Directors has made a preliminary cost calculation for the 2018 Share Savings Scheme, which is based on a SEK 260 price per share at final allocation, allocation of Matching Shares and the maximum number of Performance Shares following the Retention Period, an estimated annual staff turnover of 5 per cent, investment in Savings Shares by each participant to the maximum amount permitted, and expected dividends during the period. The values of the Matching Shares and Performance Shares have been calculated based on a share price of SEK 188.60 per share at the implementation of the scheme, an estimate of the future volatility of the Company’s share and the shares of the group of benchmark companies as specified by the Board of Directors, and the correlations between the respective total yields of these shares. Based on the above assumptions, the value of each Matching Share has been calculated at SEK 151.40 and the value of each Performance Share at SEK 59.20.

In total, this results in a maximum cost of approximately SEK 10.5 million for the 2018 Share Savings Scheme, excluding costs for social security contributions. The cost for social security contributions, based on a 10 per cent annual appreciation of the Sweco share through the time of allocation, is approximately SEK 8 million. These costs should be viewed in relation to Sweco’s costs for salaries and remuneration, which amounted to SEK 10,299 million in 2017 including social security contributions. Administrative costs for the 2018 Share Savings Scheme are estimated at no more than SEK 1 million.

Share Savings Scheme 2017
The 2017 Annual General Meeting resolved, as proposed by the Board of Directors, to implement the 2017 Share Savings Scheme, comprising up to 176,400 Class B shares in Sweco (of which up to 140,000 shares for allocation to participants and up to 36,400 shares to cover costs related to social security contributions), subject to the following main conditions.

Up to 100 senior executives and other key personnel will be invited to participate in the 2017 Share Savings Scheme. The 2017 Share Savings Scheme corresponds in all essential respects to the share savings schemes approved by the Annual General Meetings of 2011-16. Participation in the 2017 Share Savings Scheme requires participants to acquire Class B shares in Sweco ("Savings Shares") with their own funds at market rates through NASDAQ Stockholm up to an amount corresponding to 5 to 10 per cent of each participant's fixed annual salary for 2017. If a participant retains ownership of the Savings Shares through the date of the announcement of results for financial year 2020 and remains employed during that period in the same, an equivalent or a higher position in the Sweco Group, each Savings Share entitles the participant to receive one Class B share in Sweco ("Matching Share") free of charge and – provided that certain performance criteria set by the Board of Directors with respect to total Sweco share yield are met – an additional one to four Class B shares in Sweco ("Performance Shares").

To enable implementation of the 2017 Share Savings Scheme, the Annual General Meeting resolved to authorise the Board of Directors to acquire up to 140,000 treasury Class B shares on the stock exchange prior to the next AGM in order to secure delivery of Matching Shares and Performance Shares to participants, and to authorise the Board of Directors to acquire and transfer up to 36,400 Class B shares on the stock exchange to cover costs related to social security contributions. The Annual General Meeting also resolved to approve the transfer, without consideration, of up to 140,000 Class B shares to participants of the 2017 Share Savings Scheme during the period in which they are entitled to receive Matching and Performance Shares.

The Share-based Incentive Scheme began during the autumn of 2017. For more information about previous Share Savings Schemes, see Incentive schemes.

Share Savings Scheme 2016
The 2016 Annual General Meeting resolved to implement an incentive scheme based on market terms. The 2016 Share Savings Scheme is aimed at a maximum of 100 participants and includes a maximum of 205,000 Sweco B shares. The Share Savings Scheme includes an option for the Company to purchase and sell redemption shares to cover costs for social security contributions, for which the Share Savings Scheme includes a maximum of 259,000 shares.

A total of 56 senior executives and other key employees participated in the 2016 Share Savings Scheme. The participants purchased approximately 26,000 Class B Sweco shares with their own funds at market rates over NASDAQ Stockholm. A maximum of 86,000 shares can be issued to participants if the predetermined goals are fulfilled (excluding the shares to cover social security contributions).

Pursuant to IFRS 2 provisions, the cost of the 2016 Share Savings Scheme is estimated at approximately SEK 20 million (including social fees) and will be expensed on a straight-line basis over the retention period.

Share Savings Scheme 2015
The 2015 Annual General Meeting resolved, as proposed by the Board of Directors, to implement the 2015 Share Savings Scheme, comprising up to 159,000 Class B shares in Sweco (of which up to 126,000 shares for allocation to participants and up to 33,000 shares to cover costs related to social security contributions), subject to the following main conditions. Up to 80 senior executives and other key personnel will be invited to participate in the 2015 Share Savings Scheme. The 2015 Share Savings Scheme corresponds to the share savings schemes approved by the Annual General Meetings of 2011-14. Participation in the 2015 Share Savings Scheme requires participants to acquire Class B shares in Sweco ("Savings Shares") with their own funds at market rates through NASDAQ Stockholm up to an amount corresponding to 5 to 10 per cent of each participant's fixed annual salary for 2015. If a participant retains ownership of the Savings Shares through the date of the announcement of results for financial year 2018 and remains employed by the Sweco Group during that period, each Savings Share entitles the participant to receive one Class B share in Sweco ("Matching Share") free of charge and – provided that certain performance criteria set by the Board of Directors with respect to total Sweco share yield are met – an additional one to four Class B shares in Sweco ("Performance Shares").

To enable implementation of the 2015 Share Savings Scheme, the Annual General Meeting resolved to authorise the Board of Directors to acquire up to 126,000 treasury Class B shares on the stock exchange prior to the next AGM in order to secure delivery of Matching Shares and Performance Shares to participants, and to authorise the Board of Directors to acquire and transfer up to 33,000 Class B shares on the stock exchange to cover costs related to social security contributions. The Annual General Meeting also resolved to approve the transfer, without consideration, of up to 126,000 Class B shares to participants of the 2015 Share Savings Scheme during the period in which they are entitled to receive Matching and Performance Shares.

The main rationale for the 2015 Share Savings Scheme is to enhance Sweco’s ability to retain and recruit key personnel. A long-term personal share ownership commitment among key personnel is expected to stimulate greater interest in the Company’s operations and profit growth and to increase motivation and alignment with the Company’s goals.

Share Savings Scheme 2014
The 2014 Annual General Meeting resolved, as proposed by the Board of Directors, to implement the 2014 Share Savings Scheme, comprising up to 155,000 Class B shares in Sweco (of which up to 123,000 shares for allocation to participants and up to 32,000 shares to cover costs related to social security contributions), subject to the following main conditions. Up to 80 senior managers and other key personnel will be invited to participate in the 2014 Share Savings Scheme. The 2014 Share Savings Scheme corresponds to the share savings schemes approved by the 2013 AGM. Participation in the 2014 Share Savings Scheme requires participants to acquire Class B shares in Sweco ("Savings Shares") with their own funds at market rates through NASDAQ OMX Stockholm up to an amount corresponding to 5 to 10 per cent of each participant's fixed annual salary for 2014. If a participant retains ownership of the Savings Shares through the date of the announcement of results for financial year 2017 and remains employed by the Sweco Group during that period, each Savings Share entitles the participant to receive one Class B share in Sweco ("Matching Share") free of charge and – provided that certain performance criteria set by the Board of Directors with respect to total Sweco share yield are met – an additional one to four Class B shares in Sweco ("Performance Shares").

To enable implementation of the 2014 Share Savings Scheme, the Annual General Meeting resolved to authorise the Board of Directors to acquire up to 123,000 treasury Class B shares on the stock exchange prior to the next AGM in order to secure delivery of Matching Shares and Performance Shares to participants, and to authorise the Board of Directors to acquire and transfer up to 32,000 Class B shares on the stock exchange to cover costs related to social security contributions. The Annual General Meeting also resolved to approve the transfer, without consideration, of up to 123,000 Class B shares to participants of the 2014 Share Savings Scheme during the period in which they are entitled to receive Matching and Performance Shares.

The main rationale for the 2014 Share Savings Scheme is to enhance Sweco’s ability to retain and recruit key personnel. A long-term personal share ownership commitment among key personnel is expected to stimulate greater interest in the Company’s operations and profit growth and to increase motivation and alignment with the Company’s goals. The proposed conditions of the 2014 Share Savings Scheme correspond to those applicable to the 2013 Share Savings Scheme.

Share Savings Scheme 2013
The 2013 Annual General Meeting resolved, as proposed by the Board of Directors, to implement the 2013 Share Savings Scheme, comprising up to 244,000 Class B shares in Sweco (of which up to 194,000 shares for allocation to participants and up to 50,000 shares to cover costs related to social security contributions), subject to the following main conditions. Up to 80 senior managers and other key personnel will be invited to participate in the 2013 Share Savings Scheme. The 2013 Share Savings Scheme corresponds to the share savings scheme approved by the 2012 AGM. Participation in the 2013 Share Savings Scheme requires participants to acquire Class B shares in Sweco ("Savings Shares") with their own funds at market rates through NASDAQ OMX Stockholm up to an amount corresponding to 5 to 10 per cent of each participant's fixed annual salary for 2013. If a participant retains ownership of the Savings Shares through the date of the announcement of results for financial year 2016 and remains employed by the Sweco Group during that period, each Savings Share entitles the participant to receive one Class B share in Sweco ("Matching Share") free of charge and – provided that certain performance criteria set by the Board of Directors with respect to total Sweco share yield are met – an additional one to four Class B shares in Sweco ("Performance Shares").

To enable implementation of the 2013 Share Savings Scheme, the Annual General Meeting resolved to authorise the Board of Directors to acquire up to 194,000 treasury Class B shares on the stock exchange prior to the next AGM in order to secure delivery of Matching Shares and Performance Shares to participants, and to authorise the Board of Directors to acquire and transfer up to 50,000 Class B shares on the stock exchange to cover costs related to social security contributions. The Annual General Meeting also resolved to approve the transfer, without consideration, of up to 194,000 Class B shares to participants of the 2013 Share Savings Scheme during the period in which they are entitled to receive Matching and Performance Shares.

The main rationale for the 2013 Share Savings Scheme is to enhance Sweco’s ability to retain and recruit key personnel. A long-term personal share ownership commitment among key personnel is expected to stimulate greater interest in the Company’s operations and profit growth and to increase motivation and alignment with the Company’s goals. The proposed conditions of the 2013 Share Savings Scheme correspond to those applicable to the 2012 Share Savings Scheme.

 

Share Savings Scheme 2012
The 2012 Annual General Meeting resolved, as proposed by the Board of Directors, to implement the 2012 Share Savings Scheme, comprising up to 250,000 Class B shares in Sweco (of which up to 198,000 shares for allocation to participants and up to 52,000 shares to cover costs related to social security contributions), subject to the following main conditions. Up to 80 senior managers and other key personnel will be invited to participate in the 2012 Share Savings Scheme. The 2012 Share Savings Scheme corresponds to the share savings scheme approved by the 2011 AGM. Participation in the 2012 Share Savings Scheme requires participants to acquire Class B shares in Sweco ("Savings Shares") with their own funds at market rates through NASDAQ OMX Stockholm up to an amount corresponding to 5 to 10 per cent of each participant's fixed annual salary for 2012. If a participant retains ownership of the Savings Shares through the date of the announcement of results for financial year 2015 and remains employed by the Sweco Group during that period, each Savings Share entitles the participant to receive one Class B share in Sweco ("Matching Share") free of charge and – provided that certain performance criteria set by the Board of Directors with respect to total Sweco share yield are met – an additional one to four Class B shares in Sweco ("Performance Shares").

To enable implementation of the 2012 Share Savings Scheme, the Annual General Meeting resolved to authorise the Board of Directors to acquire up to 198,000 treasury Class B shares on the stock exchange prior to the next AGM in order to secure delivery of Matching Shares and Performance Shares to participants, and to authorise the Board of Directors to acquire and transfer up to 52,000 Class B shares on the stock exchange to cover costs related to social security contributions. The Annual General Meeting also resolved to approve the transfer, without consideration, of up to 198,000 Class B shares to participants of the 2012 Share Savings Scheme during the period in which they are entitled to receive Matching and Performance Shares.

The main rationale for the 2012 Share Savings Scheme is to enhance Sweco’s ability to retain and recruit key personnel. A long-term personal share ownership commitment among key personnel is expected to stimulate greater interest in the Company’s operations and profit growth and to increase motivation and alignment with the Company’s goals. The proposed conditions of the 2012 Share Savings Scheme correspond to those applicable to the 2011 Share Savings Scheme.