Report
Expert Corporate Governance Service (ECGS)
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Epiroc - AGM 09 May 2019

In general, Epiroc is in compliance with the Swedish regulations relating to the organisation and procedures of the Annual General Meeting.

Under ITEM 10b, the nomination committee proposes to re-appoint Mr. Ronnie Leten as the Chairman of the board of directors. In view of concerns over his aggregate time commitments, ECGS recommends to vote OPPOSE.

Under ITEM 11a, the nomination committee seeks approval of the remuneration of the board of directors. Although the proposed fees are conform to Swedish market practice, ECGS does not approve of the partial payment in synthetic shares. Hence, ECGS recommends to vote OPPOSE.

Under ITEM 12a, the board of directors seeks approval of the Company's executive remuneration guidelines. Although no (material) changes are proposed, ECGS is missing an actual LT component (with a performance measurement period of at least 3 years) under the guidelines. ECGS therefore recommends to vote OPPOSE.

Under ITEM 12b, the board of directors seeks approval of a LT incentive plan. In light of an  insufficiently long performance period (of only 1 year), ECGS recommends to vote OPPOSE.

In ECGS' view, ITEMS 13a-13d are enabling resolutions of the Company's LT incentive plan and/or facilitating the compensation of the board of directors in the form of synthetic shares (see above). Since ECGS does not approve of the proposed LT incentive plan nor agrees with the proposed compensation of the board, it does not agree with resolutions to secure obligations under said plans either. Accordingly, ECGS recommends to vote OPPOSE.

Finally, under ITEM 14, approval is sought to establish an 'external' nomination committee. Like several  institutional investors, ECGS has concerns over the bundled form under which the election of directors is put to shareholders' vote in Sweden. ECGS therefore has decided to take such concerns (if applicable) into account and express these at the resolution on the nomination committee, as in Sweden said committee is responsible for nominating candidates to the board of directors (either in bundled or unbundled form). Since the election of the board of directors is proposed as a slate (bundled) at this year's AGM, ECGS recommends opposing the establishment of the nomination committe.

Underlying
Epiroc A

Epiroc AB is a Sweden-based provider of solutions for rock drilling and excavation, demolition and recycling, which offers a range of equipment, service offerings and related spare parts, as well as consumables. The Company's operations are divided into two segments: Equipment & Service that comprises equipment for mining and rock excavation, exploration and infrastructure, and Tools & Attachments, which offers tools that are attached to larger machines that are used for drilling, demolition, recycling, rock excavation, and service for tools within the segment. Applications for products include blasthole drilling for tunneling, road, railway and dam construction, construction work, ground engineering, as well as for infrastructure applications. Epiroc AB sales products and services in approximately 150 countries.

Provider
Proxinvest
Proxinvest

Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.

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Expert Corporate Governance Service (ECGS)

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