In general, Ericsson is in compliance with the Swedish regulations relating to the organisation and procedures of the Annual General Meeting.
Under ITEM 8.2, discharge of the board of directors & CEO is sought. ECGS notes that the Company's CEO (Mr. Börje Ekholm) and CFO (Mr. Carl Mellander) became defendants in a US lawsuit alleging violations of US securities laws. As long as the results of this investigation are unclear, ECGS is unwilling to grant discharge. Accordingly, ECGS recommends to vote OPPOSE.
Under ITEM 10, the nomination committee seeks approval of the remuneration of the board of directors. Although the proposed fees are conform to market practice for an international company with the size and complexity of Ericsson, ECGS does not approve of the partial payment in synthetic shares. Hence, ECGS recommends to vote OPPOSE.
Under ITEMS 11.1-11.10, the nomination committee proposes the (re-)election of the board of directors. In light of insufficient independent representation on the board and concerns over aggregate time commitments ECGS recommends to vote OPPOSE to the (re-)election of: Mr. Jan Carlson (ITEM 11.2), Ms. Nora Denzel (ITEM 11.3), Mr. Eric A. Elzvik (ITEM 11.5), Mr. Ronnie Leten (ITEM 11.7), Ms. Helena Stjernholm (ITEM 11.9) and Mr. Jacob Wallenberg (ITEM 11.10).
Under ITEM 12, the nomination committee proposes to re-appoint Mr. Ronnie Leten as Chairman of the board of directors. ECGS has various concerns over his re-appointment and therefore recommends to vote OPPOSE.
Under ITEM 15, the nomination committee proposes to re-appoint PricewaterhouseCoopers as the Company's statutory auditor. Although the level of non-audit fees is in line with its guidelines, ECGS notes that the current auditor has been in office for 49 years, which exceeds its guidelines. Accordingly, ECGS recommends to vote OPPOSE.
Under ITEM 16, the board of directors seeks approval of the Company's executive remuneration guidelines. Since the proposed (executive) remuneration guidelines are NOT in accordance with its guidelines, ECGS recommends to vote OPPOSE.
Under ITEM 17, the board of directors seeks approval of a LT incentive plan. ECGS notes that the maximum LTI (corresponding to 360% of annual base salary) exceeds the threshold in its guidelines. Accordingly, ECGS recommends to vote OPPOSE.
ITEMS 17.2-17.3 are considered enabling resolutions of the LT incentive plan (see above). ECGS thus recommends to vote OPPOSE.
ITEM 20 is a proposal made by a shareholder. Although there is very limited information available with regard to the proposal, ECGS recommends to vote FOR. Finally, ECGS notes that Ericsson is currently involved in two US lawsuits which relate to: (i) possible corruption in its China business; and (ii) violations of US securities laws (see also above).
Ericsson provides communications technology and services. Co.'s services, software and infrastructure – especially in mobility, broadband and the cloud – enable the telecom industry and other sectors to do business, increase efficiency, improve the user experience and capture new opportunities. Co. has more than 110,000 professionals and customers in more than 180 countries. Co. provides support for networks with more than 2.5 billion subscribers. Co.'s core business areas are called Radio, Core and Transmission and Telecom Services. Co. divides its operations into three business segments: Networks, Global Services and Support Solutions.
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Item 2: Approve the Remuneration ReportThe remuneration structure is unsatisfactory. The main concern at the Company is that the potential maximum incentive pay including the bonus, matching shares on the deferred portion of the bonus and the LTI amounts to 1000% of base salary, which is considered grossly excessive. Actual incentive pay during the year was1.6 times the ECGS limit. Furthermore, variable remuneration is overly reliant on a single performance metric, benchmark profit before tax. A second performance criteria will be used in the coming year. We note that the Company has adjusted ...
Leadership changes Vittorio Colao was succeeded by Nick Read who was appointed Chief Executive Designate on 27 July 2018 and became Chief Executive on 1 October 2018. Margherita Della Valle joined the Board as Chief Financial Officer on 27 July 2018. Item 15: Advisory vote on the Remuneration ReportThe structure is unsatisfactory. The maximum bonus and total incentive pay exceed guidelines. The quantum for the year was excessive. Pay weighted more towards rewarding long-term performance, but there are overlapping performance conditions as free cash flow was used for both the STI and LTI. A b...
Item 2: Approve the Remuneration ReportThe structure is unsatisfactory as the use of qualitative criteria exceeds guidelines and the pension is excessive. Qualitative criteria slightly exceeds ECGS guidelines. There is no disclosure of targets of the metrics for the STI and a bonus was paid though the Company made a loss for the year. A recruitment award was paid during the year. We recommend shareholders oppose. Item 3: Approve the Remuneration PolicyGiven that the pension contribution will be reduced to within ECGS guidelines, the main concern at the Company is the use of qualitative criter...
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