(Información remitida por la empresa firmante)
A condition for payment of Cash Remuneration related to Sustainability Condition is that the company reduces greenhouse gas emissions during the Measurement Period by at least 7.5 per cent compared to the base year 2016 (the “Sustainability Target”). If the Sustainability Target is reached, full payment of Cash Remuneration relating to the Sustainability Condition will be made. If the Sustainability Target is not reached, no payment relating to this target will be made. iii. The TSR Condition will be weighted 80 per cent and the Sustainability Condition 20 per cent, when payment of the Cash Remuneration is decided.
d. Cash Remuneration will normally be paid only after the expiration of the Measurement Period and shall in general not qualify for the basis for pension computation.
e. Participants shall normally be invited to the Program during the first year of the Program. A prerequisite for a Participant to be able to receive full Cash Remuneration, is that the Participant has been permanently employed withing the Essity group throughout the Measurement Period. If a Participant has commenced its employment within the Essity group during the Measurement Period, the payment of Cash Remuneration shall be made pro rata.
f. Each Participant shall undertake, for as long as the Participant is employed within the Essity group, to acquire Essity shares for (i) the total paid net amount of the Cash Remuneration regarding senior management, and (ii) at least half the total paid net amount regarding other Participants, no later than 30 June 2026 (or as soon as possible thereafter if the Participant has been prevented from acquiring Essity shares at such time due to applicable insider rules), and to retain such shares for a period of at least three years after the acquisition, with certain exemptions approved by the Board of Directors. If a Participant does not acquire or retain Essity shares in accordance with the above, the Participant’s right to payment under future incentive programs to which the Participant has been invited to participate, shall lapse.
g. If extraordinary changes in the Essity group or in the market occur which, in the opinion of the Board of Directors, would result in a situation where the conditions for Cash Remuneration under the Program become unreasonable, the Board of Directors shall be entitled to make adjustments to the Program, including, among other things, be entitled to resolve on a reduced right to Cash Remuneration, or that no Cash Remuneration shall be paid at all.
h. The Board of Directors shall be authorized to establish the detailed terms and conditions for the Program. The Board of Directors may, in that regard, make necessary adjustments of these general terms and conditions due to changed circumstances or to satisfy certain regulations or market conditions outside Sweden.
i. Participation in the Program presupposes that such participation is legally possible in the various jurisdictions concerned.
Measurement Period and vesting period
The Measurement Period for the performance conditions under the proposed Program will cover the financial years 2023–2025. The intention of the Board of Directors is that also future programs shall have a measurement period of three years. In order to receive full Cash Remuneration, employment within the Essity group throughout the vesting period is required. Further, the vesting period, which is three years, shall be combined with a requirement that the Participant must undertake to acquire and hold Essity shares for at least a three-year period after the acquisition, in accordance with above. Required long-term nature of the Program is achieved by the above stated requirements which totals six years.
Costs for the Program, dilution, etc.
The cost for the Program, including social security charges, including approximately 380 employees, amounts to a maximum of SEK 260 million assuming 100 per cent satisfaction of all of the performance conditions for all Participants in the Program. The cost of the Program amounts to a maximum of 1.7 per cent of Essity’s total cost for salaries and remuneration, including social security charges.
The Program is cash-based and does not entail any dilution for the company’s shareholders. No hedging arrangements are intended to be made with regard to the Program’s financial exposure.
Preparations of the proposal
The proposed Program has been prepared by Essity’s Remuneration Committee. The Remuneration Committee has presented documentation to the Board of Directors, whereafter the Board of Directors has resolved that the Program shall be referred to the Annual General Meeting 2023 for approval.
Majority requirements
The Annual General Meeting’s resolution on approval of the Program requires a simple majority of the votes cast.
Previous incentive programs in Essity
The company’s other incentive programs are described more in detail in Essity’s report on remuneration for 2022, which is included in the company’s Annual and Sustainability Report 2022 and available on the company’s website, www.essity.com.
Proposal for resolution under Item 16
The Board of Directors makes the assessment that it would be advantageous for the company to be able to adapt the capital structure and to be able to acquire own shares to be used as payment or financing on account of company acquisitions and thereby contribute to increased shareholder value. Hence, the Board of Directors proposes that the Annual General Meeting authorise the Board of Directors to resolve on acquisition and transfer of own class B shares mainly as follows.
a. Acquisition of own shares
Acquisition of class B shares shall be made on Nasdaq Stockholm at a price within the at each time prevailing price interval for the share on the marketplace, meaning the interval between the highest purchase price and the lowest selling price. Payment for the shares shall be made in cash. The authorisation may be utilised on one or several occasions until the Annual General Meeting 2024. A maximum of so many class B shares may be acquired that Essity’s holding at each time amount to a maximum of 10 per cent of the total number of outstanding shares in Essity.
The Board of Directors has issued a statement pursuant to Chapter 19, Section 22 of the Swedish Companies Act.
b. Transfer of own shares on account of company acquisitions
Transfer of class B shares may be made on Nasdaq Stockholm, as well as outside of Nasdaq Stockholm, with or without deviation from the shareholders’ preferential rights and with or without provisions regarding contribution in kind or set-off rights. The shares may be used as payment upon acquisition of companies or businesses or as to finance acquisition of companies or businesses. Transfer may be made of the maximum number of shares held by Essity at the time of the Board of Directors’ resolution. The authorisation may be utilized on one or several occasions until the Annual General Meeting 2024. Transfer upon acquisition of companies or businesses may be made at a minimum price per share corresponding to an amount in close connection with the price of the company’s class B shares on Nasdaq Stockholm at the time of the decision of transfer. Transfers made on Nasdaq Stockholm to finance acquisition of companies or businesses may be made at a price within the each time prevailing price interval of the share.
The purpose of the authorisation to acquire shares in the company is to be able to adapt the company’s capital structure and to be able to use repurchased shares in connection with the potential company acquisitions and thereby contribute to increased shareholder value. The purpose of the authorisation to transfer own shares is to give the Board of Directors increased flexibility when financing company acquisitions. The reason for deviation from the shareholders’ preferential rights is to create alternative forms of payment upon acquisition of companies or businesses.
Majority requirements
The Meeting’s resolution under Item 16 requires that shareholders representing at least two-thirds of the votes cast as well as of the shares represented at the Meeting approve the resolution.
The Nomination Committee
(CONTINUA)