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Equity-based compensation

Long-term equity-based remuneration is a means to attract and retain staff with key competences. It also builds long-term commitment to SEB and creates an incentive for the employees to become shareholders of SEB. The equity-based programmes provide scope for risk adjustment for both current and future risks, and thus the final outcome can subsequently be reduced in part or in full, in compliance with the rules of the Swedish Financial Supervisory Authority.

The 2022 Annual General Meeting approved three long-term equity programmes for 2022:

a) SEB All Employee Programme 2022 (AEP) for all employees in most of the countries where SEB operates,

b) SEB Share Deferral Programme 2022 (SDP) for the Group Executive Committee (GEC), certain other senior managers and key employees, and

c) SEB Restricted Share Programme 2022 (RSP) for some employees in certain business units.

The proposed programmes allow for risk adjustment for current as well as future risks. The final outcome may therefore be cancelled partly or entirely in accordance with regulations, among other things taking the Bank’s result and capital and liquidity required in the business into account.

SEB All Employee Programme 2022 (AEP)

SEB All Employee Programme 2022 (AEP) is a programme for all employees in most of the countries where SEB operates. 50 per cent of the outcome is paid in cash and 50 per cent is deferred for three years and paid in SEB A-shares in Sweden and in SEB A-shares or cash adjusted for the SEB A-share’s Total Shareholder Return (TSR) outside of Sweden. The AEP normally requires, with certain exemptions such as retirement, redundancy, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. The individual maximum allotment is capped in Sweden at SEK 75,000 and the outcome is based on the development of pre-determined long-term group targets, the financial targets (i) Return on Equity and (ii) cost development, and the non-financial targets (iii) customer satisfaction, and (iv) the fulfilment of selected targets in the current business plan. On individual level the allocation is also dependent on the employee fulfilling his/her obligations towards SEB. Outcome is subject to a proposal at the Annual General Meeting 2023 on dividend distribution to the shareholders. The Board of Directors may nevertheless decide to allocate an outcome even if no proposal for a dividend is made, provided the reason for not proposing dividend follows from e.g. temporary regulations or recommendations from authorities limiting dividends. Should the total outcome under the AEP be below approximately 30 per cent of the maximum outcome, the total outcome may be paid in cash without deferral.

SEB Share Deferral Programme 2022 (SDP)

SEB Share Deferral Programme 2022 (SDP) is a programme for GEC, certain other senior managers and key employees, maximum 1,000 participants in total. The participants are granted an individual number of conditional share rights based on the fulfilment of pre- determined Group, business unit and individual targets outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial target Return on Equity/Return on Business Equity, cost development as well as on e.g. customer satisfaction and parameters such as compliance, employee engagement, SEB’s corporate sustainability development and risk management. The targets are evaluated from a multi-year perspective including both absolute and relative performance, as applicable, and taking SEB’s three year business plan into account. For GEC the initial allotment may not exceed 100 per cent of the base pay.

For GEC and other senior managers, ownership of 50 per cent of the share rights is transferred to the participant after a qualification period of three years, 50 per cent after a qualification period of five years. For other participants, ownership of 100 per cent of the share rights is transferred after three years, unless they are deemed as so-called Identified staff, then 50 per cent of the ownership is transferred after four years. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. In order to facilitate share ownership and strengthening the shareholder alignment, in addition to the above mentioned exercise period, the exercise period for GEC members is extended during the period that they are members of GEC. Each share right carries the right to receive one Class A-share in SEB.

For participants in countries mainly outside of SEB’s European locations, the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. 50 per cent of the final outcome is paid out after four years and 50 per cent after six years for senior managers. For other participants in these countries 100 per cent of the deferred amount is paid out after four or five years, unless they are deemed so-called Identified staff, then 50 per cent of the ownership is transferred after four years and 50 per cent after five years.

The SDP normally requires, with certain exemptions such as retirement, redundancy, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. A further requirement for GEC and other senior managers is that they hold shares in SEB equal to a pre-determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than during the initial three year vesting period. If these requirements are not fulfilled, the share rights may be forfeited.

SEB Restricted Share Programme 2022 (RSP)

SEB Restricted Share Programme 2022 (RSP) is a programme for selected employees on the level below senior executives within certain business units of SEB, maximum 1,000 participants in total. The participants are granted an individual number of share rights based on the fulfilment of pre-determined group, business unit and individual targets as outlined in SEB’s business plan. The targets are set on an annual basis as a mix of financial targets and non-financial targets. The targets are evaluated from a multi-year perspective including both absolute and relative performance, as applicable, and taking SEB’s three year business plan into account.

The ownership of the share rights is transferred to the participants during a three or four year period in either three (starting 2023) or five (starting 2022) annual instalments. The share rights are subject to restrictions in terms of e.g. certain regulatory forfeiture and employment requirements during the period between the initial allotment and the transfer of the ownership.

After the transfer of the ownership there is an additional holding period of one year after which the share rights can be converted to shares and transferred to the participant. Each share right carries the right to receive one Class A-share in SEB.

For participants in countries mainly outside SEB’s European locations the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. The deferred amount is paid out after each respective holding period.

Allotment and costs under the programmes

The maximum number of shares that can be transferred under the programmes is 10 million. The calculated expected outcome is approximately 6.5 million shares. The maximum number of shares under the programmes equals approximately 0.46 per cent including and 0.25 per cent excluding the SEB All Employee Programme (expected outcome equals approximately 0.29 per cent including and 0.22 per cent excluding the SEB All Employee Programme) of the total number of shares in SEB.

The maximum annual charge for the deferred part, i.e. shares and cash adjusted for TSR, of the AEP that may affect the profit and loss account is SEK 150m, out of which SEK 31m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 65m, out of which SEK 13m is related to social charges. The expected aggregated charges during the total programme period in the profit and loss account are SEK 260m.

The maximum annual charge for the SDP that may affect the profit and loss account is SEK 165m, out of which SEK 38m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 140m, out of which SEK 32m is related to social charges. The expected aggregated charge during the total programme period in the profit and loss account is SEK 560m.

Based on the structure of the RSP, where part of the ownership is transferred immediately and part is distributed pro-rata, the annual charge will differ each year during the programme length. The maximum annual charge for the RSP that may affect the profit and loss account is SEK 125m the first year and SEK 13m the last year, out of which SEK 30m and SEK 3m respectively is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 125m and SEK 13m respectively, out of which SEK 30m and SEK 3m respectively is related to social charges. The expected aggregated charge during the total programme period in the profit and loss account is SEK 236m.

The maximum calculated annual charge is based on the assumptions that the price of the SEB Class A-share is SEK 125 and that no participant is leaving SEB during the employment requirement period. Furthermore, it should be noted that should the SEB share price increase from the assumed SEK 125 the increase in maximum calculated annual charge will be approximately SEK 2,5m for every SEK in increase. The part of the programmes that will be settled in cash will create a higher volatility in the Income statement since the change in the share price is reported when it occurs.

The expected average annual charge in the profit and loss account for the three programmes is equivalent to approximately 1.7 per cent of the total annual staff costs in the SEB Group.

Previous years’ programmes

Share Matching Programme 2012

The programme comprises approximately 400 selected senior managers and key employees and is an extended share savings programme with a higher own investment in SEB Class A-shares with the possibility to receive share rights and additional performance based share rights. The investment amount is pre-determined and capped for each participant and may be performed with cash or with previously owned shares. After the three year performance period the participants receive one share right and a maximum of three performance based share rights for each retained share. Each share right carries the right to receive one Class A-share in the Bank. A further requirement is that the participant remains with SEB during the performance period. 

The programme has a performance period of three years and an exercise period of four years. To motivate participants to keep their share rights after the first day when they can be exercised, the holders are compensated for dividends to the shareholders during the exercise period. Thus, the number of share rights will be recalculated, after the Annual General Meeting each year during the exercise period, taking the dividend into account.

To reach full outcome of performance based share rights under the programme, two performance criteria, TSR compared to SEB’s competitors (1/3 of the total maximum outcome) and TSR compared to long-term interest rate (LTIR) (2/3 of the total maximum outcome), must be met. 

The value of the Share Matching Programme is capped at full vesting under the two performance criteria and a doubled share price based on a pre-determined initial share price. 

The number of outstanding rights that entitles to matching as of December 31, 2021 was 26,275.

SEB Share Deferral Programme 2013

The Group Executive Committee and certain other senior managers and other key employees with critical competences, approximately 300 executives in total, are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group and individual target levels outlined in SEB’s business plan. The targets are set on an annual basis and are both financial (return on equity/return on business equity and cost development) and non-financial (customer satisfaction). 

50 per cent of the share rights are delivered to the participant after a vesting period of three years, 50 per cent after a vesting period of five years. There is a requirement for vesting that the participant remains with SEB during the first three years. A further requirement for vesting is that the participant holds shares in SEB equal to a pre-determined amount, acquired no later than on a pro-rata basis during the initial three year vesting period. 

After each respective vesting period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. Each share right carries the right to receive one Class A-share in the Bank.

The holders are compensated for dividends to the shareholders during the duration of the programme. Thus, the number of share rights will be recalculated, after the Annual General Meeting each year, taking the dividend into account.

The number of outstanding share rights as of December 31, 2021 was 47,037.

SEB Share Matching Programme 2013

Approximately 200 selected key business employees with critical competences are offered to participate in a share purchase programme with own investment in SEB Class A-shares with the possibility to receive share rights and additional performance based share rights. The investment amount is based on previous year’s performance, pre-determined and capped for each participant. After the three year performance period the participants receive one share right and a maximum of three performance based share rights for each retained share. Each share right carries the right to receive one Class A-share in the Bank. A further requirement is that the participant remains with SEB during the performance period. 

The programme has a performance period of three years and an exercise period of four years. To motivate participants to keep their share rights after the first day when they can be exercised, the holders are compensated for dividends to the shareholders during the exercise period. Thus, the number of share rights will be recalculated, after the Annual General Meeting each year during the exercise period, taking the dividend into account.

To reach full outcome of performance based share rights under the programme, two performance criteria, total shareholder return (TSR) compared to SEB’s competitors (1/3 of the total maximum outcome) and TSR compared to long-term interest rate (LTIR) (2/3 of the total maximum outcome), must be met: 

The value of the SMP is capped at full vesting under the two performance criteria and a doubled share price based on the pre-determined initial share price.

The number of outstanding rights that entitles to matching as of December 31, 2021 was 40,563.

SEB Share Deferral programme 2014

The GEC and certain other senior managers and other key employees with critical competences, approximately 600 participants in total, are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group, business unit and individual target levels outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial targets Return on Equity/Return on Business Equity and cost development and the non-financial target customer satisfaction. For GEC the initial allotment may not exceed 100 per cent of the base pay.

Ownership of 50 per cent of the share rights are transferred to the participant after a vesting period of three years, 50 per cent after a vesting period of five years. After each respective vesting period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. Each share right carries the right to receive one Class A-share in the Bank. There is a requirement for vesting that the participant remains with SEB during the first three years. A further requirement for vesting is that the participant holds shares in SEB equal to a pre-determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than on a pro-rata basis during the initial three year vesting period. 

The holders are compensated for dividends to the shareholders during the duration of the programme. Thus, the number of share rights will be recalculated, after the Annual General Meeting each year, taking the dividend into account.

The number of outstanding share rights as of December 31, 2021 was 169,201. 

SEB Share Matching Programme 2014

Approximately 200 selected key business employees with critical competences will participate in a share purchase programme with own investment and with the possibility to receive share rights and additional performance based share rights. The investment amount, which is based on previous year’s individual performance, pre-determined and capped for each participant, is taken from the cash based variable compensation outcome and mandatory deferred for three years. A determined number of deferral rights are allocated to each participant, one deferral right corresponds to the average market price for one SEB Class A-share during a pre-determined period. After the three year performance period the participants receive one share right in exchange for each deferral right and one matching share right and a maximum of three performance based share rights for each deferral right. Each share right carries the right to receive one Class A-share in the Bank. A further requirement is that the participant remains with SEB during the performance period. 

The programme has a performance period of three years and an exercise period of four years.

To motivate participants to keep their share rights after the first day when they can be exercised, the holders are compensated for dividends to the shareholders during the exercise period. Thus, the number of share rights will be recalculated, after the Annual General Meeting each year during the exercise period, taking the dividend into account.

The outcome of the programme, i.e. the number of performance based share rights received, depends on the extent of fulfilment of two pre-determined performance criteria. 

Performance criteria

To reach full outcome of performance based share rights under the programme, two performance criteria, total shareholder return (the nominal total return to shareholders, comprising share price appreciation and dividends, TSR) compared to SEB’s competitors (1/3 of the total maximum outcome) and TSR compared to long-term interest rate (LTIR) (2/3 of the total maximum outcome), must be met: 

The criterion TSR compared to SEB’s competitors gives a minimum outcome if the TSR increase for SEB per year equals TSR for a weighted Banking Index. Competitors are weighted 75 per cent Nordic banks and 25 per cent FTSEurofirst300 Banks Index. The outcome is then set at 20 per cent of the maximum outcome under this criterion. Above that level, the number of performance based share rights increases with a linear distribution within the interval until a ceiling of 7 per cent increase per year above the Banking Index is achieved. At that level the maximum outcome under this criterion is reached (1/3 of total maximum outcome). Performance is measured based on the average share price 1 January – 31 March 2014 compared to the average share price 1 January – 31 March 2017.

The criterion TSR compared to LTIR gives a minimum outcome if the TSR for SEB reaches LTIR + 2 per cent per year. The outcome is then set at 20 per cent of the maximum outcome under this criterion. Above that level, the number of performance based share rights increases with a linear distribution within the interval until a ceiling at a TSR increase of LTIR + 11 per cent per year is achieved. At that level the maximum outcome under this criterion is reached (2/3 of total maximum outcome). Performance is measured based on the average share price 1 January – 31 March 2014 compared to the average share price 1 January – 31 March 2017.

Cap for the SEB Share Matching Programme

The value of the SMP is capped at full vesting under the two performance criteria and a doubled share price based on the pre-determined initial share price.

If the share price at the time of vesting has more than doubled, the number of share rights and performance based share rights that are transferred to a participant will be reduced proportionately so that the value corresponds to the doubled share price capped value. 

The number of outstanding rights that entitles to matching as of December 31, 2021 was 20,790.

SEB Share Deferral Programme 2015 

The GEC and certain other senior managers with critical competences and a broadened number of other key employees, approximately 2,000 participants in total, are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group, business unit and individual target levels outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial target Return on Equity/Return on Business Equity, cost development as well as on customer satisfaction and parameters such as compliance and risk. For GEC the initial allotment may not exceed 100 per cent of the base pay.

For senior managers ownership of 50 per cent of the share rights are transferred to the participant after a qualification period of three years, 50 per cent after a qualification period of five years. For other participants ownership of the share rights are transferred after three years. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. Each share right carries the right to receive one Class A-share in the Bank. 

For participants outside of Sweden the outcome is deferred and paid in cash adjusted for TSR. 50 per cent of the deferred amount is paid out after four years and 50 per cent after six years for senior managers. For other participants outside of Sweden the deferred amount is paid out after four years. 

There is a requirement for vesting that the participant remains with SEB during the first three years. A further requirement is that the participant holds shares in SEB equal to a pre-determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than during the initial three year vesting period.

The holders are compensated for dividends to the shareholders during the duration of the programme. Thus, the number of share rights/the deferred amount will be recalculated, after the Annual General Meeting each year, taking the dividend into account.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 451,545 and that entitles to cash adjusted for TSR was 0.

SEB Share Deferral Programme 2016 

The GEC and certain other senior managers and a number of other key employees, approximately 2000 participants in total, are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group, business unit and individual targets outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial target Return on Equity/Return on Business Equity, cost development as well as on e.g. customer satisfaction and parameters such as compliance, employee commitment, SEB’s corporate sustainability and risk. For GEC the initial allotment may not exceed 100 per cent of the base pay.

For GEC and other senior managers ownership of 50 per cent of the share rights are transferred to the participant after a qualification period of three years, 50 per cent after a qualification period of five years. For other participants ownership of the share rights are transferred after three years. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. Each share right carries the right to receive one Class A-share in the Bank. For participants outside of Sweden the outcome is deferred as above referred and paid in cash adjusted for the SEB A-share’s total shareholder return.

There is a requirement for vesting that the participant remains with SEB during the first three years. A further requirement is that the participant holds shares in SEB equal to a pre-determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than during the initial three year vesting period.

Allotment and cost

The maximum number of shares that can be transferred under the programmes is 14.1 million. The calculated expected outcome is approximately 9.5 million shares. The maximum number of shares under the programmes equals approximately 0.64 per cent including and 0.38 per cent excluding the SEB All Employee Programme (expected outcome equals approximately 0.44 per cent including and 0.32 per cent excluding the SEB All Employee Programme) of the total number of shares in the Bank.

The maximum annual charge for the deferred part, i.e. shares and cash adjusted for TSR, of the AEP that may affect the profit and loss account is SEK 155m, out of which SEK 34m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 66m, out of which SEK 14m is related to social charges. The expected aggregated charges during the total programme period in the profit and loss account are SEK 264m.

The maximum annual charge for the SDP that may affect the profit and loss account is SEK 230m, out of which SEK 53m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 195m, out of which SEK 45m is related to social charges. The expected aggregated charge during the total programme period in the profit and loss account is SEK 785m.

The maximum calculated annual charge is based on the assumptions that the price of the SEB Class A-share is SEK 85 and that no participant is leaving SEB during the employment requirement period.

Furthermore, it should be noted that should the SEB share price increase from the assumed SEK 85 the increase in maximum calculated annual charge will be approximately SEK 3m for every SEK in increase. The part of the programmes that will be settled in cash will create a higher volatility in the Income statement since the change in the share price is reported when it occurs.

The expected annual charge in the profit and loss account for the two programmes is equivalent to approximately 1.8 per cent of the total annual staff costs in the SEB Group.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 1,102,262 and that entitles to cash adjusted for TSR was 204,992.

SEB Share Deferral Programme 2017

The GEC and certain other senior managers and a number of other key employees, approximately 2,000 participants in total, are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group, business unit and individual targets outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial target Return on Equity/Return on Business Equity, cost development as well as on e.g. customer satisfaction and parameters such as compliance, employee commitment, SEB’s corporate sustainability and risk. For GEC the initial allotment may not exceed 100 per cent of the base pay.

For GEC and other senior managers ownership of 50 per cent of the share rights are transferred to the participant after a qualification period of three years, 50 per cent after a qualification period of five years. For other participants ownership of the share rights are transferred after three years. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. In order to facilitate share ownership and strengthen the shareholder alignment, in additional to the above mentioned exercise period, for GEC the exercise period is extended during the period that they are members of GEC. Each share right carries the right to receive one Class A-share in the Bank. For participants outside of Sweden the outcome may be deferred as above referred and paid in cash adjusted for the SEB A-share’s TSR. 

There is normally a requirement for vesting that the participant remains with SEB during the first three years. A further requirement for GEC and other senior managers is that they hold shares in SEB equal to a pre-determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than during the initial three year vesting period.

The maximum number of shares that can be transferred under the programmes is 13.5 million. The calculated expected outcome is approximately 8.5 million shares. The maximum number of shares under the programmes equals approximately 0.62 per cent including and 0.34 per cent excluding the SEB All Employee Programme (expected outcome equals approximately 0.39 per cent including and 0.29 per cent excluding the SEB All Employee Programme) of the total number of shares in the Bank.

The maximum annual charge for the deferred part, i.e. shares and cash adjusted for TSR, of the AEP that may affect the profit and loss account is SEK 155m, out of which SEK 33m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 66m, out of which SEK 14m is related to social charges. The expected aggregated charges during the total programme period in the profit and loss account are SEK 264m.

The maximum annual charge for the SDP that may affect the profit and loss account is SEK 230m, out of which SEK 53m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 195m, out of which SEK 45m is related to social charges. The expected aggregated charge during the total programme period in the profit and loss account is SEK 780m.

The maximum calculated annual charge is based on the assumptions that the price of the SEB Class A-share is SEK 95 and that no participant is leaving SEB during the employment requirement period. Furthermore, it should be noted that should the SEB share price increase from the assumed SEK 95 the increase in maximum calculated annual charge will be approximately SEK 3m for every SEK in increase. The part of the programmes that will be settled in cash will create a higher volatility in the Income statement since the change in the share price is reported when it occurs.

The expected annual charge in the profit and loss account for the two programmes is equivalent to approximately 1.8 per cent of the total annual staff costs in the SEB Group.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 1,629,690 and that entitles to cash adjusted for TSR was 29,589.

SEB All Employee Programme 2018 (AEP)

SEB All Employee Programme 2018 (AEP) is a programme for all employees in most of the countries where SEB operates. 50 per cent of the outcome is paid in cash and 50 per cent is deferred for three years and paid in SEB A-shares in Sweden and in SEB A-shares or cash adjusted for the SEB A-share’s Total Shareholder Return (TSR) outside of Sweden. The AEP requires, with certain exemptions such as retirement, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. The individual maximum allotment is capped in Sweden at SEK 75,000 and the outcome is based on the fulfilment of pre-determined Group targets, the financial targets (i) return on equity and (ii) cost development and the non-financial target (iii) customer satisfaction. Outcome is subject to a proposal at the Annual General Meeting 2019 on dividend distribution to the shareholders for 2018. Should the total outcome under the AEP be below approximately 20 per cent of the maximum outcome, the total outcome may be paid in cash without deferral.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 1,745,006 and that entitles to cash adjusted for TSR was 991,375.

SEB Share Deferral Programme 2018 (SDP)

SEB Share Deferral Programme 2018 (SDP) is a programme for GEC and certain other senior managers and key employees, approximately 1,000 participants in total. The participants are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group, business unit and individual targets outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial target Return on Equity/Return on Business Equity, cost development as well as on e.g. customer satisfaction and parameters such as compliance, employee commitment, SEB’s corporate sustainability and risk management. For GEC the initial allotment may not exceed 100 per cent of the base pay.

For GEC and other senior managers, ownership of 50 per cent of the share rights is transferred to the participant after a qualification period of three years, 50 per cent after a qualification period of five years. For other participants, ownership of 100 per cent of the share rights is transferred after three years. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. In order to facilitate share ownership and strengthen the shareholder alignment, in addition to the above mentioned exercise period, the exercise period for GEC members is extended during the period that they are members of GEC. Each share right carries the right to receive one Class A-share in the Bank.

For participants in countries, mainly outside of SEB’s European locations, the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. 50 per cent of the final outcome is paid out after four years and 50 per cent after six years for senior managers. For other participants in these countries the deferred amount is paid out after four years.

The SDP requires, with certain exemptions such as retirement, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. A further requirement for GEC and other senior managers is that they hold shares in SEB equal to a pre-determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than during the initial three year vesting period. If these requirements are not fulfilled, the share rights may be forfeited.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 3,549,121 and that entitles to cash adjusted for TSR was 100,310.

SEB Restricted Share Programme 2018 (RSP)

In order to ensure a competitive and attractive remuneration model within certain business units of SEB, as well as to comply with new regulations implemented in EU and Sweden, a Restricted Share Programme is proposed. The participants, in total approximately 1,000 selected employees on the level below senior executives, are granted an individual number of share rights based on the fulfilment of pre-determined Group, business unit and individual targets as outlined in SEB’s business plan. The targets are set on an annual basis as a mix of financial targets and non-financial targets.

The ownership of the share rights are transferred to the participants during a three year period in either four (starting 2018) or three (starting 2019) annual instalments. The share right are subject to restrictions in terms of e.g. certain regulatory forfeiture and employment requirements during the period between the initial allotment and the transfer of the ownership.

After the transfer of the ownership there is an additional holding period of one year after which the share rights can be converted to shares and transferred to the participant. Each share right carries the right to receive one Class A-share in the Bank.

For participants in countries mainly outside SEB’s European locations the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. The deferred amount is paid out after each respective holding period.

The maximum number of shares that can be transferred under the programmes is 12.7 million. The calculated expected outcome is approximately 8.5 million shares. The maximum number of shares under the programmes equals approximately 0.58 per cent including and 0.32 per cent excluding the SEB All Employee Programme (expected outcome equals approximately 0.38 per cent including and 0.29 per cent excluding the SEB All Employee Programme) of the total number of shares in the Bank.

The maximum annual charge for the deferred part, i.e. shares and cash adjusted for TSR, of the AEP that may affect the profit and loss account is SEK 150m, out of which SEK 32m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 64m, out of which SEK 14m is related to social charges. The expected aggregated charges during the total programme period in the profit and loss account are SEK 256m.

The maximum annual charge for the SDP that may affect the profit and loss account is SEK 77m, out of which SEK 18m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 65m, out of which SEK 15m is related to social charges. The expected aggregated charge during the total programme period in the profit and loss account is SEK 265m.

Based on the structure of the RSP, where part of the ownership is transferred immediately and part is distributed pro-rata, the annual charge will differ each year during the programme length. The maximum annual charge for the RSP that may affect the profit and loss account is SEK 330m the first year and SEK 24m the last year, out of which SEK 76m and SEK 6m respectively is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 325m and SEK 24m respectively, out of which SEK 75m and SEK 5m respectively is related to social charges. The expected aggregated charge during the total programme period in the profit and loss account is SEK 500m.

The maximum calculated annual charge is based on the assumptions that the price of the SEB Class A-share is SEK 100 and that no participant is leaving SEB during the employment requirement period. Furthermore, it should be noted that should the SEB share price increase from the assumed SEK 100 the increase in maximum calculated annual charge will be approximately SEK 3m for every SEK in increase.

The part of the programmes that will be settled in cash will create a higher volatility in the Income statement since the change in the share price is reported when it occurs.

The expected average annual charge in the profit and loss account for the three programmes is equivalent to approximately 1.7 per cent of the total annual staff costs in the SEB Group.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 326,550 and that entitles to cash adjusted for TSR was 15,680.

SEB All Employee Programme 2019 (AEP)

SEB All Employee Programme 2019 (AEP) is a programme for all employees in most of the countries where SEB operates. 50 per cent of the outcome is paid in cash and 50 per cent is deferred for three years and paid in SEB A-shares in Sweden and in SEB A-shares or cash adjusted for the SEB A-share’s Total Shareholder Return (TSR) outside of Sweden. The AEP requires, with certain exemptions such as retirement, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. The individual maximum allotment is capped in Sweden at SEK 75,000 and the outcome is based on the fulfilment of pre-determined Group targets, the financial targets (i) Return on Equity and (ii) cost development and the non-financial target (iii) customer satisfaction. Outcome is subject to a proposal at the AGM 2020 on dividend distribution to the shareholders for 2019. Should the total outcome under the AEP be below approximately 20 per cent of the maximum outcome, the total outcome may be paid in cash without deferral.

The programme is proposed to comprise an obligation for the Bank to deliver a maximum of approximately 6.1 million shares. The expected outcome for the programme is approximately 2.2 million shares.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 1,648,425 and that entitles to cash adjusted for TSR was 1,041,404.

SEB Share Deferral Programme 2019 (SDP) 

SEB Share Deferral Programme 2019 (SDP) is a programme for GEC and certain other senior managers and key employees, approximately 1,000 participants in total. The participants are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group, business unit and individual targets outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial target Return on Equity/Return on Business Equity, cost development as well as on e.g. customer satisfaction and parameters such as compliance, employee commitment, SEB’s corporate sustainability and risk management. For GEC the initial allotment may not exceed 100 per cent of the base pay.

For GEC and other senior managers, ownership of 50 per cent of the share rights is transferred to the participant after a qualification period of three years, 50 per cent after a qualification period of five years. For other participants, ownership of 100 per cent of the share rights is transferred after three years. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. In order to facilitate share ownership and strengthening the shareholder alignment, in addition to the above mentioned exercise period, the exercise period for GEC members is extended during the period that they are members of GEC. Each share right carries the right to receive one Class A-share in the Bank.
For participants in countries mainly outside of SEB’s European locations, the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. 50 per cent of the final outcome is paid out after four years and 50 per cent after six years for senior managers. For other participants in these countries the deferred amount is paid out after four years.

The SDP requires, with certain exemptions such as retirement, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. A further requirement for GEC and other senior managers is that they hold shares in SEB equal to a pre-determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than during the initial three year vesting period. If these requirements are not fulfilled, the share rights may be forfeited.

The holders are compensated for dividends to the shareholders after the qualification period. Thus, the number of share rights/the deferred amount will be recalculated, after the AGM each applicable year, after the qualification period, taking the dividend into account.

The programme is proposed to comprise an obligation for the Bank to deliver a maximum of approximately 3.6 million shares.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 3,702,061 and that entitles to cash adjusted for TSR was 98,577.

SEB Restricted Share Programme 2019 (RSP)

SEB Restricted Share Programme 2019 (RSP) is a programme for selected employees on the level below senior executives within certain business units of SEB, approximately 1,000 participants in total. The participants are granted an individual number of share rights based on the fulfilment of pre-determined Group, business unit and individual targets as outlined in SEB’s business plan. The targets are set on an annual basis as a mix of financial targets and non-financial targets.

The ownership of the share rights are transferred to the participants during a three year period in either four (starting 2019) or three (starting 2020) annual instalments. The share right are subject to restrictions in terms of e.g. certain regulatory forfeiture and employment requirements during the period between the initial allotment and the transfer of the ownership.

After the transfer of the ownership there is an additional holding period of one year after which the share rights can be converted to shares and transferred to the participant. Each share right carries the right to receive one Class A-share in the Bank.

For participants in countries mainly outside SEB’s European locations the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. The deferred amount is paid out after each respective holding period.

The programme is proposed to comprise an obligation for the Bank to deliver a maximum of approximately 3.8 million shares.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 692,729 and that entitles to cash adjusted for TSR was 31,898.

SEB All Employee Programme 2020 (AEP)

SEB All Employee Programme 2020 (AEP) is a programme for all employees in most of the countries where SEB operates. 50 per cent of the outcome is paid in cash and 50 per cent is deferred for three years and paid in SEB A-shares in Sweden and in SEB A-shares or cash adjusted for the SEB A-share’s Total Shareholder Return (TSR) outside of Sweden. The AEP requires, with certain exemptions such as retirement, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. The individual maximum allotment is capped in Sweden at SEK 75,000 and the outcome is based on the fulfilment of pre- determined Group targets, the financial targets (i) Return on Equity and (ii) cost development and the non-financial target (iii) customer satisfaction. Outcome is subject to a proposal at the AGM 2021 on dividend distribution to the shareholders for 2020. Should the total outcome under the AEP be below approximately 20 per cent of the maximum outcome, the total outcome may be paid in cash without deferral.

The programme is proposed to comprise an obligation for the Bank to deliver a maximum of approximately 7.4 million shares. The expected outcome for the programme is approximately 2.6 million shares.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 1,477,867 and that entitles to cash adjusted for TSR was 790,336.

SEB Share Deferral Programme 2020 (SDP) 

SEB Share Deferral Programme 2020 (SDP) is a programme for GEC and certain other senior managers and key employees, approximately 1,000 participants in total. The participants are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group, business unit and individual targets outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial target Return on Equity/Return on Business Equity, cost development as well as on e.g. customer satisfaction and parameters such as compliance, employee commitment, SEB’s corporate sustainability and risk management. For GEC the initial allotment may not exceed 100 per cent of the base pay.

For GEC and other senior managers, ownership of 50 per cent of the share rights is transferred to the participant after a qualification period of three years, 50 per cent after a qualification period of five years. For other participants, ownership of 100 per cent of the share rights is transferred after three years. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. In order to facilitate share ownership and strengthening the shareholder alignment, in addition to the above mentioned exercise period, the exercise period for GEC members is extended during the period that they are members of GEC. Each share right carries the right to receive one Class A-share in the Bank.

For participants in countries mainly outside of SEB’s European locations, the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. 50 per cent of the final outcome is paid out after four years and 50 per cent after six years for senior managers. For other participants in these countries the deferred amount is paid out after four years.

The SDP requires, with certain exemptions such as retirement, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. A further requirement for GEC and other senior managers is that they hold shares in SEB equal to a pre- determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than during the initial three year vesting period. If these requirements are not fulfilled, the share rights may be forfeited.

The holders are compensated for dividends to the shareholders after the qualification period. Thus, the number of share rights/the deferred amount will be recalculated, after the AGM each applicable year, after the qualification period, taking the dividend into account.

The programme is proposed to comprise an obligation for the Bank to deliver a maximum of approximately 5.4 million shares.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 3,894,174 and that entitles to cash adjusted for TSR was 121,271.

SEB Restricted Share Programme 2020 (RSP)

SEB Restricted Share Programme 2020 (RSP) is a programme for selected employees on the level below senior executives within certain business units of SEB, approximately 1,000 participants in total. The participants are granted an individual number of share rights based on the fulfilment of pre-determined Group, business unit and individual targets as outlined in SEB’s business plan. The targets are set on an annual basis as a mix of financial targets and non-financial targets.

The ownership of the share rights is transferred to the participants during a three year period in either four (starting 2020) or three (starting 2021) annual instalments. The share right are subject to restrictions in terms of e.g. certain regulatory forfeiture and employment requirements during the period between the initial allotment and the transfer of the ownership.

After the transfer of the ownership there is an additional holding period of one year after which the share rights can be converted to shares and transferred to the participant. Each share right carries the right to receive one Class A-share in the Bank.

For participants in countries mainly outside SEB’s European locations the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. The deferred amount is paid out after each respective holding period.

The programme is proposed to comprise an obligation for the Bank to deliver a maximum of approximately 3.6 million shares.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 931,825 and that entitles to cash adjusted for TSR was 47,782.

SEB All Employee Programme 2021 (AEP)

SEB All Employee Programme 2021 (AEP) is a programme for all employees in most of the countries where SEB operates. 50 per cent of the outcome is paid in cash and 50 per cent is deferred for three years and paid in SEB A-shares in Sweden and in SEB A-shares or cash adjusted for the SEB A-share’s Total Shareholder Return (TSR) outside of Sweden. The AEP requires, with certain exemptions such as retirement, redundancy, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. The individual maximum allotment is capped in Sweden at SEK 75,000 and the outcome is based on the fulfilment of pre-determined Group targets, the financial targets (i) Return on Equity and (ii) cost development and the non-financial target (iii) customer satisfaction.

Outcome is subject to a proposal at the Annual General Meeting 2022 on dividend distribution to the shareholders for 2021. The Board of Directors may nevertheless decide to allocate an outcome even if no proposal for a dividend is made, provided the reason for not proposing dividend follows from e.g. temporary regulations or recommendations from authorities limiting dividends. Should the total outcome under the AEP be below approximately 20 per cent of the maximum outcome, the total outcome may be paid in cash without deferral.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 1,547,775 and that entitles to cash adjusted for TSR was 896,965.

SEB Share Deferral Programme 2021 (SDP)

SEB Share Deferral Programme 2021 (SDP) is a programme for GEC and certain other senior managers and key employees, approximately 1,000 participants in total. The participants are granted an individual number of conditional share rights based on the fulfilment of pre-determined Group, business unit and individual targets outlined in SEB’s business plan. The targets are set on an annual basis as a mix of the financial target Return on Equity/Return on Business Equity, cost development as well as on e.g. customer satisfaction and parameters such as compliance, employee commitment, SEB’s corporate sustainability and risk management. The targets are evaluated from a multi-year perspective including both absolute and relative performance, as applicable, and taking SEB’s three year business plan into account. For GEC the initial allotment may not exceed 100 per cent of the base pay.

For GEC and other senior managers, ownership of 50 per cent of the share rights is transferred to the participant after a qualification period of three years, 50 per cent after a qualification period of five years. For other participants, ownership of 100 per cent of the share rights is transferred after three years. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. In order to facilitate share ownership and strengthening the shareholder alignment, in addition to the above mentioned exercise period, the exercise period for GEC members is extended during the period that they are members of GEC. Each share right carries the right to receive one Class A-share in the Bank.

For participants in countries mainly outside of SEB’s European locations, the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. 50 per cent of the final outcome is paid out after four years and 50 per cent after six years for senior managers. For other participants in these countries the deferred amount is paid out after four years.

The SDP requires, with certain exemptions such as retirement, redundancy, disability and orderly transition, the employee to be employed during three years from allotment to be eligible for payment. A further requirement for GEC and other senior managers is that they hold shares in SEB equal to a pre-determined amount, for GEC equivalent to one year salary net of taxes, acquired no later than during the initial three year vesting period. If these requirements are not fulfilled, the share rights may be forfeited.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 2,974,455 and that entitles to cash adjusted for TSR was 88,091.

SEB Restricted Share Programme 2021 (RSP)

SEB Restricted Share Programme 2021 (RSP) is a programme for selected employees on the level below senior executives within certain business units of SEB, approximately 1,000 participants in total. The participants are granted an individual number of share rights based on the fulfilment of pre-determined Group, business unit and individual targets as outlined in SEB’s business plan. The targets are set on an annual basis as a mix of financial targets and non-financial targets. The targets are evaluated from a multi-year perspective including both absolute and relative performance, as applicable, and taking SEB’s three year business plan into account.

The ownership of the share rights are transferred to the participants during a three year period in either four (starting 2021) or three (starting 2022) annual instalments. The share right is subject to restrictions in terms of e.g. certain regulatory forfeiture and employment requirements during the period between the initial allotment and the transfer of the ownership.

After the transfer of the ownership there is an additional holding period of one year after which the share rights can be converted to shares and transferred to the participant. Each share right carries the right to receive one Class A-share in the Bank.

For participants in countries mainly outside SEB’s European locations the outcome may be deferred and paid in cash adjusted for the SEB A-shares’ Total Shareholder Return, excluding the dividend distribution. The deferred amount is paid out after each respective holding period.

The maximum number of shares that can be transferred under the programmes is 13.9 million. The calculated expected outcome is approximately 8.9 million shares. The maximum number of shares under the programmes equals approximately 0.64 per cent including and 0.34 per cent excluding the SEB All Employee Programme (expected outcome equals approximately 0.41 per cent including and 0.30 per cent excluding the SEB All Employee Programme) of the total number of shares in the Bank.

The maximum annual charge for the deferred part, i.e. shares and cash adjusted for TSR, of the AEP that may affect the profit and loss account is SEK 150m, out of which SEK 31m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 64m, out of which SEK 13m is related to social charges. The expected aggregated charges during the total programme period in the profit and loss account are SEK 260m.

The maximum annual charge for the SDP that may affect the profit and loss account is SEK 155m, out of which SEK 35m is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 130m, out of which SEK 30m is related to social charges. The expected aggregated charge during the total programme period in the profit and loss account is SEK 530m.

Based on the structure of the RSP, where part of the ownership is transferred immediately and part is distributed pro-rata, the annual charge will differ each year during the programme length. The maximum annual charge for the RSP that may affect the profit and loss account is SEK 145m the first year and SEK 15m the last year, out of which SEK 35m and SEK 4m respectively is related to social charges. The annual charge to the profit and loss account for the expected calculated outcome under the programme is estimated to SEK 142m and SEK 13m respectively, out of which SEK 33m and SEK 3m respectively is related to social charges. The expected aggregated charge during the total programme period in the profit and loss account is SEK 253m.

The maximum calculated annual charge is based on the assumptions that the price of the SEB Class A-share is SEK 90 and that no participant is leaving SEB during the employment requirement period. Furthermore, it should be noted that should the SEB share price increase from the assumed SEK 90 the increase in maximum calculated annual charge will be approximately SEK 3m for every SEK in increase. The part of the programmes that will be settled in cash will create a higher volatility in the Income statement since the change in the share price is reported when it occurs. 

The expected average annual charge in the profit and loss account for the three programmes is equivalent to approximately 1.8 per cent of the total annual staff costs in the SEB Group.

The number of outstanding rights that entitles to shares as of December 31, 2021 was 878,843 and that entitles to cash adjusted for TSR was 46,911.