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v3.21.1

G3 Share-based compensation (Tables) | 12 Months Ended
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Dec. 31, 2020
Disclosure Of Terms And Conditions Of Sharebased Payment Arrangement [Abstract] |
Summary of Performance Criteria |
LTV and EPP performance criteria |  |  |  |  |  |  |  |  |  |  |  |
Program Year |  | Target |  | Criteria |  | Weight |  | Performance Period |  | Vesting Opportunity (linear pro-rata) |  | Achievement |  | Achieved Vesting Level
2020 |  | 2020 Group operating income |  | Range (SEK billion): 19.1–27.9 |  | 50% |  | Jan 1, 2020–Dec 31, 2020 |  | 0%–200% |  | SEK 29.1 billion | 2) | 200%
2020 |  | Absolute TSR |  | Range: 6%–14% |  | 30% |  | Jan 1, 2020 - Dec 31, 2022 |  | 0%–200% |  |  |  |
2020 |  | Relative TSR |  | Ranking of Ericsson: 6–2 |  | 20% |  | Jan 1, 2020 - Dec 31, 2022 |  | 0%–200% | 1) |  |  |
2020 Total |  |  |  |  |  | 100% |  |  |  | 0%–200% |  |  |  |
2019 |  | 2019 Group operating income |  | Range (SEK billion): 10.0–20.0 |  | 50% |  | Jan 1, 2019–Dec 31, 2019 |  | 0%–200% |  | SEK 20.4 billion | 3) | 200%
2019 |  | Absolute TSR |  | Range: 6%–14% |  | 30% |  | Jan 1, 2019 - Dec 31, 2021 |  | 0%–200% |  |  |  |
2019 |  | Relative TSR |  | Ranking of Ericsson: 7–2 |  | 20% |  | Jan 1, 2019 - Dec 31, 2021 |  | 0%–200% | 1) |  |  |
2019 Total |  |  |  |  |  | 100% |  |  |  | 0%–200% |  |  |  |
2018 |  | 2018 Group operating income |  | Range (SEK billion): 4.6–9.6 |  | 50% |  | Jan 1, 2018–Dec 31, 2018 |  | 0%–200% |  | SEK 11.5 billion | 4) | 200%
2018 |  | Absolute TSR |  | Range: 6%–14% |  | 30% |  | Jan 1, 2018 - Dec 31, 2020 |  | 0%–200% |  | 26.92% |  | 200%
2018 |  | Relative TSR |  | Ranking of Ericsson: 7–2 |  | 20% |  | Jan 1, 2018 - Dec 31, 2020 |  | 0%–200% | 1) | 1.94 out of 12 |  | 200%
2018 Total |  |  |  |  |  | 100% |  |  |  | 0%–200% |  |  |  | 200%
2017 |  | Absolute TSR |  | Range: 6%–14% |  | 50% |  | Jan 1, 2017 - Dec 31, 2019 |  | 0%–200% |  | 21.34% |  | 200%
2017 |  | Relative TSR |  | Ranking of Ericsson: 12–5 |  | 50% |  | Jan 1, 2017 - Dec 31, 2019 |  | 0%–200% | 1) | 5.45 out of 18 |  | 191.04%
2017 Total |  |  |  |  |  | 100% |  |  |  | 0%–200% |  |  |  | 195.52%
1) | The portion of the Performance Share Awards granted to a participant based on the relative TSR performance condition is subject to fulfilment of the related performance criteria over the performance period compared to Peer Groups consisting of 11 companies for the program year 2020, 12 companies for the program years 2019 and 2018, and 18 companies for the program year 2017. The vesting of the Performance Share Awards under this performance condition will vary depending on the Company’s TSR performance ranking versus the other companies in the peer group at the end of the performance period.
2) | Excludes restructuring charges.
3) | Excludes fines and similar related to the United States Department of Justice (DOJ) / Securities and Exchange Commission (SEC) investigation.
4) | Excludes restructuring charges and the provisions taken in Q4 2018 related to the revised BSS strategy.
Summary of Number of Shares and Synthetic Shares |
Number of shares and synthetic shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(million) |  | Executive team programs |  |  | Of which the President and CEO
Share-settled programs |  | LTV 2020 |  | LTV 2019 |  | LTV 2018 |  | LTV 2017 |  | Total |  |  | LTV 2020 |  | LTV 2019 |  | LTV 2018 |  | LTV 2017 |  | Total
Maximum shares required |  | 2.5 |  | 3.0 |  | 3.0 |  | 3.0 |  | 11.5 |  |  | — |  | — |  | — |  | — |  | —
Granted shares |  | 0.9 |  | 0.6 |  | 0.8 |  | 0.7 |  | 3.0 |  |  | 0.4 |  | 0.3 |  | 0.4 |  | 0.4 |  | 1.5
Outstanding number of shares beginning of 2020 |  | — |  | 0.9 |  | 1.2 |  | 1.3 |  | 3.4 |  |  | — |  | 0.4 |  | 0.6 |  | 0.9 |  | 1.9
Exercised during 2020 |  | — |  | — |  | — |  | (1.3) |  | (1.3) |  |  | — |  | — |  | — |  | (0.9) |  | (0.9)
Forfeited during 2020 |  | — |  | — |  | — |  | — |  | — |  |  | — |  | — |  | — |  | — |  | —
Increase due to performance condition 2020 |  | 0.4 |  | — |  | 0.4 |  | — |  | 0.8 |  |  | 0.2 |  | — |  | — |  | — |  | 0.2
Outstanding number of shares end of 2020 |  | 1.3 |  | 0.9 |  | 1.6 |  | — |  | 3.8 |  |  | 0.6 |  | 0.4 |  | 0.6 |  | — |  | 1.6
|  | Executive performance program |  |  | Key contributors plans
Cash-settled plan |  | EPP 2020 |  | EPP 2019 |  | EPP 2018 |  | EPP 2017 |  | Total |  |  | KC 2020 |  | KC 2019 |  | KC 2018 |  | KC 2017 |  | Total
Synthetic shares |  | 1.7 |  | 1.0 |  | 1.6 |  | — |  | 4.3 |  |  | 11.3 |  | 6.2 |  | 8.3 |  | — |  | 25.8
Summary of Compensation Expense |
Compensation expense LTV 2017-2020 |  |  |  |  |  |  |  |  |  |
|  | Year |  |
Share-settled programs |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Total
LTV 2020 |  | 23 |  | — |  | — |  | — |  | 23
LTV 2019 |  | 28 |  | 17 |  | — |  | — |  | 45
LTV 2018 |  | 28 |  | 28 |  | 18 |  | — |  | 74
LTV 2017 |  | 4 |  | 13 |  | 14 |  | 10 |  | 41
Total executive team programs |  | 83 |  | 58 |  | 32 |  | 10 |  | 183
Of which the President and CEO |  | 41 |  | 32 |  | 18 |  | 6 |  | 97
Cash-settled plans |  |  |  |  |  |  |  |  |  |
EPP 2020 |  | 34 |  | — |  | — |  | — |  | 34
EPP 2019 |  | 50 |  | 11 |  | — |  | — |  | 61
EPP 2018 |  | 76 |  | 53 |  | 20 |  | — |  | 149
EPP 2017 |  | 25 |  | 116 |  | 110 |  | 31 |  | 282
Total executive performance plans |  | 185 |  | 180 |  | 130 |  | 31 |  | 526
KC 2020 |  | 523 |  | — |  | — |  | — |  | 523
KC 2019 |  | 335 |  | 248 |  | — |  | — |  | 583
KC 2018 |  | 368 |  | 245 |  | 156 |  | — |  | 769
KC 2017 |  | 72 |  | 273 |  | 323 |  | 139 |  | 807
Total key contributor plans |  | 1,298 |  | 766 |  | 479 |  | 139 |  | 2,682
Total cash-settled plans |  | 1,483 |  | 946 |  | 609 |  | 170 |  | 3,208
Total compensation expense |  | 1,566 |  | 1,004 |  | 641 |  | 180 |  | 3,391
Summary of FV Per Performance Criteria and Program |
Fair values (SEK) |  |  |  |  |  |  |  |
Executive team programs |  | LTV 2020 |  | LTV 2019 |  | LTV 2018 |  | LTV 2017
Share price at grant |  | 78.88 |  | 90.70 |  | 65.79 |  | 57.15
Fair value Absolute TSR |  | 54.69 |  | 87.92 |  | 80.40 |  | 54.40
Fair value Relative TSR |  | 98.06 |  | 94.63 |  | 78.66 |  | 76.95
Fair value Group operating income |  | 74.22 |  | 86.94 |  | 62.93 |  | —
Executive performance plans |  | EPP 2020 |  | EPP 2019 |  | EPP 2018 |  | EPP 2017
Fair value Absolute TSR |  | 98.37 |  | 113.49 |  | 198.56 |  | 84.12
Fair value Relative TSR |  | 125.35 |  | 130.59 |  | 198.56 |  | 84.12
Fair value Group operating income |  | 96.54 |  | 97.71 |  | 99.29 |  |
Key contributor plans |  | KC 2020 |  | KC 2019 |  | KC 2018 |  | KC 2017
Fair value - Tranche 1 |  | 99.68 |  | 84.12 |  | — |  | —
Fair value - Tranche 2 |  | 98.10 |  | 99.29 |  | — |  | —
Fair value - Tranche 3 |  | 96.54 |  | 97.71 |  | — |  | —
Fair value |  | — |  | — |  | 99.29 |  | 84.12
Summary of Stock Purchase Plans | The table below shows the contribution period and participation details for the only open SPP from 2016, which was settled and closed with the final matching and delivery of the remaining contribution shares to the participants on August 17, 2020.
Stock Purchase Plans |  |  |  |  |  |  |
Plan |  | Contribution period |  | Number of participants at launch |  | Take-up rate – percent of eligible employees |
|  | August 2016 – |  |  |  |  |
Stock Purchase plan 2016 |  | July 2017 |  | 31,500 |  | 29% |
Summary of Executive Performance Stock Plan Targets |
Executive Performance Stock Plan targets |  |  |  |  |  |  |
|  | Base year |  |  |  |  |  |  |
|  | value |  |  |  |  |  |  |
|  | SEK billion |  | Year 1 |  | Year 2 |  | Year 3 |
2016 |  |  |  |  |  |  |  |  |
|  | Compound annual growth rate of |
Growth (net sales growth) |  | 246.9 |  |  |  |  |  | 2%–6% |
Margin |  | Compound annual growth rate of |
(operating income growth)1) |  | 24.8 |  |  |  |  |  | 5%–15% |
Cash ﬂow (cash conversion) |  | — |  | ≥70% |  | ≥70% |  | ≥70% |
1) | Excluding extraordinary restructuring charges.
Summary of Shares for All Plans |
Shares for LTV 2016 |  |  |  |  |
Stock Purchase Plan, Key Contributor Retention Plan and Executive Performance Stock Plans |  |  |  |  |
Plan (million shares) |  |  |  | 2016 |
Originally designated |  | A |  | 21.6 |
Outstanding beginning of 2020 1) |  | B |  | 10.9 |
Awarded during 2020 |  | C |  | — |
Exercised/matched during 2020 |  | D |  | 10.8 |
Forfeited/expired during 2020 |  | E |  | 0.1 |
Outstanding end of 2020 |  | F=B+C-D-E |  | — |
Compensation costs charged during 2020 (SEK million) 2) 3) |  | G |  | 65.6 |
1) | Shares under the Executive Performance Stock Plans were based on the fact that the 2016 plan came out at 22%, in casu 78% lapsed.
2) | Fair value was calculated as the share price on the investment date, reduced by the net present value of the dividend expectations during the three-year vesting period. Net present value calculations are based on data from external party.
3) | Total compensation costs charged during 2019: SEK 256 million, 2018: SEK 645 million.

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