Ericsson bonus scheme voted down
A bonus scheme for employees at Swedish telecoms giant Ericsson has been voted down at the company's annual general meeting. Investment funds holding more than ten percent of shares in the company failed to support its plan for employee rewards.
Ericsson chairman Michael Treschow said the decision "puts the company in a very difficult position."
The vetoed programme would, among other things, have allowed Ericsson staff to take part of their salary in shares. In return, they would have been given the same number of shares again after three years, on the condition that they were still employed by the company.
Alf-Peter Svensson, who voted on behalf of the foreign investment funds that vetoed the proposal, said he could not say what the funds' objections to the scheme were.
"My job is to vote according to the funds' instructions, not to divulge the reasons. We're talking about a large number of funds here and it is impossible for me to know the reasons for the various funds. But I expect that Ericsson's management will now contact the funds," he said at the AGM.
Ericsson CEO Carl-Henric Svanberg was otherwise assured as he appeared at the AGM. He said the company was continuing to grow.
"We are in a position of strength and we expect to continue gaining market share," he said.
Regarding the disappointing share price, he said that the company's situation was "hard to analyse" for the share market.
"But we are going strong regardless, and many of our competitors are preoccupied with problems.
Svanberg also revealed that an agreement with Vodafone announced on Tuesday was worth several billion kronor. Newspapers have reported that the deal was worth in the order of 4 billion kronor ($580 million).
"I don't know where that figure came from, but yes, it is something in that order," he told news agency TT.
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Ericsson chairman Michael Treschow said the decision "puts the company in a very difficult position."
The vetoed programme would, among other things, have allowed Ericsson staff to take part of their salary in shares. In return, they would have been given the same number of shares again after three years, on the condition that they were still employed by the company.
Alf-Peter Svensson, who voted on behalf of the foreign investment funds that vetoed the proposal, said he could not say what the funds' objections to the scheme were.
"My job is to vote according to the funds' instructions, not to divulge the reasons. We're talking about a large number of funds here and it is impossible for me to know the reasons for the various funds. But I expect that Ericsson's management will now contact the funds," he said at the AGM.
Ericsson CEO Carl-Henric Svanberg was otherwise assured as he appeared at the AGM. He said the company was continuing to grow.
"We are in a position of strength and we expect to continue gaining market share," he said.
Regarding the disappointing share price, he said that the company's situation was "hard to analyse" for the share market.
"But we are going strong regardless, and many of our competitors are preoccupied with problems.
Svanberg also revealed that an agreement with Vodafone announced on Tuesday was worth several billion kronor. Newspapers have reported that the deal was worth in the order of 4 billion kronor ($580 million).
"I don't know where that figure came from, but yes, it is something in that order," he told news agency TT.
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