Supplementary payment for Börje Ekholm in line with what has previously been communicated
When Börje Ekholm assumed the CEO position of Investor AB on September 1, 2005, he was bought out from the carried interest plans that he participated in during 1998-2005 as Head of Investor Growth Capital. For then already realized investments, Börje Ekholm received USD 6.9 m. before tax, of which USD 3.0 m. was reinvested in Investor shares. For the unrealized investments, as of September 1, 2005, Investor bought out Börje Ekholm’s interests for USD 2.5 m. in an upfront cash payment plus a potential supplementary payment dependent on the future development of the value of these investments (see full Press Release from August 24, 2005 on the following page).
In accordance with the agreement, a calculation of the value has now after five years been made, and consequently a supplementary payment of USD 5.5 m. before tax has been made. The supplementary payment is a result of successful divestments during these five years of among others JDS Uniphase, Kyphon, Swedish Orphan International and Visiprise.
Through previous purchases, Börje Ekholm holds a total of 352.000 Investor shares and intends to invest a part of the proceeds from the supplementary payment in Investor shares.
Another supplementary payment dependent on not yet realized holdings may be disbursed in 2015, at the earliest.
For further information:
Oscar Stege Unger, Head of Corporate Communications,
Phone +46 8 614 2059, +46 70 624 2059
Magnus Dalhammar, Investor Relations Manager,
Phone +46 8 614 2130, +46 735 24 2130
Appendix 1
Press Release
Stockholm, August 24, 2005
Information about terms for Investor’s new CEO
Incoming CEO Börje Ekholm will exchange unrealized investments in carried interest plans within Investor Growth Capital for shares in Investor AB
As announced earlier, Börje Ekholm will become Chief Executive Officer of Investor AB on September 1, 2005. His total compensation package is in accordance with previously established compensation principles and consists of three parts: base salary, variable salary and participation in Investor’s long-term incentive programs. His base salary is SEK 5.4 million per year. The variable portion of his salary can amount to a maximum of 60 percent of his base salary. Both quantitative and qualitative goals must be fulfilled before variable salary can be paid. Within the framework of Investor’s long-term incentive programs, Börje Ekholm will be allocated restricted stock and employee stock options whose value will correspond to a maximum of 60 percent of his base salary on the allocation date. The final allocation within the long-term incentive program will also be contingent on the fulfillment of goals. The pension is a defined contribution plan on parts of salary exceeding 20 basic amounts, with an annual provision corresponding to 30 percent of his basic salary.
As the head of Investor’s New Investment business area stationed in the United States, Börje Ekholm has participated in the company’s carried interest plans for seven years. These programs are based on established practices in the venture capital market and have been reported on a continuous basis in Investor’s annual reports. In connection with Börje Ekholm becoming CEO of Investor AB, an agreement has been reached to terminate his participation in carried interest plans that only pertain to Investor Growth Capital. Börje Ekholm will also purchase Investor shares with part of the proceeds. He is retaining his existing investments in the programs from 2002-2004, which are connected to the entire New Investments business area (comprising Investor Growth Capital, EQT and Investor Capital Partners). As CEO, Börje Ekholm will not participate in new carried interest plans within the New Investments business area.
Based on the final settlement of investments realized in carried interest plans within Investor Growth Capital, Börje Ekholm will receive approximately USD 6.9 million (SEK 53 million) before tax, an effect of the positive results generated by Investor Growth Capital which have included profitable divestments of holdings in Bredbandsbolaget, Tessera, Entific and Micronic during 2005.
Regarding Börje Ekholm’s remaining interests in unrealized investments within Investor Growth Capital, an agreement has been reached in which Investor will redeem these interests. The redemption amount is USD 2.5 million (SEK 19 million) before tax, plus a supplementary payment that is dependent on the future development of the value of these investments. The supplementary payment will be made in 2010 at the earliest.
In conjunction with these transactions, Börje Ekholm will purchase shares in Investor AB for USD 3.0 million (SEK 23 million).
For further information:
Oscar Stege Unger, Head of Corporate Communications, Phone 46 8 614 2059, 46 70 624 2059
Magnus Dalhammar, Investor Relations Manager, Phone 46 8 614 2130, 46 73 524 2130
Our press releases can be accessed at www.investorab.com on the Internet. Investor AB is a Nordic-based industrial holding company founded almost one hundred years ago by the Wallenberg family. Today we have investment activities in Europe, the United States and Asia. The business concept is to generate attractive long-term returns for our shareholders by owning and developing companies with solid potential for value creation. We are an engaged owner and apply experience, knowledge and a unique network to develop listed and unlisted companies to make them best-in-class.