AGM Information • Feb 26, 2021
AGM Information
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ZURICH, SWITZERLAND, FEBRUARY 26, 2021
ABB today published the invitation to its Annual General Meeting (AGM), which will be held on Thursday, March 25, 2021. The invitation can be found below and on ABB's investor relations website at www.abb.com/agm.
Due to the extraordinary circumstances and in accordance with applicable Swiss COVID-19 legislation, shareholders will not be able to attend the event in person but may exercise their shareholder rights via the independent proxy.
Two video presentations with the Chairman and the CEO will be published on www.abb.com/agm on the day of the AGM. There will be no webcast of the AGM.
The voting results will be published on www.abb.com/agm shortly after the AGM.
ABB (ABBN: SIX Swiss Ex) is a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB's success is driven by about 105,000 talented employees in over 100 countries.
Media Relations Phone: +41 43 317 71 11 Email: [email protected]
Investor Relations Phone: +41 43 317 71 11 Email: [email protected] ABB Ltd Affolternstrasse 44 8050 Zurich Switzerland
TH U R SDAY, M A R CH 2 5 , 2 0 2 1 , AT 10 : 0 0 A . M ., AFFOLTERNSTR ASSE 44, 8050 ZURICH, SWITZERLAND
Invitation to the Annual General Meeting of ABB Ltd, Zurich
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On behalf of the Board of Directors, I am pleased to invite you to vote on our proposals to ABB's Annual General Meeting 2021. For reasons of health and safety, which are always our top priority at ABB, it will not be possible for you to attend this year's meeting in person. However, we very much hope that you will participate by voting through our independent proxy.
2020 was a year of rapid and sweeping change for the world and for ABB. Thanks to our company's financial resilience, global footprint, well-designed processes and, most importantly, our dedicated people and advanced technologies, we have been managing through the COVID-19 crisis and also helping our customers and many others through it. We also completed our organizational transformation, started in 2019, and delivered a strong financial performance in challenging circumstances. For more details on our performance, you will be able to view speeches by our CEO Björn Rosengren and me on the ABB website on the day of the AGM.
A significant achievement in 2020 was the successful carve-out of our Power Grids business, which was handed over to Hitachi on July 1. The separation of
Power Grids has enabled us to focus on those businesses where ABB has a substantial edge: electrification, robotics, automation and motion. We intend to return cash proceeds of \$ 7.6 to 7.8 billion from the divestment of Power Grids to our shareholders, and we launched a share buyback program in July 2020 to help do so.
We are very optimistic about the prospects for our business. ABB is well positioned to take advantage of megatrends such as digital connectivity, automation, sustainability and urbanization. And with our new company Purpose, business model and sustainability strategy, we have the means to realize our ambitious goals and targets.
Thank you for your continued trust and support, and we hope to see you in person at next year's AGM.
Yours sincerely,
Peter Voser Chairman of the Board of Directors
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The Board of Directors proposes that the management report, the consolidated financial statements and the annual financial statements for 2020 be approved.
The management report, the consolidated financial statements and the annual financial statements for 2020 are available for inspection by the shareholders at the seat of the Company. They are also available electronically under www.abb.com/agm.
The Board of Directors proposes that the 2020 Compensation Report, which can be found in the Annual Report, be accepted (non-binding consultative vote).
The Compensation Report contains the principles governing the compensation paid to the Board of Directors and the Executive Committee and reports on the amounts paid to the members of both bodies for 2020. The 2020 Compensation Report is available for inspection by the shareholders at the seat of the Company. It is also available electronically under www.abb.com/agm.
The Board of Directors proposes that the members of the Board of Directors and the persons entrusted with management be granted discharge for financial year 2020.
| Earnings available to the Annual General Meeting |
CHF 11,001,334,639 | |
|---|---|---|
| from previous year | CHF | 6,545,827,594 |
| Carried forward | ||
| Net income for 2020 | CHF | 4,455,507,045 |
The Board of Directors proposes that out of the earnings available to the Annual General Meeting, a dividend of CHF 0.80 gross per registered share be distributed.
Calculated on the total number of issued shares of 2,168,148,264 , this corresponds to a maximum total amount of CHF 1,734,518,611.20.
The first trading day ex-dividend is expected to be March 29, 2021. The payout date in Switzerland is expected to be March 31, 2021. The Swiss withholding tax of 35% will be deducted from the gross dividend amount.
The remaining amount of the available earnings is to be carried forward to the new account.
In deciding on the appropriation of dividends, the Annual General Meeting shall take into account that ABB Ltd will not pay dividends on shares that participate in the dividend access facility as per article 8 of the Articles of Incorporation and on own shares held by the Company and its subsidiaries.
Shareholders who are resident in Sweden and participate in the established dividend access facility will receive an amount in Swedish Kronor from ABB Norden Holding AB that corresponds to the dividend resolved on a registered share of ABB Ltd without deduction of the Swiss withholding tax. This amount, however, is subject to taxation according to Swedish law.
The Board of Directors proposes:
The share capital of the Company is CHF 246,377,791.68 and is divided into 2,053,148,264 fully paid registered shares. Each share has a par value of CHF 0.12.
Under the share buyback program announced in July 2020, ABB Ltd repurchased as per February 15, 2021, a total of 117,012,859 shares for cancellation. This is to ask the shareholders to approve the cancellation of 115,000,000 shares. It is expected that the cancellation of the remaining shares repurchased under this share buyback program will be proposed to the Annual General Meeting 2022.
The Board of Directors proposes to renew ABB Ltd's authorized share capital in an amount not to exceed CHF 24,000,000 enabling the issuance of up to 200,000,000 shares with a nominal value of CHF 0.12 each by no later than March 25, 2023, by amending article 4ter para. 1 of the Articles of Incorporation as follows (the proposed amendments are underlined):
1 The Board of Directors shall be authorized to increase the share capital in an amount not to exceed CHF 24,000,000 through the issuance of up to 200,000,000 fully paid registered shares with a par value of CHF 0.12 per share by not later than March 25, 2023. Increases in partial amounts shall be permitted.
[Article 4ter para. 2–4 remain unchanged.]
The proposal is intended to renew the existing authorized share capital, which will expire on May 2, 2021, if not renewed. The proposed renewal will maintain a certain financial flexibility of the Company. The authorized share capital is not for use in connection with employee share plans.
7.1. Binding vote on the maximum aggregate amount of compensation of the Board of Directors for the next term of office, i.e. from the 2021 Annual General Meeting to the 2022 Annual General Meeting
The Board of Directors proposes that shareholders approve the maximum aggregate amount of compensation of the Board of Directors covering the period from the 2021 Annual General Meeting to the 2022 Annual General Meeting in the amount of CHF 4,400,000.
Pursuant to article 34 of the Articles of Incorporation, the General Meeting of Shareholders shall approve the maximum aggregate amount of compensation of the Board of Directors for the next term of office. Further information on the proposed compensation is provided in the annex to this invitation.
7.2. Binding vote on the maximum aggregate amount of compensation of the Executive Committee for the following financial year, i.e. 2022
The Board of Directors proposes that shareholders approve the maximum aggregate amount of compensation of the Executive Committee for the financial year 2022 in the amount of CHF 40,000,000.
Pursuant to article 34 of the Articles of Incorporation, the General Meeting of Shareholders shall approve the maximum aggregate amount of compensation of the Executive Committee for the following financial year. Further information on the proposed compensation is provided in the annex to this invitation.
The term of office for all members of the Board of Directors expires at the completion of the Annual General Meeting on March 25, 2021.
The Board of Directors proposes that the persons presented below be elected to the Board of Directors for a term of office extending until completion of the Annual General Meeting 2022.
Gunnar Brock has been a member of ABB's Board of Directors since March 2018. He is currently chairman of the boards of Neptunia Invest AB, Mölnlycke Health Care AB and Stena AB (all Sweden). He is a member of the boards of directors of Investor AB and Patricia Industries (both Sweden). He was formerly president and chief executive officer of Atlas Copco AB (Sweden). Mr. Brock was born in 1950 and is a Swedish citizen.
David Constable has been a member of ABB's Board of Directors since April 2015. Effective January 2021, he was appointed chief executive officer of Fluor Corporation (U.S.), for which he continues to serve as a member of the board of directors. He was a member of the boards of directors of Rio Tinto plc (U.K.) and Rio Tinto Limited (Australia) until the end of 2020. He was formerly president and chief executive officer as well as a member of the board of directors of Sasol Limited (South Africa). He joined Sasol after more than 29 years with Fluor Corporation (U.S.). Mr. Constable was born in 1961 and is a Canadian and U.S. citizen.
Lars Förberg has been a member of ABB's Board of Directors since April 2017. He is co-founder and managing partner of Cevian Capital. Mr. Förberg was born in 1965 and is a Swedish and Swiss citizen.
Jennifer Xin-Zhe Li has been a member of ABB's Board of Directors since March 2018. She is a member of the board of directors of Flex Ltd (Singapore/U.S.) as well as, through May 2021, of the boards of directors of Philip Morris International Inc. (U.S.) and The Hongkong and Shanghai Banking Corporation Limited (Hong Kong). Ms. Li is a founder and general partner of Changcheng Investment Partners (P.R.C.), a private investment fund. From 2008 to 2018, she served as chief financial officer of Baidu Inc. (P.R.C.) and chief executive officer of Baidu Capital (P.R.C.). Prior to that, Ms. Li spent 14 years with General Motors, holding various senior finance positions, including chief financial officer of GM China and corporate controller for GMAC North American Operations. Ms. Li was born in 1967 and is a Canadian citizen.
February 2020), the chief financial officer and a member of the managing board of Royal DSM N.V. (The Netherlands). She was previously chief financial officer of SGS Ltd (Switzerland). Prior to joining SGS she worked as an auditor at Deloitte Ltd (Switzerland) and KPMG LLP (U.K.). Ms. Matchett was born in 1972 and is a Swiss, British and French citizen.
David Meline has been a member of ABB's Board of Directors since April 2016. He is the chief financial officer of Moderna Inc. (U.S.). From 2014 through 2019, Mr. Meline was the chief financial officer of Amgen Inc. (U.S.). He was formerly with the 3M Company (U.S.), where he served as chief financial officer. Prior to joining 3M, Mr. Meline worked for more than 20 years for General Motors Company (U.S.). Mr. Meline was born in 1957 and is a U.S. and Swiss citizen.
Geraldine Matchett has been a member of ABB's Board of Directors since March 2018. She is the co-chief executive officer (since
Satish Pai has been a member of ABB's Board of Directors since April 2016. He is the managing director and a member of the board of directors of Hindalco Industries Ltd. (India). He joined Hindalco in 2013 after 28 years with Schlumberger Limited (U.S.). Mr. Pai was born in 1961 and is an Indian citizen.
Jacob Wallenberg has been a member of ABB's Board of Directors since June 1999 and Vice-Chairman since April 2015. He is the chairman of the board of Investor AB (Sweden). He is vice-chairman of the boards of Telefonaktiebolaget LM Ericsson, FAM AB and Patricia Industries (all Sweden). He is also a member of the boards of directors of Nasdaq, Inc. (U.S.) and the Knut and Alice Wallenberg Foundation (Sweden) as well as a member of the nomination committee of SAS AB (Sweden). Mr. Wallenberg was born in 1956 and is a Swedish citizen.
Peter R. Voser has been a member and Chairman of ABB's Board of Directors since April 2015. He was ABB's Chief Executive Officer from April 2019 through February 2020. He is a member of the board of directors of IBM Corporation (U.S.). He is also a member of the board of directors of Temasek Holdings (Private) Limited (Singapore) as well as chairman of the board of PSA International Pte Ltd (Singapore), one of its subsidiaries. In addition, he is the chairman of the board of trustees of the St. Gallen Foundation for International Studies. He was previously the chief executive officer of Royal Dutch Shell plc (The Netherlands). Mr. Voser was born in 1958 and is a Swiss citizen.
Pursuant to article 21 of the Articles of Incorporation, the General Meeting of Shareholders elects individually each member of the Board of Directors and the Chairman of the Board of Directors. Taking into consideration Matti Alahuhta's decision not to stand for re-election and following a detailed review process, the Board of Directors has determined that its members have a very good mix of CEO, CFO, industry, geographic/regional, sustainability and technology experience, but recognizes that ABB needs to strengthen the gender diversity of the Board within the next two years, preferably at the Annual General Meeting 2022. For the Annual General Meeting 2021, the Board of Directors is not proposing any new members, but is nominating all of its other members for re-election.
The Board of Directors proposes the election of:
to the Compensation Committee for a term of office extending until completion of the Annual General Meeting 2022.
Pursuant to article 29 of the Articles of Incorporation, the General Meeting of Shareholders elects individually each member of the Compensation Committee.
The Board of Directors proposes the election of
• Dr. Hans Zehnder, attorney-at-law and notary, Bahnhofplatz 1, 5400 Baden, Switzerland
as independent proxy for a term of office extending until completion of the Annual General Meeting 2022.
Pursuant to article 15 of the Articles of Incorporation, the General Meeting of Shareholders elects the independent proxy. The Board of Directors confirms that the proposed candidate is independent.
The Board of Directors proposes that KPMG AG, Zurich, be elected as auditors for the financial year 2021.
Zurich, February 26, 2021 ABB Ltd Board of Directors
ABB's top priority remains protecting the health of our shareholders and employees. Therefore, the Board of Directors resolved that shareholders again will only be able to exercise their shareholder rights via the independent proxy. As a result, it unfortunately will not be possible for shareholders to attend the 2021 Annual General Meeting in person.
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As from March 5, 2021, the Annual Report will be available to the shareholders for inspection at the Company's head office at Affolternstrasse 44, Zurich Oerlikon, Switzerland, as well as in Sweden at ABB AB, Kopparbergsvägen 2, Västerås. The Annual Report will also be available electronically under www.abb.com/agm and will be mailed on request. The invitation including the agenda and the proposals of the Board of Directors will be mailed directly to shareholders who are registered in the Company's share register with the right to vote.
Shareholders entered in the share register with the right to vote on March 17, 2021, 3:00 p.m. (CET), are entitled to participate in the Annual General Meeting. They may exercise their shareholder rights solely by authorizing/issuing voting instructions to the independent proxy Dr. Hans Zehnder, attorney-at-law and notary, Bahnhofplatz 1, 5400 Baden, Switzerland. Authorization may be granted and voting instructions may be issued to the independent proxy either using the reply form enclosed or electronically (e-voting).
The reply form or a corresponding notification must reach the independent proxy not later than March 19, 2021 (by mail or e-voting). Reply forms or notifications arriving after that date will not be taken into consideration.
Shareholders may grant authorization or issue instructions electronically to the independent proxy (e-voting) via the shareholder platform at www.gvote.ch. The requisite login details are enclosed in the reply form. Shareholders may vote electronically, or change any instructions they may have communicated electronically, up to but no later than 11:59 p.m. (CET) on March 19, 2021.
For further information as well as instructions on how to register and vote electronically, please refer to www.abb.com/agm.
The entry of shareholders with the right to vote in ABB's share register does not affect the trading of shares held by such shareholders before, during or after the Annual General Meeting.
As of December 31, 2020, the total number of shares and votes in ABB Ltd was 2,168,148,264. As of the same date, the Company held 137,314,095 treasury shares, corresponding to 137,314,095 votes. The voting rights in treasury shares cannot be exercised at the Annual General Meeting.
On the day of the Annual General Meeting, from 10:00 a.m. (CET), we will upload speeches on www.abb.com/agm during which Peter Voser, Chairman of the Board
of Directors, and Björn Rosengren, CEO, will inform shareholders about the past financial year and ABB's future prospects. The Annual General Meeting itself will not be broadcast.
A record of the decisions taken by the Annual General Meeting will be available for inspection shortly after the Annual General Meeting at the Company's head office in Zurich Oerlikon, Switzerland, and will be published on www.abb.com/agm.
(Binding votes on the compensation of the Board of Directors and the Executive Committee)
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At the 2021 Annual General Meeting of ABB Ltd, there will be separate binding votes on the maximum aggregate compensation of the Board of Directors (Board) for its 2021–2022 term of office
and on the maximum aggregate compensation of the Executive Committee (EC) for 2022. There will also be a non-binding vote on the 2020 Compensation Report.
7.1. Binding vote on the maximum aggregate amount of compensation of the Board of Directors for the next term of office, i.e. from the 2021 Annual General Meeting to the 2022 Annual General Meeting
The Board is proposing to decrease the number of Board members to 10 in the 2021–2022 term of office compared with 11 in the 2020–2021 term. Compensation for individual Board members is planned to remain at the same level as in the previous period.
The Board proposes that shareholders approve a maximum aggregate compensation of the Board of CHF 4,400,000.
The compensation of the members of the Board consists only of fixed compensation and the Board members are required to take at least half of their compensation in the form of ABB Ltd shares.
The compensation principles for the members of the Board are described in article 33 of the Articles of Incorporation. Based on the proposals of the Compensation Committee, the Board determines the compensation of its members taking into account each member's position and responsibilities.
Additional information regarding compensation of the Board is available in the 2020 Compensation Report, which can be found in the Annual Report.
ABB has progressively increased the performance orientation of its compensation system while better aligning it to the Company's strategy, taking into consideration inputs from shareholders and other stakeholders. Further information regarding Executive Committee compensation, including the proposed changes for 2021, is available in the 2020 Compensation Report, which can be found in the Annual Report.
The main factors impacting changes in aggregate compensation from year to year are the number of EC members, each member's target compensation, and Company and individual performance during the relevant performance cycles.
Target compensation would be reached if EC members meet the performance criteria for a 100 percent payout of the short-term incentive (STI) award and for the allocation of 100 percent of the reference grant size of the long-term incentive (LTI) plan.
The proposed maximum aggregate EC compensation for 2022 of CHF 40,000,000 would only be reached if EC members meet the performance criteria for a 150 percent award under the STI plan and
a maximum allocation of 112.5 percent of the reference grant size under the LTI plan. Over the last 3 years, this level of STI award and LTI allocation for all EC members, on an aggregate basis, has not occurred at ABB.
The chart below shows the expected development of aggregate EC compensation from 2020 to 2022.
| 2020 | 2021 | 2022 | |||
|---|---|---|---|---|---|
| Aggregate EC compensation in CHF (millions) |
35.4 | 38.3 | 55.5 | 39.5 | 40.0 |
| Assumptions | Actual | Target | Maximum (approved at 2019 AGM) |
Maximum (approved at 2020 AGM) |
Maximum (proposed at 2021 AGM) |
| STI award percentage | 100% | 150% | 150% | 150% | |
| Adjustment of LTIP grant size | 0% | +12.5% | +12.5% | +12.5% | |
| Number of EC members | 13 | 12 | 9 | 9 |
For full description, see Compensation Report, which can be found in the Annual Report.
Share Register P.O. Box 8050 Zurich Switzerland
Phone: +41 43 317 57 00 [email protected]
www.abb.com
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