Industrivärden and Investor refuses to disclose how they counted up the price of the options as Ericsson’s new ceo Börje Ekholm got to buy in telekomjätten.
If the options have been sold too cheaply, he has received a hidden income of several million to be taxed.
According to what Di experience are now likely to be a review of the Tax.
It was in connection with Börje Ekholm, syria was appointed ceo of Ericsson in October that the company’s two largest shareholders, Industrivärden and Investor, announced that they will be exhibiting two million options, a million each, with an exercise price of 80 crowns of seven years to the new ceo. A week later it became known that Börje Ekholm had purchase options for 49 cents apiece.
Industrivärden and Investor has allowed revisionsjätten EY calculate the value of the options according to the Black & Scholes (B&S) valuation model.
the Value of the options under the BS model, however, varies greatly depending on the volatility and the interest rate that is used, particularly when it comes to options with long maturity. The higher the volatility the higher the price of the call options. But the volatility and the interest rate that the EY have used to come to the conclusion that the options were worth 49 penny to Industrivärden and Investor, not state.
"the Valuation is made by an independent third party. The option price is based both in what refers to the volatility in the interest rate with more on market-based assumptions", says Sverker Sivall, communications director at Industrivärden.
Both he and the Investor’s communications director Stefan Stern points out that an important parameter for the design of the option and the pricing of options "has been a desire to make the options neutral for the dividends paid during the eligibility period".
"in other words, if the dividends deviates from the valuation based on a correction of the strike price to be. The valuation is based on the market, the estimated dividends during the vesting period, which amount to a considerable sum. The price thus depends of this mechanism in respect of the dividends", says Stefan Stern.
Simply put, this means to price of Börje ekholm’s options became lower the higher the utdelningsantaganden brought into the calculation.
On the other hand, the exercise price of the options higher than 80 dollars on Ericsson’s dividends during the maturity will be lower than utdelningsantagandena in the valuation of the warrants.
According to the optionshandlare on the market have the options to Börje Ekholm, also if you take into account that they are neutralized for the expected dividends, however, are sold with implied volatility that is lower than Ericssonaktiens historical volatility. Ericsson’s volatility in the last five years is 28 and the last year of 37, according to the database Factset.
According to external estimates, as the Di has taken part of is it possible to justify the exercise of the options which Börje Ekholm bought should have cost upwards of 3 crowns, some claim to the and with well over 3 sek.
the price Difference between the 49 cent, and 3 crowns means that the Investor’s and Industrivärden’s shareholders given away upwards of 5 million. It is money that can also be considered as hidden income that Börje Ekholm should be taxed.
According to what Di experience, the Swedish Tax agency is likely to review the optionsaffären carefully.
"We omvärldsbevakar like any other, but we never responds to the controls we do. We work with large projects in order to clarify our view in this type of valuation issues. Finally, there is a bevisfråga", says Pia Blank Thörnroos, a legal expert at the Swedish Tax agency.
According to the Swedish corporate governance is that remuneration to the ceo:n n n n n styrelsefråga. Why depart from the principle by which the owners provide an economic benefit to Ericsson’s new ceo?
"of Ceo compensation is a styrelsefråga. Through the current option has the principal owner of the Ericsson contribution that the ceo made a private investment against the share price, which further strengthens the intressegemenskapen with all the company’s shareholders", says Sverker Sivall.
How should the smaller shareholders in the Ericsson know to Börje Ekholm works for any owner’s best when he has got attractive incentive programs from the two largest shareholders?
"We believe that it is in all shareholders interest that, if possible, strengthen intressegemenskapen between the shareholders and the ceo. To the options shall provide any value at all requires a competitive total return over the vesting period, which benefits all shareholders," says Stefan Stern.
Ericsson chairman Leif Johansson has been offered the same optionspaket?
"No, the current agreement has been prepared in connection with the Ericsson board of directors appointed a new ceo in the company", says Stefan Stern.
Last year asked Industrivärden options in Sandvik to the chairman of the board Johan Molin, were you using the same formula as with Börje ekholm’s options?
"In both cases, the call options have been granted to the market conditions, calculated with the B&S, where the values has been assured by independent external parties. In general, the agreements have been designed to suit the prevailing conditions in each case", says Sverker Sivall.
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