Swedbank's Board of Directors resolves on a revised remuneration program to promote long-term sustainability

Press Release 20 August 2010

Swedbank's Board of Directors resolves on a revised remuneration program to
promote long-term sustainability 

Swedbank's Board of Directors has resolved on extensive changes in the bank's
performance based remuneration program for 2010. The program is the first of its
kind in the Swedish banking market to convert a portion of variable cash
remuneration to restricted shares. The Board's resolution that a portion of the
variable remuneration will be deferred and paid in the form of shares is subject
to the approval of the 2011 Annual General Meeting. 


The program in summary:

• Swedbank's performance and share based remuneration program for 2010 (“Program
2010”) divides variable remuneration into two parts, cash remuneration and
deferred remuneration in the form of shares.
• The program implies no increase of the total amount of variable remuneration
as compared to previously. 
• The cash remuneration is paid out in the year after the vesting year and the
deferred remuneration is held in escrow for three years.
• For individuals who qualify as risk-takers according to the Financial
Supervisory Authority's definition, 60 percent is deferred, while for others who
qualify for variable remuneration 40 percent is deferred.
• The program's performance targets are based on the Group's performance after
tax, profit adjusted for capital costs and risks in each business area and
risk-adjusted results on an individual and/or team level as well as a number of
behavioral variables tied to the Swedbank Group's values.
• The program includes approximately 6,400 employees of the business areas
Retail, Large Corporates & Institutions and Asset Management as well as certain
personnel within the support functions Group Business Support, Group Risk, Group
Finance and Group Treasury.
• In 2010, around 830 employees of the program qualify as risk-takers according
to the Financial Supervisory Authority's definition.
• The performance targets for employees who audit operations (including the risk
control function) are independent of the results of the units they audit.
• Program 2010 does not include senior management who are members of the Group
Executive Committee or employees of Baltic Banking or the Russian and Ukrainian
operations.
• The program contains a ceiling on the deferred share-related component in the
Group (a maximum of SEK 333 million excluding social security costs), a ceiling
on allotments in each business area and a ceiling on each employee's
remuneration.
• At a share price of SEK 85 in January 2011, the maximum dilution effect is 0.4
percent.
• The delivery of shares in 2014 is contingent on evidence that the performance
targets that have been achieved are sustainable long-term.
• As proposed the program will be repeated annually.

Swedbank's CEO Michael Wolf comments: 

“First it is important to state that the Board has made this decision in order
to create a more long-term oriented remuneration system, not because we are
being forced to. We have taken a large number of measures since spring 2009 to
build a more sustainable bank, and this is another step in that direction.
Through this change we harmonize what had become a wide array of more than 70
different remuneration programs previously established in the bank and switch to
a single system that is open, transparent and is easy for all to understand by
motivating employees to help strengthen the bank long-term.”

Swedbank's Chairman of the Board Lars Idermark comments: 

“This program, with a deferred share-based component, harmonizes the interests
of employees with those of shareholders and encourages long-term value creation
in the bank. We are convinced that this will benefit Swedbank's shareholders,
customers and employees. Through this program we improve our ability to recruit
and retain competent personnel and encourage key persons to take actions that
strengthen the bank long-term.”

Swedbank has presented the proposal to its largest Swedish shareholders in order
to create support for the principles of the program. The resolution regarding
the program's deferred remuneration will be taken by the 2011 Annual General
Meeting. 

Please find attached the pdf document with appendix.


For further information, please contact:
Marie Hallander-Larsson, Head of Group HR, tel: +46 73 344 6640
Thomas Backteman, Head of Corporate Affairs, tel: +46 708 311 166
Anna Sundblad, Group Press Manager, tel: +46 70 321 3995

Swedbank promotes a sound and sustainable financial situation for the many
people, households and companies. Our vision is to contribute to a development
“Beyond Financial Growth”. As a leading bank in the home markets Sweden,
Estonia, Latvia and Lithuania, Swedbank offers a wide range of financial
services and products. Swedbank has 9.5 million retail customers and 535,000
corporate customers with nearly branches in Sweden and over 200 branches in the
Baltic countries. The group is also present in other Nordic countries, the U.S.,
China, Russia and Ukraine. As of June 30 2010 the group had total assets of SEK
1,905 billion. Read more at www.swedbank.com