Incentive plans of listed companies have become increasingly important and certainly more controversial. In a new study published by our Nordic research analysts titled "Employee Incentive Plans in Sweden," we will shed light on some of the specifics of incentive plans encountered in the Swedish market.

There are generally two categories of equity-based incentive plans in Sweden: option plans and share plans. Among the options plans, we distinguish four instruments – call options, convertible bonds, subscription rights, and stock appreciation rights. Among the share plans are restricted share plans and matching share plans.

In Sweden, market practice indicates that the conversion price of stock options is at least equal to market value on, or close to, the date of grant. What makes Swedish stock option plans interesting are not so much the conversion price or instruments used, but how the taxation of stock options in Sweden has compelled companies to come up with inventive solutions.

To access the report, please visit the "What's New" section of RiskMetrics Group's Knowledge Center.