June 2022 HR Lineup

HR L I NEUP JUNE 202 2

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— Short-Term Incentives Procedure

Revised version is now available

The Short-Term Incentive (STI) procedure issued under the ambit of the Corporate HR “Performance and Reward Policy” pro vides an overview of the types of Short Term Incentive plans and describes the core, mandatory rules for their design and implementation. This procedure was updated to include changes effective from January 1, 2022. The updates achieved further standard- ization and simplification as follows: awards uses base salary (or equiva- lent) on the last day of a performance period. For example, for eligible em ployees on the Annual Incentive Plan (AIP), the base salary and level of STI as of December 31st would be consid ered the basis for award calculation. • The assessment of the individual per formance measure (IPM) within AIP for eligible employees hired in the last quarter of a performance period is to be calculated at a flat rate of 100% (at target). A manager’s assessment • The approach to calculating STI

of individual performance in this situ- ation is not required.

This update aligns with the “People Performance Management” process, where employees joining post-Octo ber 1st of a performance period will only set goals for the subse quent year.

• The calculation of STI award for spe cific employment situ-ations such as leave of absence, maternity/pater nity leave, business divestitures, etc., is explained. Note a few countries have exceptional approval for deviations to the procedure to respect any local legal situations. The revised version of the procedure is now on the “ABB Governance Portal”. Please contact your HR Business Partner or respective country C&P (Compensation & Performance) colleague for questions related to specific countries or your BA Performance & Reward team for any other questions.