Kesko's share-based commitment and incentive plans for 2018–2021

Kesko Corporation's Board of Directors has decided that the target group for the 2018–2019 performance period of Kesko’s performance and share based commitment and incentive plan will comprise approximately 130 members of Kesko’s management and other specified key persons. The Board has also confirmed the criteria for 2018 for both the 2017–2020 plan initiated in 2017 and the 2018–2021 plan. The Board has also decided to initiate a restricted share-based commitment and incentive plan for 2018–2020. 

Kesko’s share-based commitment and incentive plan comprises two share-based plans, which were first communicated in a stock exchange release on 2 February 2017. The Performance Share Plan (PSP) consists of individual annually commencing share plans, each with a two-year performance period and a two-year commitment period following the payment of the potential share award. The PSP is complemented by a Restricted Share Pool (RSP), which consists of annually commencing share plans. Each RSP plan includes a three-year commitment period, after which the potentially granted share awards of the individual plan are paid to the participants in Kesko’s B shares, provided that the participant’s employment or service relationship with Kesko Group continues until the payment of the awards. 

Kesko Corporation's Board of Directors has decided that the target group for the 2018–2021 PSP will comprise in total approximately 130 members of Kesko’s management and other specified key persons. The Board of Directors has decided to set the development of Kesko Group's tax free sales (%), Kesko Group's comparable return on capital employed (ROCE,%) and the absolute total shareholder return (TSR, %) of a Kesko B share as the performance criteria for the 2018 calendar year, therefore matching the 2017 criteria. A maximum total of 340,000 Kesko B shares may be granted under the 2018–2021 PSP. This number of shares represents gross earnings, from which the applicable withholding tax is deducted and the remaining net amount is paid to the participants in shares. 

Kesko Corporation's Board of Directors has also decided on initiating a RSP plan for 2018–2020. The plan has a three-year commitment period, after which the potentially granted share awards for an individual plan will be paid to the participants in Kesko B shares, provided that their employment or service relationships with Kesko Group continue until the payment of the awards. The purpose of the restricted share plan is to serve as a complementary long-term share plan to be used as a commitment instrument for selected key persons in special situations. In addition to the above employment precondition, Kesko may set participant-specific or company-specific criteria, the fulfilment of which is a precondition for the payment of the restricted share awards. The total maximum amount of share awards payable under the RSP 20182020 is 20,000 Kesko B shares. This number of shares represents gross earnings, from which the applicable withholding tax is deducted and the remaining net amount is paid to the participants in shares. Any potential share awards payable under the RSP plan commencing in 2018 will be paid out in the spring of 2021. 

At its discretion, the Board may decide not to pay a share award or to recover an award that has already been paid, if the recipient has been found guilty of malpractice or an action in breach of Kesko’s ethical or responsibility principles or guidance that, as a whole, cannot be considered insignificant, or if there are weighty grounds for assuming that the recipient is guilty of such acts.  

In January 2018, Kesko Corporation’s Board of Directors decided, based on the fulfilment of the performance criteria for the 2017 performance period of the transitional share-based incentive plan (Bridge Plan), to grant a total of 133,751 own B shares held by the Company as treasury shares to the members of management and other key persons who were included in the target group for the 2017 performance period. The Board of Directors’ decision and the transfer of the shares were communicated in stock exchange releases published on 1 February 2018 and 15 March 2018, respectively. 

The amount of share award paid to a share plan participant on a single year must not exceed the maximum amount separately set by the Board of Directors. 

Kesko applies a share ownership recommendation policy to the members of Kesko's Group Management Board. According to the recommendation, each Group Management Board member shall maintain a holding of at least fifty per cent of the net shares they have received under the Company's share-based compensation scheme until their holding of Kesko shares corresponds to at least their fixed gross annual salary. 

Further information is available from Matti Mettälä, Executive Vice President,
tel. +358 105 322 200.
 

Kesko Corporation  

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Nasdaq Helsinki Ltd
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www.kesko.fi
 

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