Pihlajalinna establishes a share-based long-term incentive programme
The Board of Directors of Pihlajalinna Plc has approved the establishment of a share-based long-term incentive programme for the key employees of Pihlajalinna.
The objective of the programme is to align the interests of the key employees with those of Pihlajalinna’s shareholders and, thus, to increase the company value in the long term. The programme also aims at driving performance culture, retaining key employees and offering the key employees competitive compensation for excellent performance in the company.
The programme includes a three-year scheme and none of the share rewards received by the key employees thereunder may be sold or transferred prior to the year 2021. The key employee shall, in addition, make an investment in Pihlajalinna shares as a precondition for participation in the programme.
The programme consists of a matching share plan which is based on the afore-mentioned individual share investment and which has one-year retention period (calendar year 2018) as well as a performance matching plan consisting of two- and three-year performance periods, comprising the calendar years 2018-2019 and 2018-2020 respectively.
The matching share plan comprises the individual key employee’s investment in Pihlajalinna’s shares and the delivery of one matching share for each invested share without consideration (gross before the deduction of the applicable payroll tax) in the calendar year 2019. Both the invested shares and the matching shares will be subject to a two-year transfer restriction.
The performance matching plan comprises separate two- and three-year performance periods. The potential share rewards will be delivered after the respective performance periods during the calendar years 2020 and 2021 respectively if the performance targets set by the Board of Directors are achieved. A precondition for a key employee’s participation in the performance matching plan is the afore-mentioned investment in Pihlajalinna’s shares. The share rewards will be subject to a two-year transfer restriction.
The performance criteria applied to the performance matching plan are the adjusted operating profit of Pihlajalinna Group and key operative targets.
Additionally, a precondition for the payment of share rewards based on the plan is that the realized adjusted operating profit for the calendar year 2018 meets the outlook published by the company.
If all the eligible key employees within the maximum number of participants referred to below participate in the programme by fulfilling the investment precondition and if the performance targets set for the two performance periods are fully achieved, the maximum aggregate amount of share rewards that may be delivered based on the programme is approximately 840,000 shares (gross before the deduction of the applicable payroll tax).
The aggregate maximum value of the programme, estimated based on the average price of Pihlajalinna’s share the last trading day preceding the date hereof and assuming that the eligible participants fulfil the afore-mentioned investment requirement in full, is approximately EUR 9,665,040.
The Board of Directors has as of now selected approximately 20 key employees as eligible for participation in the programme. The number of key employees eligible for participation in the programme, including the persons selected as of now and possible additional participants, is approximately 65 persons.
According to a share ownership recommendation applied by the company, each participant of the program who is a member of the Pihlajalinna’s Group Management Team is expected to accumulate and, once achieved, maintain a share ownership in the company corresponding in value to the individual’s annual base salary. Each such individual is expected to retain at least fifty per cent of the shares received under the long-term incentive programme in his/her ownership until the above ownership level is fulfilled.
Chairman of the Board of Directors
Mikko Wirén, Chairman of the Board of Directors, +358 40 660 9865