Performance-based long-term incentive plan for Finnair's Executive Board

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Finnair Plc         Stock Exchange Release           9 October 2020 at 1.00 p.m. EEST

The Board of Directors of Finnair has approved a new performance share plan covering the period from 1 July 2020 through 30 June 2023. Within the plan, the participants have the opportunity to earn Finnair shares and cash as a long-term incentive reward, if the performance targets set by the Board of Directors for the plan are achieved. The arrangement is directed to the company’s Executive Board, including the CEO. The purpose of the arrangement is to motivate the management to work for increasing the shareholder value in the long-term and to commit the management to the company. At the same time, the Board of Directors has decided to cancel the Executive Board members’ and the CEO’s participation in the existing 2018-2020, 2019-2021 and 2020-2022 performance share plans.

The arrangement includes a three-year performance period. The performance criteria are decided annually. In addition, there is a threshold performance criterion defined for the whole three-year performance period, which is net cash flow for operating activities. The performance criteria applied to the first 12-month period are comparable EBITDA, gearing, lost time injury frequency and fuel efficiency.

The potential rewards will be delivered to the participants after the performance period, starting Q3 2023. When delivering the rewards, the annual variable pay cap mentioned below is followed.

If the targets set for the plan for the performance period 1 July 2020-30 June 2023 are fully achieved, the maximum number of shares to be delivered based on this plan is approximately 20,000,000. This number of shares represents a gross earning. The reward is paid as a combination of shares (50%) and cash (50%), as well as a cash amount for estimated payroll tax.

The members of Finnair’s Executive Board are expected to retain at least fifty per cent of the net shares received based on the arrangement until their share ownership in Finnair corresponds to at least their annual gross base salary.

The maximum combined value of all variable compensation paid to an individual participant in any given year may not exceed hundred and twenty per cent of the participant’s annual gross base salary.

At the beginning of the arrangement, 9 persons are eligible to participate in the arrangement, comprising of Executive Board members and the CEO.


Further information:
Finnair communications, 358 9 818 4020,

Principal media

Finnair is a modern premium network airline, specialising in passenger and cargo traffic between Asia and Europe. Helsinki’s geographical location gives Finnair a competitive advantage, since the fastest connections between many European destinations and Asian megacities fly over Finland. Finnair is the only Nordic network carrier with a 4-star Skytrax ranking and a member of the oneworld alliance. In 2019, Finnair’s revenues amounted to EUR 3,098 million and it carried over 14.7 million passengers. Finnair Plc’s shares are quoted on the Nasdaq Helsinki stock exchange.