New long-term incentive plan for Fortum’s key personnel

The Board of Directors of Fortum Corporation has decided to establish a new share-based long-term incentive (LTI) arrangement for Fortum Group’s management and other key personnel. The new arrangement replaces the Group’s current share-based LTI arrangement.

The arrangement is a performance-based incentive scheme in which the number of shares granted is subject to Fortum’s achievement of annual corporate targets defined by the Board of Directors. The Board of Directors expects that Fortum will benefit from the LTI participants’ increased commitment to the company’s success brought-upon by equity participation.

The new LTI arrangement is divided into individual performance share plans during which the participants have the opportunity to earn company shares. Each plan begins with a three-year earning period after which the incentives are delivered to each participant in the form of Fortum shares. The earning period is followed by a subsequent two-year lock-up period during which the participant is not entitled to transfer or dispose of the shares. According to the terms of the new LTI arrangement, the maximum gross value of shares at delivery may not exceed the participant’s one-year salary. At this stage, the new arrangement concerns approximately 100 managers.

The new LTI arrangement will commence in 2008. The first time shares based on the new LTI arrangement will be delivered is in 2011 and the first time participants can transfer or dispose of these shares is in 2013. The new arrangement does not affect performance share plans that have begun earlier. The shares will be bought from market and thus there will be no dilution effect.

Fortum’s compensation programmes follow the guidelines for state-owned companies in Finland issued in June 2007.

Fortum Corporation
Board of Directors


Further information:
Peter Fagernäs, Chairman of the Board of Directors, +358 9 681 81 810