Board of Directors of Metsä Board has decided on the share-based incentive scheme for 2023–2027
Metsä Board Corporation Stock exchange release 28 December 2022 at 2:15 pm EET
The Board of Directors of Metsä Board has made a decision on the share-based incentive scheme for management and key employees for 2023–2027.
The Board of Directors (“Board”) of Metsä Board Corporation (“Metsä Board”) has made a decision on Metsä Board’s and its subsidiaries’ (collectively “Group”) management’s performance- and share-based incentive scheme (“Performance-based Scheme”) and the key employees’ share-based incentive scheme (“Incentive Scheme”), both for 2023–2027.
Management’s Performance-based Scheme 2023–2027
The Performance-based Scheme will be established as part of the Group’s management’s incentive and engagement scheme. The purpose of the Performance-based Scheme is to align the owners’ and management’s goals in increasing the value of the Group in the long term, and to incentivise managers to implement the shared strategy and offer them a competitive reward scheme-based on shareholding.
The Performance-based Scheme offers its target group the opportunity to earn Metsä Board’s series B shares (METSB) (“Shares”) as a reward for achieving the earnings criteria targets set by the Board for each earnings period. The Performance-based Scheme has three (3) earnings periods of three (3) calendar years each: 2023–2025, 2024–2026 and 2025–2027. After each earnings period, there is a restriction period of two (2) years, during which it is not possible to transfer Shares earned through the scheme. The restriction period ends on 31 December 2027 for Shares earned during earnings period 2023–2025, on 31 December 2028 for Shares earned during earnings period 2024–2026, and on 31 December 2029 for Shares earned during earnings period 2025–2027.
The share of the maximum reward paid to managers is determined by how well the targets set for the earnings period were met. The scheme’s potential reward for the earnings period 2023–2025 will be based on two equal factors: the development of Metsä Group’s and Metsä Board Group’s return on capital employed (ROCE, %) as determined by the Board of Directors. Additionally, the Board has the right to partially or completely cut rewards in accordance with the scheme if certain criteria related to the development of the Group’s operating result and equity ratio are not met, or if the amount of the rewards exceeds the personal maximum bonus amount determined for managers.
At the beginning of earnings period 2023–2025, 25 people are covered by the scheme, including all members of Metsä Board’s Corporate Management Team and other managers in key positions in the Group. The Board will annually determine the Group’s managers covered by the Performance-based Scheme and determine their maximum rewards and earnings criteria. Achieving the targets set for the earnings criteria determines the amount of the reward paid to the manager in question. The reward paid according to the Performance-based Scheme consists of a share paid in Shares, and a share paid in cash, which serves to cover taxes and other costs incurred to the manager. If the manager terminates their employment or executive employment agreement with a company belonging to the Group, or if the manager’s employment or executive employment agreement is collectively agreed to be terminated before the reward is paid, the manager is not eligible for rewards paid according to the scheme, as a rule.
Based on current information, the rewards paid based on the earnings period 2023–2025 are estimated to be approximately EUR 1.9 million at the target level, and EUR 3.8 million at the maximum level. The share of the rewards paid in Shares for the earnings period 2023–2025 is currently estimated to approximately 125,000 Shares overall at the target level, and approximately 250,000 Shares at the maximum level, including the share paid in cash.
Key Employees’ Share-based Incentive Scheme 2023–2027
The Incentive Scheme will be established as part of the Group’s key employees’ incentive and engagement scheme. The purpose of the Incentive Scheme is to incentivise key employees to implement the Group’s shared strategy and offer them a competitive reward scheme based on shareholding, and to align the owners’ and key employees’ goals in increasing the value of the Group in the long term.
The Incentive Scheme offers the key employees in its target group the opportunity to receive Shares as rewards while their employment or executive employment relationship is valid and they continue to engage in work until the end of the restriction period. The Board determines the key employees belonging to the target group during the validity of the Incentive Scheme and determines their rewards. The Incentive Scheme consists of restriction periods that last a minimum of twelve (12) months and a maximum of thirty-six (36). The Board decides on the starting date and duration of the restriction period for each key employee.
The reward paid according to the Incentive Scheme consists of a share paid in Shares and a share paid in cash. The share paid in Shares is defined as the net reward after the share in cash has covered the taxes and other expenses incurred to the key employee due to the reward. The Rewards of the Incentive Scheme are paid when the restriction period ends. The Incentive Scheme does not have any particular earnings criteria for the rewards. However, the person’s employment relationship must remain valid until the end of the restriction period for them to be eligible for the reward. If the key employee terminates their employment or executive employment agreement with a company belonging to the Group, or if the key employee’s employment or executive employment agreement is collectively agreed to be terminated before the reward is paid, the key employee is not eligible for rewards paid according to the scheme, as a rule.
The Board determines the Group’s key employees to be covered by the Incentive Scheme according to their discretion.
METSÄ BOARD CORPORATION
Further information:
Ilkka Hämälä, Chair of the Board of Directors, Metsä Board, tel. +358 10 4612
Metsä Board
www.metsagroup.com/metsaboard
Metsä Board is a leading European producer of premium fresh fibre paperboards. We focus on lightweight and high-quality folding boxboards, food service boards and white kraftliners. The pure fresh fibres we use in our products are a renewable and recyclable resource, that can be traced back to sustainably managed northern forests. We are a forerunner in sustainability, and we aim to have completely fossil free mills and raw materials by the end of 2030.
Together with our customers we develop innovative packaging solutions to create better consumer experiences with less environmental impact. In 2021 our sales totalled EUR 2.1 billion, and we have around 2,400 employees. Metsä Board, part of Metsä Group, is listed on the Nasdaq Helsinki.