Share-based long-term incentive scheme 2020–2022 for the management and selected key employees of Nokian Tyres plc
Nokian Tyres plc Stock Exchange Release February 4, 2020 3:30 p.m.
The Board of Directors of Nokian Tyres plc has decided on a share-based long-term incentive scheme for the Company’s management and selected key employees for years 2020–2022 as a continuation to the earlier plans decided in 2019. The decision includes Performance Share Plan 2020 (“PSP 2020”) as the main structure and Restricted Share Plan 2020 (“RSP 2020”) as a complementary structure.
The purpose of the share-based incentive scheme is to align the goals of the Company’s shareholders and key personnel in order to increase the value of the Company in the long term and to commit key personnel to the Company and its strategic targets.
Performance Share Plan 2020
The Performance Share Plan consists of annually commencing individual three-year Performance Periods, followed by the payment of the potential share reward. The commencement of each individual Performance Period is subject to a separate Board approval.
The Performance Period (PSP 2020–2022) commences effective as of the beginning of 2020 and the potential share reward thereunder will be paid in the first half of 2023 provided that the performance targets set by the Board of Directors are achieved. The potential reward will be paid partly in shares of Nokian Tyres plc and partly in cash. Cash portion of the reward is intended to cover the taxes arising from the paid reward. Eligible to participate in PSP 2020–2022 are approximately 200 individuals, including the members of Nokian Tyres Management Team.
The potential share reward payable under the PSP 2020–2022 are based on the Earnings Per Share (EPS) growth and Return on Capital Employed (ROCE). The possible rewards paid based on the Performance Period of 2020–2022 will be a maximum of 569,260 gross shares.
If the individual’s employment with Nokian Tyres terminates before the payment date of the share reward, the individual is not, as a main rule, entitled to any reward based on the plan.
Restricted Share Plan 2020
The purpose of the Restricted Share Plan is to serve as a complementary tool for individually selected key employees of Nokian Tyres in situations like new hires and retention needs. It consists of annually commencing individual Restricted Share Plans, each with a three-year retention period after which the share rewards granted within the plan will be paid to the participants in shares of Nokian Tyres plc and partly in cash.
The commencement of each individual plan is subject to a separate Board of Directors approval.
A precondition for the payment of the share reward based on the Restricted Share Plan is that the employment relationship of the individual participant with Nokian Tyres continues until the payment date of the reward.
The next plan (RSP 2020–2022) within the Restricted Share Plan structure commences effective as of the beginning of 2020 and the potential share reward thereunder will be paid in the first half of 2023. The possible rewards paid based on RSP 2020–2022 correspond approximately to a maximum of 120,000 gross shares.
Other terms
Nokian Tyres applies a share ownership policy to the members of Nokian Tyres Management Team. According to this policy each member of the Management Team is expected to retain in his/her ownership at least 25% of the shares received under the share-based incentive programs of the Company until the value of his/her share ownership in the Company corresponds to at least his/her annual gross base salary.
The Board of Directors anticipates that no new shares will be issued based on the share-based incentive scheme and that the scheme will, therefore, have no dilutive effect on the registered number of the Company's shares.
Nokian Tyres plc
Päivi Antola, Senior Vice President, Investor Relations & Corporate Communications
Further information:
Tytti Bergman, Senior Vice President, People and Culture, tel. +358 10 401 7000
Distribution: Nasdaq Helsinki, media and www.nokiantyres.com
Nokian Tyres develops and manufactures premium tires for people who value safety and sustainability. Inspired by our Scandinavian heritage, we craft innovative products for passenger cars, trucks and heavy machinery that give you peace of mind in all driving conditions. Our Vianor chain provides tire and car services. In 2019, the company’s net sales were EUR 1.6 billion and it employed some 4,700 people. Nokian Tyres is listed on Nasdaq Helsinki. Further information: www.nokiantyres.com