Terveystalo's Board of Directors decided on new long-term incentive plan for key employees
Terveystalo Plc. stock exchange release 3 December 2020 at 9.00 EET
Terveystalo Plc's Board of Directors has decided on a new long-term share-based incentive program for key personnel. The plan replaces the previous long-term incentive program. The long-term incentive plan consists of a Performance Share Plan for Terveystalo's management and other key personnel, a Bridge plan for the President and CEO, and of a Restricted Share Plan for specific situations such as key recruitments or for recognizing key talent.
The Performance Share Plan is based on a rolling 3-year performance period structure, with a new performance period starting at the beginning of each year if so decided by the Board. The Board decides on the participants, performance measures and targets as well as earning opportunities on an annual basis. The purpose of the program is to align the objectives of shareholders and key personnel to increase the company's value in the long term, and to commit key personnel to implementing Terveystalo's new, strategy by offering them a competitive, share-based incentive program. Terveystalo shared its plans regarding the new strategy at Capital Markets Day in September 2020.
Performance Period 2021-2023 of the Performance Share Plan (PSP)
During the performance period 2021-2023, the performance measures on the basis of which share rewards may be paid are relative Total Shareholder Return (TSR) with 60 per cent weight, and the development of the company’s Digital footprint with 40 per cent weight, the latter measuring the implementation and transformation of the company's strategy. The transformation measure is a combination of productivity development and growth of digital service sales.
Terveystalo's Board of Directors confirms the total amount of shares earned after the end of the performance period. The shares that may be paid based on the 2021–2023 earning period will be paid in Terveystalo Plc shares after the end of the performance period, provided that the performance targets set for the program by the Board are achieved. Taxes and tax-like payments to the recipient are deducted from the share reward, after which the remaining net amount is paid to the participants in shares.
No more than approximately 70 people selected by the Board are eligible to participate in the program, including members of Terveystalo's Executive Team.
Bridge Plan 2021-2022
The one-off CEO-only plan is intended to cover the transition from the old long-term incentive plan to the new plan. The performance metrics are the same as in the PSP 2021-2023 except for a shorter performance period. Any share awards will be paid after the end of the performance period, provided that the performance targets are met.
If the level of performance entitling to the maximum awards based is reached, the total maximum amount of share awards to be paid under the PSP and Bridge plan is 700,600 shares (gross amount before deduction of applicable taxes). The total value of the program, estimated based on the current value of Terveystalo's share, is approximately EUR 6.8 million.
Restricted Share Plan, RSP 2021 - 2023
The purpose of the Restricted Share Plan is to act as a supplementary structure for separately selected key personnel of Terveystalo in special situations. The persons invited to the plan are granted share rewards consisting of fixed number of shares with a restriction period until the end of the program, after which the granted share reward will be paid provided that the participant’s employment with Terveystalo continues. The total amount of share awards to be paid is a maximum of 64,200 shares (gross amount before deduction of applicable taxes).
The total value of this individual program, estimated based on the current value of Terveystalo's share, is approximately EUR 0.6 million.
Other key terms
Terveystalo applies a share ownership requirement to the members of the Executive Team. Each member of the Executive Team is expected to retain at least 50 percent of the net shares received under the long-term incentive plan until his or her shareholding in Terveystalo is at least equal to his or her annual gross base salary.
If a key employee's employment or contractual relationship ends before the reward is paid, the reward is as a main rule not paid.
Terveystalo Plc
Board of Directors
More information:
Kati Kaksonen, Director, Investor Relations and Corporate Responsibility
Tel. 010 345 2034
Kati.kaksonen@terveystalo.com
Distribution:
Nasdaq Helsinki Oy
Major media
www.terveystalo.com
Terveystalo in brief
Terveystalo is a listed company on the Helsinki Stock Exchange. Terveystalo is the largest healthcare service company in Finland with net sales and network. The company offers versatile primary and secondary healthcare services for corporate and private customers and the public sector. The nationwide network covers 300 locations across Finland. The clinic network is complemented by 24/7 digital services.
In 2019, Terveystalo had approximately 1.2 million individual customers and approximately 3.7 million visits to a physician. Terveystalo employs over 13,000 health care professionals. www.terveystalo.com