The Board of Directors of Valmet Oyj has decided on new share-based incentive plans for key employees and on the acquisition of own shares
Valmet Oyj's stock exchange release on December 17, 2020 at 1:00 p.m. EET
HELSINKI, Dec. 17, 2020 /PRNewswire/ -- The Board of Directors of Valmet Oyj has decided on new share-based long-term incentive plans (LTI Plans), a Performance Share Plan and a Deferred Share Plan, as well as a restricted shares pool (Restricted Pool) for Valmet's key employees. The aim of the plans is to align the interests of the shareholders and the key employees in order to increase the value of Valmet Oyj (the Company) in the long run, to steer the key employees towards achieving the Company's selected strategic targets, to commit the key employees to the Company, and to offer them a competitive reward plan based on holding the Company's shares.
The Performance Share Plan directed to the Executive Team members includes a three-year performance period parallel to a one-year performance period. Valmet's Board of Directors decides on the predefined performance measures and targets in the beginning of each performance period. The potential reward for the three-year performance period 2021-2023 is based on reaching predefined strategic targets of the Company. The potential reward for the one-year performance period 2021 is based on Valmet's Comparable EBITA margin and orders received growth (%) of the stable business, that is, the Services and Automation business lines. The potential reward for the performance period 2021-2023 will be paid in Company shares in 2024, and the potential reward for the performance period 2021 will be paid in Company shares in 2022. The potentially earned share reward represents a gross reward from which the applicable payroll tax is withheld, and the remaining net balance is paid to the key employee in shares.
The Deferred Share Plan directed to other key employees and management talents includes a one-year performance period, the year 2021. The predefined performance measures and targets are decided by Valmet's Board of Directors and will be the same as in the Executive Team's Performance Share Plan, that is Valmet's Comparable EBITA margin and Orders Received growth (%) of the stable business. The potential reward for the performance period 2021 will be paid in Company shares in 2022. The potentially earned share reward represents a gross reward from which the applicable payroll tax is withheld, and the remaining net balance is paid to the key employee in shares.
The rewarded shares based on the one-year performance period from both the Performance Share Plan and the Deferred Share Plan may not be transferred during a two-year restriction period. Should a key employee's employment or service end during the restriction period, he or she must, as a rule, gratuitously return the shares given as reward to the Company. As a rule, no reward is paid if the key employee's employment or service at Valmet ends before the reward payment.
The Performance Share Plan is directed to Valmet's Executive Team, currently 13 participants, and the Deferred Share Plan is directed to a maximum of 130 participants, of which approximately 80 are key employees in management positions, and approximately 50 are management talents. The maximum total amount of potential share rewards to be paid on the basis of the performance periods 2021-2023 of these two plans is approximately 460,000 shares in Valmet Oyj, representing the gross reward before the deduction of taxes and tax-related costs arising from the reward. The estimated maximum total expense of the Performance Share Plan and the Deferred Share Plan for the performance period 2021-2023, based on Valmet's current share value, is approximately EUR 10 million.
As part of total remuneration, for example for retention purposes, the Board of Directors has also decided on an additional incentive element for 2021, the Restricted Pool, from which fixed share grants can be made to individually selected key employees. Restricted pools are intended to be annually commencing, but any future restricted pool is subject to separate approval by the Board of Directors. In 2021, a maximum of 69,000 shares can be allocated to possible participants in the Restricted Pool, representing the gross reward before the deduction of taxes and tax-related costs arising from the reward. As a rule, the restriction period for these shares is three years after which the potentially granted share rewards are paid in Company shares. A precondition for the payment of the share reward based on the Restricted Pool is that a threshold Valmet comparable EBITA is exceeded and that the employment relationship of the individual participant with Valmet continues until the payment date of the reward.
Both the Performance Share Plan and the Restricted Pool include a recommendation for the members of Valmet's Executive Team to own and hold an amount of Company shares equaling to their gross annual base salary (100 percent ownership recommendation).
Acquisition of own shares
The Board of Directors of Valmet has in its meeting on December 17, 2020 decided to use the authorization granted by the Annual General Meeting held on June 16, 2020 to repurchase the Company's own shares. Based on the authorization, the Board has decided to initiate a fixed-term share buy-back program for the purpose of acquiring the Company's own shares to meet part of the obligations arising from the LTI Plans and the Restricted Pool incentive. The share acquisitions will begin at the earliest on February 8, 2021 and will end at the latest on March 5, 2021. The maximum number of shares to be acquired is 100,000, corresponding to a value of approximately EUR 2.3 million based on the closing share price of the last trading day preceding the date hereof. The shares will be acquired at market price in public trading on Nasdaq Helsinki Ltd.
Further information, please contact:
Julia Macharey, SVP, Human Resources and Operational Development, Valmet,
tel. +358 10 672 0022
Pekka Rouhiainen, Director, Investor Relations, Valmet, tel. +358 10 672 0020
VALMET
Kari Saarinen
CFO
Pekka Rouhiainen
Director, Investor Relations
Valmet is the leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. We aim to become the global champion in serving our customers.
Valmet's strong technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production. Our advanced services and automation solutions improve the reliability and performance of our customers' processes and enhance the effective utilization of raw materials and energy.
Valmet's net sales in 2019 were approximately EUR 3.5 billion. Our 14,000 professionals around the world work close to our customers and are committed to moving our customers' performance forward - every day. Valmet's head office is in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.
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