Tue February 9 03:50 pm 2021 in category Stock exchange releases
Share-based long-term incentive scheme 2021–2023 for the management and selected key employees of Nokian Tyres plc
Nokian Tyres plc Stock Exchange Release February 9, 2021 at 3:50 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 2021–2023 as a continuation to the earlier plans decided in 2019 and 2020. The decision includes Performance Share Plan 2021 (“PSP 2021”) as the main structure and Restricted Share Plan 2021 (“RSP 2021”) 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 2021
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 2021–2023) commences effective as of the beginning of 2021 and the potential share reward thereunder will be paid in the first half of 2024 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 2021–2023 are approximately 220 individuals, including the members of Nokian Tyres Management Team.
The potential share reward payable under the PSP 2021–2023 are based on the Earnings Per Share (EPS) and Return on Capital Employed (ROCE). The possible rewards paid based on the Performance Period of 2021–2023 will be a maximum of 534,898 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 2021
The purpose of the Restricted Share Plan is to serve as a complementary long-term incentive tool, used selectively for retention of Nokian Tyres key employees. 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. In addition to this precondition, a financial performance criteria is applied to Nokian Tyres Management Team. The criteria is a threshold value for Return on Capital Employed (ROCE), which must be exceeded for a potential payment of a share reward based on the Restricted Share Plan 2021-2023.
The next plan (RSP 2021–2023) within the Restricted Share Plan structure commences effective as of the beginning of 2021 and the potential share reward thereunder will be paid in the first half of 2024. The possible rewards paid based on RSP 2021–2023 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, Corporate Communications & Investor Relations
Further information:
Tarja Kaipio, Senior Vice President (Interim), Human Resources, tel. +358 104 017 268
Distribution: Nasdaq Helsinki, media and www.nokiantyres.com