Incentive programs

Share-based incentive plans for the management and selected key persons

The Group’s management and key personnel are covered by the company’s share-based longterm incentive plan. The system consists of a performance-based share reward system (Performance Share Plan “PSP”) as the main structure and a conditional share reward system (Restricted Share Program “RSP”) as a supplementary share reward system. The purpose of the plan is to align the objectives of the owners and management to develop the company’s value and to commit the management and key personnel to the company and to the achievement of the company’s strategic goals by offering them a competitive long-term incentive plan.

Company’s Performance Share Plan currently includes three 3-year performance periods, calendar years 2023-2025, 2024-2026 and 2025-2027. For each period two performance indicators are adopted. The performance indicators of the Performance Share Plans 2023-2025 and 2024-2026 are defined EBITDA targets with a weight of 60 percent and net sales targets with a weight of 40 percent. For the Plan 2025-2027 the first performance indicator is the EBITDA, and its weight is 70 percent. The second performance indicator is the net sales target, with a weight of 30 percent.

The earning period of the Plan 2022-2024 has ended and any rewards based on performance measures will be paid after the completion of the financial statements in spring 2025, provided that the performance targets set by the Board of Directors are met.

The company’s Board of Directors decides separately when each plan commences, the length of its earnings period, the performance targets, the persons entitled to participate in the plan and the earnings opportunity.

In addition to the performance-based share reward system, which is based on the value and growth of the share, the company’s Board of Directors has established a conditional share reward system (Resticted Share Program "RSP") as a complementary long-term share-based incentive system. The program consists of individual programs that start annually, and there are currently three programs decided by the Board, covering the years 2023-2025, 2024-2026 and 2025-2027. Allocations have been made to participants for the program 2023-2025, but from the programs 2024-2026 and 2025-2027 no share allocations have been made. The earning period of the plan 2022-2024 has ended and payments will be made during 2025 in accordance with the plan rules. The first earning period of the plan 2023-2025 for the years 2023-2024 has also ended and will be paid out in 2025 in accordance with the plan rules.

The rewards payable based on the Performance Share Plan and on the Restricted Share Program will at the company’s choice either be paid in listed shares of Raute or in cash based on the value of the share reward at the time of payment. The payment of the reward is conditional on the individual’s continued employment or service relationship with Raute.

In accordance with the ownership recommendation of the company abides by, the members of the company’s Executive Board are expected to accrue and, after attaining, to retain in their ownership an amount of the company’s shares that equals, for the CEO, his/her gross annual fixed salary, and for the other Executive Board members, their six months’ gross fixed salary. The members of the Executive Board are expected to use 50 per cent of the net bonus he/she receives from the plan to accrue his/her share ownership until such ownership meets the recommended level.

 

Expired option schemes and share-based incentive programs