Share-based incentive programs

Outokumpu’s Board of Directors has confirmed that sharebased incentive programs are part of the incentive and commitment scheme for the company’s key personnel. The objectives are to reward key personnel for good performance and thereby support Outokumpu’s strategy, as well as to direct management attention toward increasing Outokumpu’s profitability and shareholder value. The programs offer the possibility of receiving Outokumpu shares as an incentive, provided that the criteria set by the Board for each earnings period are fulfilled.

For the 2018 financial year, the performance-based short-term incentive payable to the members of the Leadership Team in addition to their base salary and employee benefits will be based on the achievement of EBITDA, occupational safety, delivery performance and individual objectives. The maximum incentive payment varies between 50% and 100% of the annual base salary in line with local market practices for similar positions.

No separate remuneration is paid to the members of the Leadership Team for membership of the Group’s internal governing bodies.

Matching Share Plan for key management

In April 2016 the Board of Directors of Outokumpu approved the establishment of a Matching Share Plan program for key management for years 2016–2020.

According to the plan, the participants have invested an amount corresponding to 30–120% of their annual gross base salary into Outokumpu shares. Outokumpu will match each share acquired by the participant with two gross shares from which applicable taxes will be deducted and the remaining net number of shares will be delivered to the participant. The matching shares will be delivered in four equal instalments in the end of 2017, 2018, 2019 and 2020, respectively. In order to receive the matching shares, the participants are required to keep all the shares they have acquired until the vesting of each matching share tranche.

 2018 share rewards in Matching Share Plans

The Board of Directors has approved the delivery of the second reward from the Matching Share Plan for Management and third reward to the CEO by the end of December 2018. After deduction for applicable taxes, the total net number of shares delivered will be 466,135, of which 185,077 will be delivered to the CEO. Outokumpu will use its treasury shares for the reward payments, so the total number of shares of the company will not change.

Pension benefits and terms of service

The service contract of CFO de la Camp, who is also deputy to the CEO, can be terminated by both parties with six months’ notice. To the extent that the service contract would be terminated by the company, other than for a cause without notice or with an ordinary notice due to misconduct, the CFO would receive additional compensation equivalent to 12 months’ salary.

For the other members of the Leadership Team, the notice period is six months for the employee and either twelve months for the company, without additional severance compensation and with the possibility to stop salary payment during the notice period if the executive finds other employment before the end of the notice period, or 18 months’ base salary at the maximum, including salary for the notice period and severance compensation.

The retirement age for the members of the Leadership Team is 63 or 65 years, depending on the country of employment and date of appointment, and they participate in the local retirement programs applicable to employees in the country where their employing company is located.

The members employed in Germany are entitled to pension benefits in accordance with the rules of the German Essener Verband. The members employed in Finland participate in the Finnish TyEL pension system, in addition to which they are entitled to a defined contribution pension plan for which the maximum premium is 25% of an individual’s annual earnings, excluding share rewards.

The pension benefits of the other Leadership Team members vary in line with the local market practices.  

All Outokumpu share-based incentive programs

¹⁾ Gross, including the value of the shares on the day of delivery and taxes..
²⁾ Erkkilä Jan 1–31, 2017; Tahvanainen Jan 1–February 28, 2017 and Kaukiainen March 1–Dec 31, 2017.

Outokumpu publishes all manager transactions as stock exchange releases per MAR regulation. The table above is updated based on the stock exchange releases.