The objectives are to reward key personnel for good performance and thereby support Outokumpu’s strategy, and to direct management attention towards 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. Outokumpu's share-based programs consist of the Performance Share Plan (PSP) and Restricted Share Pool (RSP).
Outokumpu has currently no active stock option programs.
Performance Share Plan and Restricted Share Pool
The Performance Share Plan includes an earning criterion and has a maximum number of participants for each plan of 150. It is part of the regular compensation of top executives. Earning criteria for current plan periods are given in the table below.
The Restricted Share Pool does not have any specific earning criteria and it is used for a limited number of employees, for key recruitments, exceptional performance, high potential, retention need and other individual specific situations.
Outokumpu has currently three ongoing plan periods for the Performance Share Plan and Restricted Share Pool: 2020–2022, 2021–2023 and 2022–2024, Performance Share Plan and Restricted Share Pool. In December 2022, Outokumpu announced the commencement of its next plan period for both programs for 2023–2025, to commence at the beginning of 2023.
The share rewards will be delivered in next spring after the end of each plan period if the employment conditions and performance criterion is met. Upon delivery, applicable taxes will be deducted from gross shares, and the remaining net value will be paid to the participants in Outokumpu shares.
The tables below include the participants, maximum number of gross shares and earning criteria of the ongoing share plans as well as the latest ended plan and the plan commencing next year.
|Performance share plans||2019–2021||2020–2022||2021–2023||2022–2024||2023–2025|
|Number of participants||96||111||113||109||max 200|
|Maximum number of gross shares to be paid||1,991,738||2,903,702||3,700,000||3,700,000||3,700,000|
|Earning criteria||Return on operating capital compared to a peer group||Return on operating capital compared to a peer group||Return on capital employed as an absolute measure||Return on capital employed (80%) CO2 emissions per ton of crude steel produced (20%)||Return on capital employed (80%) and CO2 emissions per ton of crude steel produced (20%)|
|Share delivery year||2022||2023||2024||2025||2026|
|Restricted Share Pool||2019–2021||2020–2022||2021–2023||2022–2024||2023–2025|
|Number of participants||56||35||62||65||*|
|Maximum number of gross shares to be paid||194,200||161,900||250,000||500,000**||250,000|
|Share delivery year||2022||2023||2022, 2023, 2024||2023, 2024 2025||2024, 2025, 2026|
*) Number of participants to be confirmed later on.
**) The Restricted Share Plan (RSP) 2022–2024 includes a one time increase of share budget to maximum 500,000 gross shares to cater for an extra retention plan for up to 5–6 selected management positions with highest retention risk.
The members of Outokumpu’s Leadership Team, including the CEO, are expected to own Outokumpu shares received under the company’s share-based incentive programs corresponding to the value of their annual gross base salary. Half of the net shares received from the share-based incentive programs must be used to fulfil this ownership requirement.
Latest share rewards in the spring of 2022
Outokumpu’s Board of Directors has approved the share rewards in Outokumpu’s share-based incentive program, Restricted Share Pool. The total number of shares will be delivered to the participants of the Restricted Share Pool’s following plan periods by the end of April 2022:
• RSP 2019–2021: the number of gross shares is 151,000
• RSP 2021–2023: the number of gross shares is 75,532 (the first instalment of three)
Outokumpu will use its treasury shares for the reward payments, which means that the total number of shares of the company will not change.
For the Performance Share Plan 2019–2021, the targets were not met, and therefore, no share rewards were paid to the participants.
For more information on the previous and ongoing share plans, please check our Remuneration statements.