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). In addition, Outokumpu has the Matching Share Plan for the management.
Outokumpu has currently no active stock option programs.
Performance Share Plan and Restricted Share Pool
The earning criteria of the Performance Share Plans measures Outokumpu's profitability and the efficiency with which its capital is employed compared to a peer group. The maximum number of participants for each plan are 150 key employees. The Restricted Share Plan, not having any specific earning criteria, is used for a limited number of employees, i.e. key recruitments, exceptional performance, high potential, when retention need, other individual specific situations.
Current plan periods
The Board of Directors has approved the commencement of Outokumpu’s share-based programs for the periods 2018–2020, 2019–2021 and 2020–2022, Performance Share Plan and Restricted Share Pool. The plans have three years' vesting period. The objective of the programs is to reward selected employees for good performance which supports Outokumpu's strategy, to engage them and to form part of a competitive compensation package.
The share rewards will be distributed in spring after the vesting periods, if the employment conditions and performance criterion are met. Applicable taxes will be deducted from gross shares, and the remaining net value will be delivered to the participants in Outokumpu shares.
Matching Share Plan
The Board of Directors of Outokumpu established in 2016 a Matching Share Plan program for key management for the years 2016–2020 to emphasize shareholder value creation, enforce an ownership culture and to incentivize the achievement of the 2020 vision.
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 the applicable taxes will be deducted and the remaining net number of shares will be delivered to the participant. The matching shares are delivered in four instalments at the end of 2017, 2018, 2019 and the final being delivered in 2020. To receive the matching shares, the participants are required to keep all of the shares they have acquired until the vesting of each matching share tranche. Outokumpu uses its treasury shares for the reward payments, so the total number of shares of the company will not change.
Paid incentives and status of share plans
For information on the paid incentives and the status of the ongoing share plans, please check our Remuneration statements.