Share-based incentive plans

The Group has one share-based incentive plans in force for key persons of the Group that commenced in 2019.

 

The plan that commenced in 2016 and ended in 2019 included earning periods and the Board of Directors annually decided on the beginning and duration of the earning periods in 2016, 2017 and 2018. The Board of Directors decided on the earning criteria and targets to be established for them at the beginning of each earning period. Two earning periods, calendar year 2016 and calendar years 2016-2018, commenced upon implementation of the plan. Two earning periods, calendar year 2017 and calendar years 2017-2019, commenced in 2017. Two earning periods, calendar year 2018 and calendar years 2018-2020, commenced in 2018. The reward under the plan for the earning periods 2016, 2017 and 2018 was based on the Orion Group's operating profit and for the earning periods 2016-2018, 2017-2019 and 2018-2020 on the total return on Orion Corporation B shares.

The target group of the plan consisted of no more than 50 people. The total maximum amount of rewards to be paid based on the plan is 500,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares. By 31 December 2020, a total of 216,659 Orion Corporation B shares had been paid as rewards under this plan.

Under the plan, shares received based on one-year earning periods cannot be transferred during the restricted period determined in the plan. There is no restricted period for the three-year earning periods. The value of reward to be paid based on the plans during one calendar year is a key person's gross annual salary multiplied by 1.75, in the maximum, at the date of the reward payment.

The key terms of the 2016 incentive plan are provided in a stock exchange release dated 2 February 2016.

The plan that commenced in 2019 includes five earning periods, which are the calendar years 2019, 2019-2020, 2019-2021, 2020-2022 and 2021-2023. The Board of Directors decides on the earnings criteria and on targets to be established for them at the beginning of each earning period. Three earning periods, calendar year 2019, calendar years 2019-2020 and 2019-2021, commenced upon implementation of the plan. One earning period, calendar years 2020-2022, commenced in 2020. One earning period, calendar years 2021-2023, commenced in 2021. The potential reward of the plan for the earning periods commencing in 2019, 2020 and 2021 are based on achieving the Orion Group's operating profit and net sales targets.

The target group of the plan consists of approximately 50 people. The total maximum amount of rewards to be paid on the basis of the plan is 700,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares. The total maximum amount includes a separate, so called reward for commitment part that the Board of Directors can use by a separate decision during the years 2019-2023. The maximum amount of the reward for commitment is no more than 100,000 shares and a cash payment corresponding to the value of the shares. By 31 December 2020, a total of 58,661 B shares had been paid as rewards under this plan.

Under the plan, shares received based on one-year and two-year earning periods cannot be transferred during the restricted period determined in the plan. There is no restriction period for the three year earning periods. The Board of Directors may decide to decrease the rewards to be paid to a key person from the plan in force if the limits set for the Orion Group long-term incentive plan rewards for one calendar year are exceeded. Remuneration paid to key person is decreased as follows if the set limits are exceeded:

  • if the value of the total reward exceeds the value of the Gross Annual Salary multiplied by 2 of the key person at the time of payment of the reward, the excess part of the reward is reduced by 50%, and
  • if the value of the total reward exceeds the value of the Gross Annual Salary mutiplied by 2.5 of the key person at the time of payment of the reward, the excess part shall not be paid.

The key terms of the 2019 incentive plan are provided in a stock exchange release dated 6 February 2019.

 

Under plan that commenced 2019 for the earning periods currently in effect, the dates when the restricted periods end are shown in the table below.

Earning periods currently in effect

2021-2023
2020-2022 2019 2019-2020

2019-2021

Start date of earning period

1 Jan 2021

1 Jan 2020

1 Jan 2019

1 Jan 2019

1 Jan 2019

End date of earning period

31 Dec 2023

31 Dec 2022

31 Dec 2019

31 Dec 2020

31 Dec 2021

End date of restricted period

31 Dec 2021  31 Dec 2021  
Grant date of share rewards 3 Mar 2021 17 Mar 2020 27 Mar 2019 27 Mar 2019 27 Mar 2019

Fair value of shares at granting, EUR

33.58 32.51 32.99 32.99 32.99

The rewards under the plans shall be paid partly in the form of the Company’s B shares and partly in cash. Rewards under the plans have been paid and potential future rewards under the plans, that commenced in 2016 and 2019, shall be paid as follows:

Earning period

Reward paid / 
potential reward to be paid

2016

1 March 2017

2017

1 March 2018

2016-2018

1 March 2019

2018

1 March 2019

2017-2019

2 March 2020

2018-2020

1 March 2021

2019

2 March 2020

2019-2020

1 March 2021

2019-2021

2022

2020-2022

2023

2021-2023

2024

 

Authorisations of the Board of Directors concerning remuneration

The Board of Directors has an authorisation confirmed by the Annual General Meeting held on 26 March 2019 to decide on a share issue in which shares held by the Company can be conveyed in a targeted issue as part of the Company's incentive system. The terms of the authorisation have been published in a stock exchange release on 26 March 2019.