Share-based incentive plans

The Group has two share-based incentive plans in force for key persons of the Group.

 

The plan that commenced in 2022 includes three earning periods, which are the calendar years 2022–2024, 2023–2025 and 2024–2026. The Board of Directors decides on the earnings criteria and on targets to be established for them at the beginning of each earning period. The potential reward of the plan for the earning period 2022–2024 is based on achieving the Orion Group’s operating profit and net sales targets.

The target group of the plan consists of approximately 60 people. The total maximum amount of rewards to be paid on the basis of the plan is 760,000 Orion Corporation class 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 2022–2026. 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.

There are no restriction periods in the plan, as the duration of each earning period is three years. The Board of Directors may decide to decrease the rewards to be paid to a key person if the limits set for the rewards to be paid from the plan 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 2.5 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 3 of the key person at the time of payment of the reward, the excess part shall not be paid.

The key terms of the 2022 incentive plan are provided in a stock exchange release dated 10 February 2022.

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 decided 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 2021, a total of 114,131 B shares had been paid as rewards under this plan.

Under the plan, shares received based on one-year and two-year earning periods could not 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 plans that commenced in 2019 and 2022 for the earning periods currently in effect, the details are shown in the table below.

Earning periods currently in effect

2022-2024
2021-2023
2020-2022 2019-2021

Start date of earning period

1 Jan 2022

1 Jan 2021

1 Jan 2020

1 Jan 2019

End date of earning period

31 Dec 2024

31 Dec 2023

31 Dec 2022

31 Dec 2021

End date of restricted period

Grant date of share rewards 22 Mar 2022 3 Mar 2021 17 Mar 2020 27 Mar 2019

Fair value of shares at granting, EUR

41.93 33.58 32.51 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 shall be paid as follows:

Earning period

Reward paid / 
potential reward to be paid

2019

2 March 2020

2019-2020

1 March 2021

2019-2021

1 March 2022

2020-2022

2023

2021-2023

2024

2022-2024 2025
2023-2025 2026
2024-2026 2027

 

Authorisations of the Board of Directors concerning remuneration

The Board of Directors has an authorisation confirmed by the Annual General Meeting held on 23 March 2022 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 23 March 2022.