Metso’s board of directors have made resolutions relating the long-term incentive plans for its senior management; consisting of a Performance Share Plan (PSP), Restricted Share Plan (RSP) and a new Deferred Share Unit Plan (DSUP). These strategies are designed with the intention of aligning the interest of the company’s management with those of its shareholders. The commencement of each subsequent new plan will be subject to a separate approval by the board.
A new plan period for the PSP
The Board approved a commencement of a new plan period for the top management PSP, which was originally announced on December 10, 2014.
PSP 2018-2020 will commence at the beginning of 2018 and potential share rewards will be delivered in the first half of 2021 if the performance targets set by the Board are achieved.
The potential share reward payable under the PSP 2018-2020 is based on the total shareholder return of Metso’s share during calendar years 2018-2020. The plan includes 11 executives belonging to Metso top management and will comprise a maximum of 160,000 reward shares (gross before the deduction of applicable payroll tax).
A new plan period for the RSP
Additionally, the board also approved a new plan period for the complementary RSP structure. Metso originally announced the establishment of the plan arrangement on December 10, 2014.
RSP 2018-2020, will begin at the start of 2018 and potential share rewards will be delivered in the spring 2021.
The maximum number of share rewards that may be allocated and delivered within the RSP 2018-2020 totals 50,000 shares (gross before the deduction of applicable payroll tax).
A new DSUP for management
Metso’s board of directors have decided to establish a new long-term performance and share value-based incentive plan, DSUP, targeted for the company’s management. Employees selected as eligible to participate in the PSP may not participate in the this plan during the same year.
DSUP consists of annually commencing individual three-year plans. This initiative rewards its participants for individual and company level performance during a one-year performance period and the final value of the potential reward will depend on Metso’s share price development during a two-year share price performance period.
This first plan for the years 2018-2020 will commence at the beginning of next year and potential rewards will be paid in cash in the spring 2021, if the performance targets set by the board are achieved. It may include approximately 120 participants.
Commencement of each subsequent new plan will be subject to a separate approval by the Board of Directors.
The maximum amount of rewards payable based on the first plan for the years 2018-2020, based on the average price of the Metso share on December 13, 2017, is approximately €9 million (gross before the deduction of applicable payroll tax). The final value of this individual plan will depend both on the achievement of the performance targets set by the board of directors for 2018 and the development of Metso’s share price during 2019-2020.