Mandatum's long-term incentive scheme
Mandatum plc, Stock exchange release, 19 March 2024 at 1:20 p.m. EET
The Board of Directors of Mandatum plc has on 19.3.2024 decided to establish a new, performance- and share-based long-term incentive scheme (Performance Share Plan) for the Group Management Team (including the Group CEO) and selected key employees. The purpose of the long-term incentive scheme is to align the objectives of the shareholders and key employees in order to increase the company's shareholder value in the long term, to commit the key employees to implementing the company's strategy and to reward from excellent performance.
The Performance Share Plan consists of annually commencing individual share plans, each of which includes a three-year performance period and a potential share reward to be paid thereafter, taking into account any deferral and/or transfer restriction of rewards due to regulations applicable to Mandatum Group. The commencement of each individual plan within the Performance Share Plan structure is subject to a separate decision by Mandatum plc's Board of Directors.
The performance period of the first plan launched under the Performance Share Plan structure covers the financial years 2024–2026. In addition, the Board of Directors of Mandatum plc has decided on the establishment of a transition phase share-based incentive plan. Its purpose is to incentivise and commit the target group of the plan during the transition phase between Sampo plc's long-term incentive plan 2020 and Mandatum's first own share-based incentive plan. The performance period of the transition phase plan covers the financial years 2024–2025.
The target group for the performance period 2024–2025 consists of approximately 25 persons and that of the performance period 2024–2026 approximately 46 persons.
The payment of the reward based on the plans is conditional on the achievement of the performance targets set by the Board of Directors for the respective plan. The performance measures based on which the potential share rewards based on the plans will be paid are the absolute total shareholder return of the company's share ("Absolute TSR"), a profitability related measure (performance of Mandatum's capital light business) and a selected sustainability target.
The rewards potentially earned based on the incentive plans will be paid in Mandatum plc's shares. Mandatum is, however, entitled to pay the reward fully in cash in certain situations. If the employment or director contract ends before the reward payment, as a rule no reward will be paid. Mandatum applies a share ownership recommendation to the members of the Group Management Team (including the Group CEO), according to which each member of the Group Management Team is expected to retain in his/her ownership at least half of the shares received under the company’s share-based incentive plans until the value of his/her shareholding in the company corresponds to at least his/her gross annual base salary.
If all performance targets set for the performance period 2024–2025 are achieved in full, the aggregate maximum number of shares to be paid based on this respective plan is 1,363,000 Mandatum plc shares (referring to a gross amount of rewards from which the applicable payroll tax is withheld before share delivery). Correspondingly, the aggregate maximum number of shares to be paid based on the performance period 2024–2026 is 1,724,000 Mandatum plc shares (referring to a gross amount of rewards).
The Board of Directors has, in addition, decided to establish a Restricted Share Plan structure. It is intended to be used as a complementary share-based incentive and commitment program in specific situations, such as in case of new recruitments.
The Restricted Share Plan consists of annually commencing individual restricted share plans. Each plan includes a restriction period, which covers three calendar years in total, during which the company may grant fixed share rewards to individually selected key employees. The commencement of each individual plan within the Restricted Share Plan structure is subject to a separate decision by Mandatum plc's Board of Directors. The first plan within the Restricted Share Plan structure covers the financial years 2024–2026. The share rewards based on the plan will be paid to the participants in Mandatum plc shares. A prerequisite for the payment of the reward is that the employee's employment or director contract still continues at the time the reward is paid. The aggregate maximum number of shares to be paid based on the first plan of the Restricted Share Plan structure is 172,400 Mandatum plc shares (referring to a gross amount of rewards, from which the applicable payroll tax is withheld before share delivery).
The value of the rewards to be paid under the plans described above is limited by a pay cap linked to share price development.
Additional information
Lotta Borgström
VP, Investor Relations
Tel. +358 50 022 1027
lotta.borgstrom[a]mandatum.fi
Mandatum in brief
Mandatum is a major financial services provider that combines expertise in wealth management and life insurance. Mandatum offers clients a wide array of services covering asset and wealth management, savings and investment, compensation and rewards as well as pension plans and personal risk insurance. Mandatum offers services to corporate, retail, institutional and wealth management clients. At the centre of Mandatum's success are highly skilled personnel, a strong brand as well as a proven investment track record. mandatum.fi/en/group
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