Share-based Incentive Plans
REMUNERATION OF THE PRESIDENT AND CEO
Application of Performance Criteria in 2021
In 2021, the President and CEO Nicolas Cederström Warchalowski was offered a performance-based short-term incentive. The short- term incentive scheme may be based on the result of the Group or other criteria decided by the Board. The objective of the long-term incentive scheme is to encourage the President and CEO to manage the Company over a long period of time in order to achieve the targets and strategy set by the Company, promoting the Company’s long-term financial success and competitiveness.
For short-term incentive 2021, net sales, profitability, inventory, balance sheet and strategy execution were set as the performance criteria, and the maximum earning opportunity for the President and CEO was set at EUR 240 000. Based on the criteria achievement, the total outcome of the short-term incentive in 2021 did lead to an full earned reward of EUR 240 000. The reward is due payment in 2022.
The President and CEO’s Share-Based Incentives in 2021
Two new share-based incentive plans have been established in 2021 covering the President and CEO. The aim of the plans is to align the objectives of the shareholders and the plan participants for increasing the value of the company in the long-term, to retain the participants at the company and to offer them competitive incentive schemes that are based on earning and accumulating shares.
Matching Share Plan 2021–2023 for the President and CEO
The President and CEO’s Matching Share Plan 2021–2023 consists of one matching period, covering the financial years of 2021–2023. President and CEO is given an opportunity to receive matching shares for his personal investment in Rapala VMC shares. The reward based on the plan will be paid after the end of the matching period. The reward will be paid partly in Rapala VMC shares and partly in cash. The reward to be paid correspond to the value of a maximum total of 28 800 Rapala VMC shares, including also the proportion to be paid in cash.
Performance Share Plan 2021–2023 for Key Employees
The key employees’ Performance Share Plan includes one three-year performance period, covering the financial years 2021–2023. The rewards to be paid on the basis of the plan correspond to the value of an approximate maximum total of 800 000 Rapala VMC shares including also the proportion to be paid in cash. The potential rewards from the performance period 2021–2023 will be paid partly in the Company’s shares and partly in cash in 2024.
The potential reward from the performance period will be based on the Rapala VMC’s financial performance criteria and the Company’s share price criterion which will be measured during 2023. The financial performance criteria for the performance period are the Rapala VMC group product sales, the Company’s comparable earnings before interest and taxes (comparable EBIT) and the Rapala VMC’s average working capital ratio in 2023.
Allocation of the potential rewards for the President and CEO correspond to the value of an approximate maximum total of 120 000 Rapala VMC shares also including the proportion to be paid in cash.