Board of Directors of Ahlstrom-Munksjö decided on a new long-term share-based incentive plan
AHLSTROM-MUNKSJÖ OYJ, STOCK EXCHANGE RELEASE, OCTOBER 24, at 18:30 p.m. CEST
Ahlstrom-Munksjö’s Board of Directors has decided to establish a new long-term share-based incentive plan for the key personnel of the company. The aim of the plan is to align the objectives of the company's owners and key personnel to increase the company's value and to commit key personnel to the company through an incentive system based on ownership of Ahlstrom-Munksjö shares.
The Board of Directors has, in addition, decided to establish a bridge plan to cover the gap in the long-term incentive plan structure, which results from the implemented merger of the two companies and the related transition to the new plan structure herein announced. The bridge plan covers the most critical leadership resources of Ahlstrom-Munksjö.
The main long-term incentive plan structure
The plan includes a rolling structure of individual performance share plans, each with a three-year performance period. The first performance period will start as of 2017. The commencement of any further plan periods is subject to the Board’s annual decision. The performance criteria for the 2017-2019 performance period will be the Total Shareholder Return (TSR) including share price change and profit distribution during the performance period. Additionally, no reward will be paid in case an underlying EBITDA requirement is not met.
The Board of Directors has nominated approximately 65 key persons as eligible to participate in the first plan 2017-2019.
The potential reward for the first plan will be paid in 2020. The reward will at the company’s choice either be paid in the form of company shares or in cash.
If the targets set for the 2017-2019 performance period of the plan are met, the estimated aggregate gross value of the rewards to be paid will be approximately EUR 3.4 million or, as an estimate, approximately 193,000 Ahlstrom-Munksjö shares, when calculated based on the trade volume weighted average quotation of the share of Ahlstrom-Munksjö during the month of September 2017. Should the maximum level of performance criteria be achieved, the estimated maximum gross value of shares to be paid will be approximately EUR 6.9 million or, as an estimate, approximately 385,000 Ahlstrom-Munksjö shares, when calculated based on the above-mentioned average quotation of the share during the month of September 2017.
The attained reward represents a gross earning, from which the applicable payroll tax is withheld and the remaining net value is delivered to the participants.
The bridge plan structure
The bridge plan is a one-off plan with an overall plan period of three years.
The bridge plan includes one performance period comprising the years 2017-2018.
The potential reward payable under the bridge plan will be paid in the spring 2019 if the performance targets set by the Board for the bridge plan are achieved. The payment of the reward is followed by a one-year restriction period, comprising the year 2019. The potentially paid reward is at the participants’ disposal after the lapse of the restriction period.
The reward under the bridge plan will at the company’s choice either be paid in the form of company shares or in cash.
The performance criteria applied to the bridge plan are the same as those applied to the main plan structure. Similarly with the main plan no reward will be paid in case an underlying EBITDA requirement is not met.
The Board of Directors has nominated approximately 20 key persons belonging to the most critical leadership resources of Ahlstrom-Munksjö as eligible to participate in the bridge plan.
If the targets set for the 2017-2018 performance period of the bridge plan are met, the estimated aggregate gross value of the rewards to be paid will be approximately EUR 2.0 million or, as an estimate, approximately 115,000 Ahlstrom-Munksjö shares, when calculated based on the trade volume weighted average quotation of the share of Ahlstrom-Munksjö during the month of September 2017. Should the maximum level of performance criteria be achieved, the estimated maximum gross value of shares to be paid will be approximately EUR 4.1 million or, as an estimate, approximately 230,000 Ahlstrom-Munksjö shares, when calculated based on the above-mentioned average quotation of the share during the month of September 2017.
The attained reward represents a gross earning, from which the applicable payroll tax is withheld and the remaining net value is delivered to the participants.
Other terms
All members of the Management Team shall accumulate and, once achieved, maintain a level of share ownership corresponding to their annual gross base salary. The members of the Management Team are expected to use at least fifty per cent of the net reward received under the long-term incentive plans for accumulating their share ownership until the above share ownership level has been achieved.
For further information, please contact:
Anna Selberg, EVP Communications, tel. +46 703 23 10 32, anna.selberg@ahlstrom-munksjo.com
Ahlstrom-Munksjö in brief
Ahlstrom-Munksjö is a global leader in fiber-based materials, supplying innovative and sustainable solutions to customers worldwide. Our offerings include decor paper, filter media, release liners, abrasive backings, nonwovens, electrotechnical paper, glass fiber materials, food packaging and labeling, tape, medical fiber materials and solutions for diagnostics. Combined annual net sales are about EUR 2.15 billion and we employ 6,000 people. The Ahlstrom-Munksjö share is listed on the Nasdaq Helsinki and Stockholm. The company was formed on April 1, 2017 through the merger of Ahlstrom Corporation and Munksjö Oyj. Read more at www.ahlstrom-munksjo.com.