Stock Exchange Release
15 December 2015 at 09.00 am (EET)
The Board of Directors of Neste Corporation resolved on key personnel long-term incentive
The Board of Directors of Neste Corporation has resolved to establish a new long-term incentive directed to the Group key personnel (the LTI). The aim of the LTI is to align the objectives of the shareholders and the key personnel in order to increase the value of the Company in the long-term, to retain the key personnel in the Company, and to offer them a competitive and fair reward plan based on earning and accumulating the Company's shares.
The LTI program consists of three performance share plans, PSP 2016-2018, PSP 2017-2019 and PSP 2018-2020, each with a three-year performance period and a 36-month lock-up period commencing from a performance period's reward payment. The Board has decided on target group, allocations, and performance criteria for the PSP 2016-2018.
Approximately 100 key persons, including the members of the Neste Executive Board (the NEB), belong to the target group of the PSP 2016-2018.
The potential reward from the performance period 2016-2018 will be based on the the Group's cumulative comparable Free Cash Flow (FCF) and the Company share's relative Total Shareholder Return (TSR). The rewards to be paid on the basis of the performance period 2016-2018 correspond to the value of an approximate maximum total of 273,000 Neste Corporation shares (including also the proportion to be paid in cash).
The potential reward from the performance period 2016-2018 will be paid partly in Neste shares and partly in cash in 2019. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to a key person. The shares paid as reward may not be transferred during the 36-month lock-up period. As a rule, no reward will be paid, if a key person's employment or service ends before the reward payment. If a key person's employment or service ends before the end of a lock-up period, the key person must, as a rule, return the shares paid as reward back to the Company.
The combined amount of rewards to be paid under the LTI and the annual short-term incentive plan may not exceed 120 per cent of the key person's gross annual fixed salary in any year.
The key persons must hold all shares given as reward on the basis of the entire LTI also after the lock-up periods, until the NEB member's shareholding in the Company in total equals the value of such member's gross annual fixed salary, and other key person's shareholding in the Company in total equals half of the value of such key person's gross annual fixed salary. Such number of shares must be held as long as the key person holds a position as a NEB member or as long as other key person's employment in a Group Company continues.
Chair of the Board
Jorma Eloranta, Chair of the Board, Tel. +358 10 458 4484
Hannele Jakosuo-Jansson, Senior Vice President, Human Resources and Safety, Tel. +358 10 458 4688
Neste in brief
Neste is a pioneer in oil refining and renewable solutions. We provide our customers with premium-quality products for cleaner traffic and industrial products based on world-class research. Our sustainable operations have received recognition in the Dow Jones Sustainability World Index and the Global 100 list of the world's most sustainable companies, among others. Our net sales for 2014 amounted to approximately EUR 15 billion, and our shares are listed on NASDAQ Helsinki. Cleaner traffic, energy and life are moved forward by about 5,000 professionals. More information: neste.com