UPM Unveils Comprehensive Share Incentive Plans for 2026-2029
In a significant move aimed at bolstering its employee engagement and aligning the interests of its staff with shareholders, UPM-Kymmene Corporation has unveiled a series of comprehensive share incentive plans starting in 2026. These initiatives, which include the Performance Share Arrangement, Deferred Bonus Arrangement, and Employee Share Savings Arrangement, are designed to motivate key personnel and enhance overall company performance.
This plan is specifically crafted for UPM's senior management, including the President and CEO and the Group Executive Team. Covering an earning period from 2026 to 2028, this arrangement emphasizes three primary performance indicators: total shareholder return, adjusted ROCE (Return on Capital Employed), and critical sustainability metrics. Notably, the sustainability measures target fossil CO2 emissions reductions, positive impacts on biodiversity within UPM's Finnish forestry operations, and the promotion of gender pay equity globally.
If all stipulated performance targets are achieved, UPM anticipates delivering around 1,306,000 shares over the incentive period to 346 participants. The shares will be issued from existing shares, thus preventing any dilution of equity.
In addition to the Performance Share Plan, UPM will implement a Deferred Bonus Arrangement for other key employees, which is based on the company’s EBITDA and the performance of individual business areas. This arrangement also includes a one-year earning period followed by a two-year restriction period. During this time, participants must remain employed to qualify for the incentives, fostering retention across the organization.
Targeted at key executives and used mainly as a tool for recruitment and retention, the Restricted Share Arrangement will span from 2026 to 2029. Participants can expect to receive rewards as the plan unfolds across four consecutive years. Similar to the other plans, these shares will also be issued from existing stock, ensuring that there is no dilution of UPM shares.
Furthering its commitment to employee engagement, UPM will also introduce an Employee Share Savings Arrangement between 2026 and 2029. This program allows employees to save a percentage of their salary to purchase UPM shares. For each two shares bought through this program, employees will receive one additional share as a bonus from the company.
Additionally, newly participating employees will benefit from ten free shares after the one-year savings period, incentivizing broader participation among staff. This initiative emphasizes not only the alignment of employee interests with that of the company but also fosters a sense of ownership among employees.
Participants in the savings plan will be subjected to a holding period with a maximum allowable savings cap of EUR 17.6 million, based on estimated employee participation.
These newly announced incentive plans are indicative of UPM's dedication to integrating sustainability with robust corporate performance. As the company continues to operate in a fast-evolving market, such strategic initiatives are crucial to not only attract but also retain top talent and maintain a competitive edge. The introduction of these share plans marks a notable commitment to employee welfare and reflects an understanding of the importance of fostering a strong company culture that values long-term growth and responsible governance.
In a landscape where corporate accountability is increasingly scrutinized, UPM's multifaceted approach positions it as a forward-thinking leader in material solutions, affirming its mission to renew everyday life sustainably.
Performance Share Arrangement
This plan is specifically crafted for UPM's senior management, including the President and CEO and the Group Executive Team. Covering an earning period from 2026 to 2028, this arrangement emphasizes three primary performance indicators: total shareholder return, adjusted ROCE (Return on Capital Employed), and critical sustainability metrics. Notably, the sustainability measures target fossil CO2 emissions reductions, positive impacts on biodiversity within UPM's Finnish forestry operations, and the promotion of gender pay equity globally.
If all stipulated performance targets are achieved, UPM anticipates delivering around 1,306,000 shares over the incentive period to 346 participants. The shares will be issued from existing shares, thus preventing any dilution of equity.
Deferred Bonus Arrangement
In addition to the Performance Share Plan, UPM will implement a Deferred Bonus Arrangement for other key employees, which is based on the company’s EBITDA and the performance of individual business areas. This arrangement also includes a one-year earning period followed by a two-year restriction period. During this time, participants must remain employed to qualify for the incentives, fostering retention across the organization.
Restricted Share Arrangement
Targeted at key executives and used mainly as a tool for recruitment and retention, the Restricted Share Arrangement will span from 2026 to 2029. Participants can expect to receive rewards as the plan unfolds across four consecutive years. Similar to the other plans, these shares will also be issued from existing stock, ensuring that there is no dilution of UPM shares.
Employee Share Savings Arrangement
Furthering its commitment to employee engagement, UPM will also introduce an Employee Share Savings Arrangement between 2026 and 2029. This program allows employees to save a percentage of their salary to purchase UPM shares. For each two shares bought through this program, employees will receive one additional share as a bonus from the company.
Additionally, newly participating employees will benefit from ten free shares after the one-year savings period, incentivizing broader participation among staff. This initiative emphasizes not only the alignment of employee interests with that of the company but also fosters a sense of ownership among employees.
Participants in the savings plan will be subjected to a holding period with a maximum allowable savings cap of EUR 17.6 million, based on estimated employee participation.
Conclusion
These newly announced incentive plans are indicative of UPM's dedication to integrating sustainability with robust corporate performance. As the company continues to operate in a fast-evolving market, such strategic initiatives are crucial to not only attract but also retain top talent and maintain a competitive edge. The introduction of these share plans marks a notable commitment to employee welfare and reflects an understanding of the importance of fostering a strong company culture that values long-term growth and responsible governance.
In a landscape where corporate accountability is increasingly scrutinized, UPM's multifaceted approach positions it as a forward-thinking leader in material solutions, affirming its mission to renew everyday life sustainably.
Topics General Business）
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