#Finland #Espoo #Valmet Oyj #Performance Share Plan #ESG Index

Valmet Oyj Introduces Long-Term Incentive Plans for Employees

In a significant move aimed at strengthening shareholder-employee alignment, Valmet Oyj's Board of Directors has approved the establishment of a long-term share-based incentive plan specifically designed for key employees. This initiative, known as the Performance Share Plan (PSP), is set to motivate executives and select key personnel to achieve strategic goals while boosting the company's value over the long run.

Goals and Structure of the PSP

The primary objective of the PSP is to synchronize the interests of employees with those of Valmet’s shareholders, thereby enhancing the overall company value. This plan fosters both retention and commitment among executives, allowing key personnel to earn rewards by directly linking their performance to company growth.

According to the PSP structure, performance share plans will commence annually, each covering a three-year period. During this timeframe, participants will have the opportunity to earn shares based on the achievement of specific performance metrics. For the upcoming plan, which will span from 2025 to 2027, the performance measures will include Comparable EBITA, growth in organic orders received for the company's core business areas, and performance against an ESG (Environmental, Social, and Governance) Index. This mixed approach reflects Valmet's commitment to addressing climate change and fostering a circular economy.

Distribution and Potential Rewards

The Performance Share Plan is targeted at the members of Valmet's Executive Team and approximately 200 other nominated key employees and management talents. The anticipated share rewards, which will be shared in spring 2028, represent a gross reward calculated before taxes. Participants must maintain their employment at Valmet until the payout date to qualify for any reward.

With a maximum issuance of around 652,940 shares under this incentive plan, the estimated total cost is projected to be approximately EUR 16 million. Additionally, the Board has also approved a Restricted Share Pool, allowing fixed share grants to be made to selected key employees for retention in special circumstances. This pool, commencing in 2025, will include 100,000 shares alongside any shares unallocated from the PSP.

Ownership Recommendations

A noteworthy component of both the Performance Share Plan and the Restricted Pool is the strong recommendation for executive team members to maintain ownership of company shares equivalent to their gross annual base salaries. This directive emphasizes the importance of having vested interests in the company's success, reinforcing a culture of accountability and commitment towards long-term growth.

Share Buy-Back Program

On December 18, 2024, the Board of Directors also resolved to initiate a share buy-back program under the authorized powers granted at the Annual General Meeting held earlier in March 2024. This program aims to facilitate the company's obligations arising from the new long-term incentive plans. Starting on February 13, 2025, and concluding no later than March 7, 2025, the company plans to repurchase a maximum of 115,000 shares, representing an estimated value of EUR 2.6 million based on the closing price on the day before the announcement.

Conclusion

Valmet Oyj continues to align its operational strategies with shareholder interests while investing in its talent. With a robust framework for long-term incentives in place, the company is poised to motivate its key employees effectively, fostering a collaborative environment dedicated to sustainable growth and operational excellence. As Valmet progresses, its commitment to balancing profit with corporate responsibility through ESG measures positions it as a forward-thinking leader in the process industries.