The aim of Caverion’s long-term incentive schemes is to align the interests of Caverion’s shareholders and the executives in order to promote shareholder value creation and to support Caverion’s long-term financial success. In addition, the aim is to commit the executives and key personnel to the company and its strategic targets and to offer them a competitive reward plan based on the ownership of the company’s shares.
Long-term incentive schemes are determined by the Board of Directors and they are part of the remuneration of the management and key personnel of Caverion Group.
Caverion's Board of Directors approved a share-based long-term incentive plan 2016-2018 in its December 2015 meeting. The plan consists of a Performance Share Plan (PSP) as the main structure supported by a Restricted Share Plan (RSP) as a complementary structure for specific situations. Both plans consist of annually commencing individual plans, each with a three-year period. The commencement of each new plan is subject to a separate decision of the Board.
Caverion's Board of Directors approved the establishment of a new share-based long-term incentive plan for key employees of the Group in its December 2018 meeting. The new plan is based on a Performance Share Plan (PSP) structure consisting of annually commencing individual plans, each with a three-year period. The commencement of each new plan is subject to a separate decision of the Board.
Caverion’s Board of Directors resolved to implement a new share-based long-term incentive plan “Matching Share Plan 2018-2022” in its February 2018 meeting. The aim of the plan is to align the objectives of the shareholders and the key employees in order to increase the value of the company in the long-term, to encourage the key employees to personally invest in the company’s shares, to retain them at the company, and to offer them a competitive reward plan that is based on acquiring, receiving, holding and owning the company’s shares.
The prerequisite for participating in the Plan is that a key employee shall acquire and hold company shares up to the number and in the manner determined by the Board of Directors. The Plan includes four matching periods, all beginning on 1 March 2018 and ending on 28 February 2019, 29 February 2020, 28 February 2021 or 28 February 2022. The rewards from the plan will be paid in four instalments, one instalment each in 2019, 2020, 2021 and 2022. However, the reward payment will be deferred, if a yield of the share has not reached the pre-set minimum yield level by the end of the matching period in question. If the pre-set minimum yield level has not been reached by the end of reward instalment specific grace periods ending in 2021-2022, no reward from a matching period in question will be paid.
The Board of Directors has in December 2022 decided to supplement the terms of the MSP. Notwithstanding the Grace Period for the fourth instalment terminating on 31 December 2022, the Board maintained full discretion to resolve on any partial or full payout under the fourth instalment under certain conditions
Caverion applies a share ownership recommendation policy for the members of the Group Management Board, according to which the members should retain at least 50 per cent of the share rewards received (net shares after the deduction of applicable payroll tax) under the share based incentive plans until the share ownership of these individuals in Caverion amounts to at least his/her annual gross base salary.