Long-term incen­tive sche­mes

Long-term incen­tive sche­mes

LONG-TERM INCENTIVE SCHEME 2024 

 

The Board of Directors of Mandatum plc has on 19.3.2024 decided to establish a new, performance- and share-based long-term incentive scheme (Performance Share Plan) for the Group Management Team (including the Group CEO) and selected key employees. The purpose of the long-term incentive scheme is to align the objectives of the shareholders and key employees in order to increase the company's shareholder value in the long term, to commit the key employees to implementing the company's strategy and to reward from excellent performance. 

The Performance Share Plan consists of annually commencing individual share plans, each of which includes a three-year performance period and a potential share reward to be paid thereafter, taking into account any deferral and/or transfer restriction of rewards due to regulations applicable to Mandatum Group. The commencement of each individual plan within the Performance Share Plan structure is subject to a separate decision by Mandatum plc's Board of Directors. 

The performance period of the first plan launched under the Performance Share Plan structure covers the financial years 2024–2026. In addition, the Board of Directors of Mandatum plc has decided on the establishment of a transition phase share-based incentive plan. Its purpose is to incentivise and commit the target group of the plan during the transition phase between Sampo plc's long-term incentive plan 2020 and Mandatum's first own share-based incentive plan. The performance period of the transition phase plan covers the financial years 2024–2025. 

The payment of the reward based on the plans is conditional on the achievement of the performance targets set by the Board of Directors for the respective plan. The performance measures based on which the potential share rewards based on the above-mentioned first plans will be paid are the absolute total shareholder return of the company's share ("Absolute TSR"), a profitability related measure (performance of Mandatum's capital light business) and a selected sustainability target. 

The rewards potentially earned based on the incentive plans will be paid in Mandatum plc's shares. Mandatum is, however, entitled to pay the reward fully in cash in certain situations. Mandatum applies a share ownership recommendation to the members of the Group Management Team (including the Group CEO), according to which each member of the Group Management Team is expected to retain in his/her ownership at least half of the shares received under the company’s share-based incentive plans until the value of his/her shareholding in the company corresponds to at least his/her gross annual base salary. 

Information on the long-term incentive scheme 2024

 

Bridge Plan 2024-2025 

Performance Share Plan 2024-2026 

Maximum number of shares paid as remuneration* 

1,363,000 

1,724,000 

of which to Group Management Team members, excluding the Group CEO 

350,000 

445,000 

of which to Group CEO 

260,000 

260,000 

*Total amount of rewards if all the performance targets set for the plan are achieved in full (referring to a gross amount of rewards from which the applicable payroll tax is withheld before share delivery). 

 

The Board of Directors has, in addition, on 19.3.2024 decided to establish a Restricted Share Plan structure. It is intended to be used as a complementary share-based incentive and commitment program in specific situations, such as in case of new recruitments. 

The Restricted Share Plan consists of annually commencing individual restricted share plans. Each plan includes a restriction period, which covers three calendar years in total, during which the company may grant fixed share rewards to individually selected key employees. The commencement of each individual plan within the Restricted Share Plan structure is subject to a separate decision by Mandatum plc's Board of Directors. The first plan within the Restricted Share Plan structure covers the financial years 2024–2026. The share rewards based on the plan will be paid to the participants in Mandatum plc shares. The aggregate maximum number of shares to be paid based on the first plan of the Restricted Share Plan structure is 172,400 Mandatum plc shares (referring to a gross amount of rewards, from which the applicable payroll tax is withheld before share delivery). 

The value of the rewards to be paid under the plans described above is limited by a pay cap linked to share price development. 

 

LONG-TERM INCENTIVE SCHEME 2020

 

Following the partial demerger of Sampo plc, effective as of 1 October 2023 (the ”Demerger”) and the listing of Mandatum plc’s share in Nasdaq Helsinki, Mandatum plc’s Board of Directors has decided that Mandatum Group’s key employees and the Group CEO shall remain in Sampo’s long-term incentive scheme 2020, based on the decision of Sampo plc’s Board of Directors, to ensure retention of the key employees. The incentive scheme was launched in August 2020 and terms were amended by Sampo due to the Demerger in September 2023.

The incentive units have been allocated in three allocations, of which the first was in 2020 (2020:1) and the following allocations were in 2021 (2020:1/2) and 2022 (2020:1/3). The potential incentive reward will be paid in three annual installments. The first installment of the first allocation (2020:1) has been paid out in September 2023, prior to the Demerger. The following installments will vest in 2024 and 2025. The incentive rewards from second allocation (2020:1/2) and third allocation (2020:1/3) will vest in 2024-2026 and 2025-2027 respectively.

In the long-term incentive scheme for key employees at Sampo Group, the payout is determined based on the development of the Sampo A share price and Mandatum plc's share price as well as the paid dividends. A deferral rule applies to incentive rewards paid to the key employees who were subject to the deferral rule in accordance with the remuneration policies of the relevant Mandatum Group companies in force at the launch of this incentive scheme. The key employees subject to the deferral rule, including the Group CEO and Group Management Team members, are obliged to purchase Sampo A shares with 50 per cent of each instalment after deducting income tax and other comparable charges. The shares are subject to a disposal restriction for three years, after which the Board shall decide whether the shares will be released. 

Information on the long-term incentive schemes

 

Scheme

2020:1

2020:1/2

2020:1/3

Allocated incentive units (pcs)*

488,250

20,000

50,000

of which to Group Management Team members, excluding the Group CEO*

148,750

0

0

of which to Group CEO*

91,000

0

0

Starting price (EUR)**

24.54

36.79

42.14

Theoretical market value (EURm)***

9.5

0.2

0.3

Participants

27

3

4

* Figures represent the outstanding part of the initial allocation. No new allocations will be made to employees of Mandatum Group from this scheme.
** Dividend adjusted starting price
*** Calculation based on Black & Scholes model. Return on capital at risk criterion assumed to be fulfilled at 100 per cent.
**** The number of participants by allocations. The participants may have received incentive units in more than one allocation.

Terms of the long-term incentive scheme

15.5.2024