CARGOTEC CORPORATION, STOCK EXCHANGE RELEASE, 10 FEBRUARY 2016 AT 9.10 A.M. (EET)
Cargotec's Board of Directors has approved a long-term incentive programme for management
The Board of Directors has approved a new long-term incentive programme for key personnel of Cargotec for 2016 - 2019. The programme is similar in form to the one approved one year ago covering 2015 - 2018. The purpose of the programme is to increase Cargotec's profitability, efficient use of capital and shareholder value in the long term by attracting and retaining the required talent. The number of participants will be approximately 90 persons, including Cargotec's President and CEO and members of the Executive Board.
Similarly to the previous programme this new programme consists of two phases. The first phase includes specific financial performance targets for the year 2016 (business area or corporate return on capital employed, ROCE). The second phase consists of an additional earnings multiplier, which is based on Cargotec's total shareholder return (TSR) at the end of a three year performance period in March 2019. The second phase serves to align the interests to that of the shareholders as well as retention. Eligible participants need to be employed by Cargotec by the end of the second phase of the programme in the spring 2019.
The potential reward will be delivered in Cargotec class B shares in 2019. Gross reward, before deduction for the applicable taxes and employment related expenses, is in range of 25 - 120 percent of annual base salary for on target performance (for maximum performance the range is 75 - 360 percent of annual base salary). If the performance was on target for the maximum number of participants, the cost of the programme for the three year period would be approximately EUR 7.3 million (for maximum performance approximately EUR 21.8 million). If the financial performance threshold levels are not met, there will not be any incentive payment.
As a part of total compensation, additional restricted share grants can be allocated for selected few key employees during 2016-2018. Gross reward, before deduction for the applicable taxes and employment related expenses, is in range of 25-100% of annual base salary. If the financial performance threshold levels were met, the maximum cost of the programme is EUR 1.75 million annually. If the financial performance threshold levels are not met, there will not be any incentive payment.
No new shares will be issued in connection with the above programme and therefore the programme will have no diluting effect.
For further information, please contact:
Eeva Sipilä, Executive Vice President, CFO, tel. +358 20 777 4104
Vesa-Pekka Lankinen, Vice President, Performance and Rewards, tel. +358 20 777 4113
Cargotec (Nasdaq Helsinki: CGCBV) is a leading provider of cargo and load handling solutions with the goal of becoming the leader in intelligent cargo handling. Cargotec's business areas Kalmar, Hiab and MacGregor offer products and services that ensure our customers a continuous, reliable and sustainable performance. Cargotec's sales in 2015 totalled approximately EUR 3.7 billion and it employs almost 11,000 people. www.cargotec.com
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Source: Cargotec Corporation via Globenewswire
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