New long-term incentive plan based on performance, share value and growth established for Raute's senior management and selected key persons
RAUTE CORPORATION STOCK EXCHANGE RELEASE XX FEBRUARY 2021 at 1:45 p.m.
NEW LONG-TERM INCENTIVE PLAN BASED ON PERFORMANCE, SHARE VALUE AND GROWTH ESTABLISHED FOR RAUTE’S SENIOR MANAGEMENT AND SELECTED KEY PERSONS
Raute Corporation’s Board of Directors has decided on the commencement of a new long-term incentive plan (LTI 2021–2023) for the Group’s senior management and selected key persons. The new LTI plan is based on performance, share value and growth. The purpose of the plan is to align the objectives of the owners and management in order to develop the company’s value for the long term, as well as to commit the company’s management and key persons to the company and to achieving the company’s strategic goals.
LTI 2021–2023 begins at the start of 2021 and covers an earnings period of three years, with two performance indicators applied. The first performance indicator is the Absolute Total Shareholder Return (Absolute TSR) on Raute’s A series share, and its weight is 70 percent. The second performance indicator is the net sales target, with a weight of 30 percent. Any possible rewards based on both performance indicators will be paid after the three-year plan ends and the financial statements have been completed, in spring of 2024, provided that the performance targets set by the Board of Directors have been achieved. The potential rewards will be paid in Raute’s series A shares or in cash, or as a combination thereof. Eleven persons belonging to Raute Group’s senior management are entitled to participate in the LTI 2021–2023 plan.
The Board of Directors is entitled to limit the rewards paid under the long-term incentive plan if the reward would exceed the threshold value of the fixed annual gross salary of the individual in question. If the participant’s service or employment relationship ends before the payment of the reward, the reward is generally not paid.
If the performance targets set for the plan beginning at the start of 2021 are fully achieved, the aggregate maximum amount of rewards to be paid based on the plan in question will correspond to the value of approximately 34,000 of the company’s series A shares. Aggregate amount of rewards means their gross amount before the withholding of the applicable payroll tax.
In accordance with the ownership recommendation the company abides by, the members of the company’s Executive Board are expected to accrue and, after attaining, to retain in their ownership an amount of the company’s shares that equals, for the CEO, his/her gross annual fixed salary, and for the other Executive Board members, their six months’ gross fixed salary. The members of the Executive Board are expected to use 50 per cent of the net bonus he/she receives from the plan to accrue his/her share ownership until such ownership meets the level recommended above. Share ownership accrues either by retaining ownership of bonuses received as shares or by acquiring shares through cash bonuses received under the plan.
Board of Directors
Laura Raitio, Chair of the Board of Directors, mobile number +358 50 386 0004
Nasdaq Helsinki Ltd, main media, www.raute.com
RAUTE IN BRIEF:
Raute is a technology and service company that operates worldwide. Raute’s customers are companies operating in the wood products industry that manufacture veneer, plywood, LVL (Laminated Veneer Lumber) and sawn timber. Its technology offering covers the entire production process for veneer, plywood and LVL and special measurement equipment for sawn timber. As a supplier of mill-scale projects, Raute is a global market leader both in the plywood and LVL industries. Additionally, Raute’s full-service concept includes technology services ranging from spare parts deliveries to regular maintenance and equipment modernizations. Raute’s head office is located in Lahti, Finland. The company’s other production plants are located in Kajaani, Finland, the Vancouver area of Canada, the Shanghai area of China and in Pullman, Washington, USA. Raute’s net sales in 2020 were EUR 115.0 million. The Group’s headcount at the end of 2020 was 751. More information about the company can be found at www.raute.com.