Schouw & Co. Updates Long-Term Incentive Strategy for 2024
Overview of the Restructured Incentive Programme
Schouw & Co. has been dedicated to cultivating long-term growth through its incentive programmes since 2003. These initiatives are aimed primarily at senior managers across the organization. As we look ahead to 2024, the incentive programme has undergone significant restructuring to create a more direct correlation with the performance of individual portfolio companies, offering a fresh approach to incentivization.
Performance Share Units: A Shift in Strategy
The Board of Directors has introduced an updated model for the long-term incentive programme of the Group’s parent company. Unlike before, where share options were the core component, the new model emphasizes the granting of Performance Share Units (PSUs). Such a structure aligns with practices widely adopted by major Danish listed companies, allowing for a streamlined approach that encourages performance enhancement among senior management.
Incentives Aligned with Shareholder Interests
The primary goal of the revamped long-term incentive programme is to foster value creation within Schouw & Co. This restructuring is designed to synchronize the objectives of senior managers with the interests of shareholders, promoting a culture of shared success.
Details of the Performance Share Units
Under the new plan, three senior managers from the parent company are set to receive a total of 18,600 PSUs. Notably, Jens Bjerg Sørensen, the CEO & President, is awarded 12,200 PSUs. These PSUs provide participants with the conditional right to receive shares at no cost, contingent upon certain performance metrics and the approval of the annual financial report for the year 2027.
Importantly, the maximum grant for each participant cannot exceed 75% of their annual base salary. This structure not only motivates individuals to excel but also frames their success within the financial health of the company.
Performance Metrics and Evaluation
The effectiveness of the incentive programme is determined using key performance indicators (KPIs), focusing on achieving goals over the establishment period of 2025 to 2027. The KPIs for the upcoming programme have been bifurcated into three critical categories: EBITDA and Return on Invested Capital (ROIC), both weighted at 40%, and Total Shareholder Return at 20%. The theoretical valuation of the programme extends between zero and DKK 12 million, validating the financial integrity and ambition of the initiative.
Continued Employment and Good Leaver Provision
To maintain the integrity of this programme, vesting of the PSUs hinges on continuous employment with a group company throughout the vesting period. Participants are required to adhere to the programme's terms consistently. However, provisions are in place for individuals categorized as Good Leavers; they may still retain a proportional share of the PSUs based on their duration of employment during the performance period.
Company Leadership and Contact Information
Leadership plays a pivotal role in ensuring the programme's success. The Board of Directors is led by Chairman Jørgen Dencker Wisborg, alongside Jens Bjerg Sørensen, who continues to steer the company as President & CEO. For inquiries related to the incentive programme, Jens Bjerg Sørensen can be reached directly at +45 8611 2222, providing a clear line of communication for any further information.
Frequently Asked Questions
What is the main goal of the restructured incentive programme?
The primary goal is to align the interests of senior managers with those of the shareholders while promoting a culture of value creation.
How are the Performance Share Units granted?
Performance Share Units are granted conditionally, with a maximum that cannot exceed 75% of the participant's annual base salary.
What key performance indicators are utilized?
KPIs include EBITDA, Return on Invested Capital (ROIC), and Total Shareholder Return, which drive the assessment of performance over the specified years.
What happens if a participant leaves the company?
Participants designated as Good Leavers can retain a proportional share of their PSUs based on their employment duration during the performance period.
Who can I contact for more information about the programme?
For questions regarding the incentive programme, you can contact Jens Bjerg Sørensen, the CEO, at +45 8611 2222.
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