Understanding Bang & Olufsen's 2025/26 Share Incentive Program

Overview of the Long-Term Share-Based Incentive Program

Bang & Olufsen A/S has put forward an exciting initiative with its long-term restricted share program for the financial years 2025/26. This initiative is part of the company's comprehensive Remuneration Policy approved by the Board of Directors, aimed at enhancing the dedication of the Executive Management Board and key employees.

Program Structure and Objectives

This innovative program allocates a significant portion, at least 50%, of the shares as Performance Shares. These shares are designed to vest in equal tranches over three financial years: 2025/26, 2026/27, and 2027/28. The vesting is contingent on achieving specific Key Performance Indicators (KPIs) set forth by the Board, which are pivotal for measuring success and aligning interests with the company's growth.

Key Performance Indicators (KPIs)

The KPIs for the initial year, 2025/26, focus on crucial financial metrics including revenue growth, Earnings Before Interest and Taxes (EBIT) before special items, and Free Cash Flow. These indicators will determine the extent to which the Performance Shares are vested, linking employee rewards directly with company performance.

Retention Shares and Employment Criteria

The remaining shares allocated in this program are categorized as Retention Shares. These shares hinge on the continued employment of participants within the Bang & Olufsen group and depend on satisfactory performance review ratings throughout the three-year term. Similar to Performance Shares, the Retention Shares vest in three equal parts over this period, adding another layer of commitment and motivation for the participants.

Total Allocation and Release Conditions

For those involved in this program, the maximum number of shares available totals 5,726,723. This allocation underscores Bang & Olufsen's commitment to rewarding its employees for their contributions and ensuring retention of talent. Following the annual meeting's approval of the 2027/28 annual report, any vested restricted shares will be released, although there are provisions for acceleration of vesting in extraordinary situations as laid out in the company's remuneration policy.

Valuation and Financial Implications

As of the current date, based on the volume-weighted average price of the company's shares traded on Nasdaq Copenhagen, the financial impact of the restricted shares for all participants can reach DKK 38.4 million, assuming target performance levels are attained. This figure not only represents potential monetary value for employees but also signifies the company's optimistic growth outlook.

Contact Information for Inquiries

For individuals seeking additional details regarding this share program or any related financial strategies, Christina Rønde Hefting from Investor Relations is available for queries. You can reach her at +45 4153 7303 for personalized assistance and information.

Frequently Asked Questions

What is the purpose of the long-term share-based incentive program?

The program aims to align the interests of key management and employees with the company's performance through performance-related and retention-based stock vesting.

What are the key performance indicators for 2025/26?

The KPIs include revenue, EBIT before special items, and Free Cash Flow, which determine the vesting of Performance Shares.

How are Retention Shares vested in this program?

Retention Shares vest in equal tranches over three years, contingent on continued employment and satisfactory performance ratings.

What is the total number of shares available under this initiative?

A maximum of 5,726,723 shares can be granted to participants in this program.

How much is the total value of the restricted shares?

The potential total value can reach DKK 38.4 million based on the company's share price and target performance levels.

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