UPM's New Share Incentive Plans for 2026 and Beyond
UPM-Kymmene Corporation is excited to unveil its innovative share incentive plans commencing in 2026, designed to align employee interests with the company’s long-term goals. These incentives will span from 2026 to 2029, introducing a structure that not only rewards performance but also enhances sustainability.
Performance Share and Deferred Bonus Plans
The Board of Directors at UPM has officially approved new plans that fall under two essential categories: the Performance Share Plan and the Deferred Bonus Plan. These initiatives are tailored for a select group, including the President and CEO, members of the Executive Team, and other key management.
Performance Metrics Focus
The earning criteria for the upcoming Performance Share Plan from 2026 to 2028 will hinge on various crucial parameters. These include total shareholder return, adjusted Return on Capital Employed (ROCE), and a set of sustainability-focused performance measures. The sustainability goals aim to achieve significant reductions in CO2 emissions and promote biodiversity in UPM's operational forests.
Deferred Bonus Plan Criteria
Additionally, the Deferred Bonus Plan will evaluate performance based on the Group and business area's EBITDA. This plan will encompass a single earning year (2026) followed by a restriction phase that will extend through 2028. This structured approach ensures that the benefits are tied to sustained performance and commitment.
Standout Features of the Share Plans
In total, these share incentive plans will involve 346 participants. Should all performance benchmarks be achieved, UPM anticipates delivering approximately 1,306,000 shares, emphasizing a commitment to employees under the condition of their continued employment with the company. Importantly, these plans can be executed without diluting existing shares, as they will utilize already available stocks.
Restricted Share Arrangement
UPM has also greenlighted a new plan as part of its Restricted Share Arrangement, set to run from 2026 through 2029. This plan will cater to high-caliber employees in key positions, ensuring that exceptional talent is retained and engaged effectively. Unlike other arrangements, the President and CEO will not be eligible for retention rewards in this section.
Plan Structure and Delivery
The structure of the Restricted Share Arrangement separates into two key phases: a grant phase in the first year followed by a three-year vesting period. Participants can expect to see the benefits of their rewards installment-wise by the end of 2029, with a capped maximum of 500,000 shares available for distribution under this arrangement.
Employee Share Savings Arrangement
Equally noteworthy is the Employee Share Savings Arrangement, which promotes engagement at the employee level while aligning their interests with shareholders. This plan invites employees from UPM and its subsidiaries to participate actively, giving them a vested interest in the company's performance.
Participation and Rewards
Within the Employee Share Savings Arrangement, employees will have the opportunity to save a percentage of their salaries, which will be used to buy UPM shares quarterly. For every two shares purchased through employee savings, UPM will award a gross matching share, incentivizing participation further. Furthermore, new participants will receive ten free shares after completing a year’s contribution.
Your Role in UPM's Journey
As these plans take effect, they reflect UPM's ongoing commitment to sustainability and long-term corporate prosperity. By participating actively in these share programs, employees not only contribute to the company's success but also enrich their personal and financial growth.
Frequently Asked Questions
1. What are the key features of the new share incentive plans?
The new plans include a Performance Share Plan, Deferred Bonus Plan, Restricted Share Arrangement, and Employee Share Savings Arrangement, all aimed at long-term performance and employee engagement.
2. Who is eligible for these share incentive arrangements?
Eligibility generally includes the President, CEO, Group Executive Team members, and other selected key employees across UPM.
3. What sustainability goals are included in these plans?
The plans include goals such as reducing fossil CO2 emissions and achieving gender pay equity, alongside enhancing biodiversity in UPM's forests.
4. How will shares be delivered under the performance share plans?
Shares will be delivered using existing shares to prevent dilution, with delivery set to occur in installments depending on performance achievement and continuation of employment.
5. How does the Employee Share Savings Arrangement work?
Employees can save part of their salary to purchase company shares, receiving matching shares and additional free shares, contingent on continued participation and employment.
