UPM's New Performance Share Arrangement
UPM-Kymmene Corporation has announced a brand new plan within its Performance Share Arrangement, approved by its Board of Directors. This plan is set to commence for the 2025-2027 period, reflecting UPM's commitment to aligning executive compensation with the company's strategic objectives.
Understanding the Performance Share Arrangement
The Performance Share Arrangement consists of annual plans, each needing approval from the Board of Directors. This means that every year, UPM will assess the workings of its arrangement and make any necessary adjustments to align with business goals.
Participants Included in the New Plan
This arrangement is specifically designed for UPM's President and CEO, as well as members of the Group Executive Team and other key senior management individuals. It highlights UPM's strategy of incentivizing leadership through performance-based rewards.
Criteria for Earning Shares
For the earning period from 2025 to 2027, the criteria for earning shares in the Performance Share Arrangement hinge on two main factors: the total shareholder return and carefully selected sustainability performance measures. These measures focus on essential environmental goals, such as reducing fossil CO2 emissions from both UPM's own combustion and its procured energy.
Commitment to Sustainability
Additionally, UPM aims for a net positive impact on biodiversity in its forests, alongside achieving global gender pay equity. This focus on sustainability reflects the company’s broader commitment to responsible corporate practices.
Share Delivery and Participants' Rewards
The 2025-2027 plan is set to comfortably accommodate 27 participants. If all the defined earning criteria are met, UPM estimates the maximum number of shares deliverable at around 552,000. It’s important to note that this figure represents the gross value of rewards before any applicable taxes are deducted.
The company plans to execute share delivery using shares already in existence, ensuring no dilutive effects on the overall share structure occur. Along with meeting the earning criteria, continued employment at UPM plays a critical role in determining eligibility for the share rewards.
Current Employee Incentive Arrangements
In addition to the Performance Share Arrangement, UPM has established two other share-based long-term incentive arrangements: the Deferred Bonus Arrangement and the Restricted Share Arrangement. For employees seeking to understand the complete landscape of UPM's incentive offerings, specifics about these arrangements are readily available.
About UPM
UPM is a leading company known for delivering renewable and responsible solutions across multiple business sectors, including UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers, and UPM Plywood. With a workforce of approximately 15,800 employees globally and annual sales near EUR 10.3 billion, UPM takes pride in its commitment to sustainability and innovative practices that pave the way for a carbon-neutral future.
By adhering to the UN Business Ambition for 1.5°C and the established science-based targets for climate change mitigation, UPM continues to showcase its leadership in sustainability. The company’s strategic focus on 'Biofore – Beyond Fossils' underpins its dedication to a greener future.
Frequently Asked Questions
What is the new Performance Share Arrangement introduced by UPM?
The new Performance Share Arrangement is a plan approved by UPM's Board of Directors that aims to reward top management based on specific performance metrics from 2025 to 2027.
Who are the participants in this Performance Share Arrangement?
The plan includes UPM’s President and CEO, Group Executive Team members, and selected senior management personnel.
What criteria will determine the rewards under the new Arrangement?
The rewards will be based on total shareholder return and sustainability performance measures, including CO2 emissions reduction and gender pay equity.
How many shares are estimated to be delivered under this plan?
If all criteria are met, approximately 552,000 shares may be delivered to participants.
What other incentive arrangements does UPM have in place?
In addition to the Performance Share Arrangement, UPM has the Deferred Bonus Arrangement and the Restricted Share Arrangement as part of its long-term incentive offerings.
