Remuneration

On 7 May 2024, the Annual General Meeting (AGM) decided that the Chair of the Board will be paid an annual fee of EUR 55,000, the Vice-Chair an annual fee of EUR 40,000 and the members an annual fee of EUR 27,400. Also, the AGM decided that the Chair of a committee will be paid an annual fee of EUR 7,000 and the members an annual fee of EUR 3,500. No separate meeting fees will be paid. The travel expenses of the members of the Board of Directors will be reimbursed in accordance with the company’s travel rules.

The Annual General Meeting decided that the annual fee of the Chair of the Shareholders’ Nomination Board will be EUR 4,000 and that the annual fee of the members will be EUR 2,500.

The Board of Directors decides on the remuneration and benefits of the CEO, as well as other terms of the CEO contract. The CEO contract also includes financial benefits, including compensation for dismissal and other possible compensations.

The remuneration of the CEO consists of basic salary (including fringe benefits), annual performance bonus  (STI) and long-term incentive schemes, such as share-based incentive schemes (LTI). The fixed salary of the CEO is EUR 24,020 per month. The remuneration and benefits paid to the CEO in 2023 amounted to EUR 359,000.

The CEO is entitled to statutory pension. The retirement age of the CEO is defined in the statutory employee pension scheme.

The period of notice for the CEO contract is 6 months on either side. If Loihde terminates the contract, the CEO is under certain conditions entitled to a one-time payment corresponding to 12 months’ monthly salary.

The company’s personnel committee decides the fixed salaries of the members of the Leadership Team, apart from the Group CEO and deputy CEO. Incentive schemes and their terms are decided by the Board of Directors.

The remuneration of the members of the Group’s Leadership Team consists of basic salary (including fringe benefits), annual performance bonus (STI) and long-term incentive schemes, such as share-based incentive schemes (LTI).

The members of the Leadership Team are entitled to statutory pension benefits.

Each member of the Leadership Team has a 3 months’ period of notice. In addition, some of the members are entitled to a separate payment corresponding to 6 months’ salary, if the company terminates their contract.

Employee Share Savings Plan (ESSP) 2024

On 29 April 2024, the Board of Directors of Loihde Plc decided to continue the Employee Share Savings Plan (ESSP) that started last year with a new savings plan.

The ESSP consists of a one-year savings period and a holding period following the savings period. The ESSP is offered to all Loihde employees. The employees will have the opportunity to save a portion of their salaries and invest those savings in Loihde’s shares. The savings will be used to buy shares in Loihde four times a year. The Board of Directors will decide whether the savings shares are purchased from the market or whether they are delivered to the participants in a directed share issue decided separately by the Board.

As a reward for their commitment, Loihde grants the participating employees a gross bonus of one (1) matching share for every two (2) savings shares acquired with their savings. Additionally, the participants have the opportunity to earn half (0.5) or one (1) performance-based matching share (gross) for every two (2) savings shares acquired with their savings, based on the achievement of the performance criterion. The performance criterion is the Group’s EBITDA for the financial years 2024-2026. Continuity of employment and holding of acquired savings shares for the duration of the holding period are the prerequisites for receiving the bonus.

The potential bonus will be settled in shares, or partly in shares and partly in cash, after the holding period. The cash portion is intended to cover taxes and tax-related costs. The matching shares will be freely transferable after their registration on the participant’s book-entry account.

Participation in the ESSP is voluntary. The savings period will commence on 1 June 2024 and end on 31 May 2025, and the holding period will commence with the first acquisition of savings shares and end on 31 May 2027. The maximum number of matching shares (gross number before taxes) in the ESSP is approximately 71,500, calculated at the current share price. The final number of matching shares will depend on the employees’ participation and savings rate in the plan, the fulfilment of the prerequisites for receiving matching shares and the achievement of the performance criterion.

Employee Share Savings Plan (ESSP) 2023

On 25 May 2023, the Board of Directors of Loihde Plc decided to establish an Employee Share Savings Plan (ESSP). The aim of the ESSP is to encourage employees to acquire and own Loihde shares, and it is also intended to align the interests of the shareholders and the employees and to increase the employees’ motivation and long-term commitment to the company.

The ESSP consists of annually commencing plan periods, each one comprising of an approximately one-year savings period and a holding period following the savings period. The ESSP is offered to all Loihde employees. The employees will have the opportunity to save a portion of their salaries and invest those savings in Loihde’s shares. The savings will be used to buy shares in Loihde four times a year. The Board of Directors will decide whether the savings shares are purchased from the market or whether  they are delivered to the participants by a directed share issue decided separately by the Board.

As a reward for their commitment, Loihde grants the participating employees a gross bonus of one (1) matching share for every two (2) savings shares acquired with their savings. Additionally, the participants have the opportunity to earn half (0.5) or one (1) performance-based matching share (gross) for every two (2) savings shares acquired with their savings, based on the achievement of the performance criterion. The performance criterion is the group’s EBITDA margin for the financial year 2025. Continuity of employment and holding of acquired savings shares for the duration of the holding period are the prerequisites for receiving the bonus.

The potential bonus will be settled in shares, or partly in shares and partly in cash, after the end of the holding period. The cash portion is intended to cover taxes and tax-related costs. Matching shares will be freely transferable after their registration on the participant’s book-entry account.

Participation in the ESSP is voluntary and the employees will be invited to participate in one plan period at a time. The first savings period will commence on 1 July 2023 and end on 31 May 2024. The holding period of the first plan period will begin at the first acquisition of savings shares and end on 31 May 2026. The maximum number of matching shares (gross number before taxes) for the first plan period is approximately 62,500, calculated at the current share price. The final number of matching shares depends on the employees’ participation and savings rate in the plan, the fulfilment of the prerequisites for receiving matching shares and the achievement of the performance criterion.

Share-Based Incentive Scheme for the Personnel 2022–2024

On 6 June 2022, the Board of Directors of Loihde decided on a long-term incentive scheme for the company’s personnel (Employee Matching Share Plan 2022). The target group for the incentive scheme includes all of the personnel of Loihde Group, including the management. The purpose of the scheme is to align the goals of the shareholders and personnel in order to increase the value of the company and implement the business strategy in the long term as well as to engage the personnel’s commitment to the company and offer them a competitive bonus system based on the earnings and value development of the company’s shares.

The incentive scheme consists of one vesting period, 6 July 2022–31 December 2024. After the vesting period participants who have subscribed for shares will receive one matching share free of charge for each three shares they have subscribed for and still hold at the time of the payment of the bonus. In order to be eligible to receive the matching shares, the participant must still be employed by the Group at the time of the payment of the bonus. Bonuses based on the earning of matching shares will be paid to the eligible participants after the vesting period, tentatively in early 2025. The bonuses under the incentive scheme will be paid primarily in a combination of company shares and cash. The cash component is intended to cover the taxes and tax-related costs arising from the bonus. The Board of Directors also has the right to decide that the bonus be paid fully in shares or fully in cash.

During the subscription period, 14 June 2022–22 June 2022, the participants in the scheme have had the opportunity to subscribe for company shares at a reduced subscription price (a 10 per cent discount on the average price of the share during the period 1–31 May 2022). A total of 144 Loihde employees participated in the employee share issue and subscribed for a total of 50,208 shares. The new shares were registered in the Trade Register on 18 July 2022. The share issue was based on the authorisation given by the Annual General Meeting (AGM) held on 5 May 2022.

Share-Based Incentive Scheme for the Personnel 2021–2023
(has ended)

On 27 May 2021, the Board of Directors of Loihde decided on a long-term incentive scheme for the company’s personnel (Share-Based Incentive Scheme for Personnel 2021). The target group for the incentive scheme included all of the personnel of Loihde Group, including the management. The purpose of the scheme was to align the goals of the shareholders and personnel in order to increase the value of the company and implement the business strategy in the long term as well as to engage the personnel’s commitment to the company and offer them a competitive bonus system based on the earnings and value development of the company’s shares.

The incentive scheme consisted of one vesting period, 1 June 2021–31 December 2023. After the vesting period, which will lasted approximately two and a half years, participants who had subscribed for shares received one matching share free of charge for each three shares they had subscribed for and still held at the time of the payment of the bonus. In order to be eligible to receive the matching shares, the participant had to still be employed by the Group at the time of the payment of the bonus. Bonuses based on the earning of matching shares were paid to the eligible participants after the vesting period, in early 2024. The bonuses under the incentive scheme will be paid primarily in a combination of company shares and cash. The cash component is intended to cover the taxes and tax-related costs arising from the bonus. The Board of Directors also has the right to decide that the bonus be paid fully in shares or fully in cash.

During the subscription period, 18 June 2021–24 June 2021, the participants in the scheme had the opportunity to subscribe for company shares at a reduced subscription price (a 10 per cent discount on the average price of the share on Privanet during the period 1 November 2020–30 April 2021). The share issue was based on the authorisation given by the AGM held on 9 May 2019, and the new shares were registered in the Trade Register on 19 July 2021.

Vesting Period	Number of Participants	Number of Subscriptions	Matching Shares
			Time of Payment	Number of Shares Realised
2021–2023	327	82,842	Spring 2024	12,987

 

Share-Based Incentive Scheme for the Personnel 2018–2023
(has ended)

In autumn 2018, Loihde launched a share-based incentive scheme for the personnel with the aim to align the interests of the company’s employees and shareholders by encouraging the company’s employees to invest in the company’s shares and to commit to working for the company’s goals.

The incentive scheme included a matching share scheme offered to all employees of the Group’s core businesses as well as a performance-based bonus scheme for the senior management and selected key employees. The participants in the scheme had the opportunity to subscribe for company shares at a reduced subscription price (a 10 per cent discount on the average price of the preceding six months on Privanet) and, after a two-year vesting period, they received matching shares free of charge at a rate of one quarter of the number of shares subscribed. To receive matching shares, the employee had to hold the shares purchased until the end of the commitment period and also be employed by Loihde Group at the end of the commitment period. The criteria for the performance-based bonus scheme were the Group’s EBITDA and total shareholder return (TSR). The bonuses under the incentive scheme were, depending on the participant’s choice, paid entirely in shares or in a combination of shares and cash, where the cash component was intended to cover the taxes and tax-related costs arising from the bonus.

There were three vesting periods under the scheme: 2018–2021, 2019–2022 and 2020–2023. The share issues included in the scheme were based on authorisations given by the AGM in 2018, 2019, 2020 and 2021.

Vesting Period	Number of Participants	Number of Subscriptions	Matching and Bonus Shares
			Time of Payment	Number of Shares Realised
2018–2020	266	63,170	Spring 2021	25,296
2019–2021	330	83,789	Spring 2022	22,093
2020–2022	298	82,003	Spring 2023	12,3891)

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1) The 2020–2022 vesting period did not include a performance-based bonus scheme.

Share-Based Incentive Scheme for the CEO 2024–2026

On 26 February 2024, The Board of Directors of Loihde Plc decided to launch a new conditional share-based long-term incentive scheme for the CEO of the company. The purpose of the scheme is to align the goals of the shareholders and the CEO to increase Loihde’s value in the long run, to implement the business strategy and to commit the CEO.

The share-based incentive scheme for the CEO will consist of one three-year vesting period from 2024 to 2026. The maximum number of shares to possibly be paid as a bonus in the scheme is 12,000 shares (0.2% of all shares and votes), and they will be paid during 2025 and 2026.

Key terms and conditions of the scheme include that the CEO’s employment relationship is valid, with certain prerequisites, at the time when the bonus will be paid. In addition, the number of bonus shares depends on the number of shares the CEO will purchase from the market.

Long-Term Incentive Scheme for the Management and Key Personnel 2023 (LTI) 

On 28 November 2023, the company’s Board of Directors decided on a performance-based long-term incentive scheme aimed at the Group Leadership Team and selected key employees. The scheme consists of one three-year vesting period (2024–2026).  A maximum of 29 people are covered by the incentive scheme. The criteria for the payment of the bonus are the EBITDA target set by the Board for the vesting period and the development of total shareholder return (TSR). The maximum number of shares to possibly be paid as a bonus is 107,600 shares in Loihde Plc. A prerequisite of the bonus under the incentive scheme is that the key employee’s employment relationship has not been terminated or ended by the employee in question or by the company before the end of the vesting period.

Long-term Incentive Scheme for the Management and Key Personnel 2021 (LTI) 

On 3 March 2021, the company’s Board of Directors decided on a performance-based long-term incentive scheme aimed at the Group Leadership Team and selected key employees. The scheme consists of three-year vesting periods starting annually, each of which requires separate approval by the Board of Directors. The criteria for the payment of the bonus are the revenue and EBITDA targets set by the Board for the vesting period. The share bonuses based on the first vesting period (2021–2023) were paid in spring 2024, the share bonuses based on the second vesting period (2022–2024) will be paid in spring 2025 and the share bonuses based on the third vesting period (2023–2025) will be paid in spring 2026. The total number of bonus shares were 7,762 for the first vesting period. The total number of bonus shares will be at most 63,864 shares for the second vesting period and at most 102,000 shares for the third vesting period. A prerequisite of the bonus is that the key employee’s employment or service relationship has not been terminated or ended by the employee in question or by the company before the end of the vesting period.

Share-Based Incentive Scheme for the Board of Directors

The Annual General Meeting (AGM) held on 25 June 2020 resolved to adopt a long-term share-based incentive scheme for the members of the Board of Directors and resolved on a related share issue. Under the incentive scheme, the members of the Board can subscribe for company shares at an amount corresponding to half of their annual fee at a maximum. In the incentive scheme, the subscription price corresponds to the average price of the company share for the six-month period preceding the resolution on the share issue, with a 10 per cent discount applied. The AGM may resolve on issuing commitment shares to the participants in the scheme based on their share ownership after a specified vesting period. Eligibility for the commitment shares is conditional on the participant still being a member of the company’s Board of Directors.

In 2020, two members of the Board participated in the incentive scheme and subscribed for 960 shares in total. In 2021, five members subscribed for 2,740 shares in total. In 2022, five members subscribed for 3,667 shares in total and in 2023, six members subscribed for 3,843 shares in total.