Cargotec's Board of Directors has approved a long-term incentive programme for management
04/02/2014
CARGOTEC CORPORATION, STOCK EXCHANGE RELEASE, 4 FEBRUARY 2014, AT 9.00 AM (EET)
Cargotec's Board of Directors has approved a long-term incentive programme for management
The Board of Directors has approved a new long-term incentive programme for key personnel of Cargotec. The purpose of the programme is to increase Cargotec's profitability and shareholder value in the long term by attracting and retaining the required talent. The number of participants will be approximately 75 persons, including Cargotec's President and CEO and members of the Executive Board.
The programme consists of two phases. The first phase includes specific financial performance targets for the year 2014 (business area or corporate operating profit and working capital). The second phase consists of an additional earnings multiplier, which is based on Cargotec's market value (including both class A and class B shares) at the end of a three year performance period in 2016. The second phase serves to align the interests to that of the shareholders as well as retention (eligible participants need to be employed by Cargotec in the beginning of 2017).
The potential reward will be delivered in Cargotec class B shares in the beginning of 2017. Gross reward, before deduction for the applicable taxes and employment related expenses, is in range of 25-120 percent of annual base salary for on target performance. If the targets were fully met for the maximum number of participants, the cost of the programme for the three year period would be approximately EUR 12 million. If the financial performance threshold levels were not met, there would not be any incentive payment.
As a part of total compensation, additional restricted share grants can be allocated for selected few key employees during 2014-2016. Gross reward, before deduction for the applicable taxes and employment related expenses, is in range of 50-60% of annual base salary. If the financial performance threshold levels were met for the maximum number of participants, the cost of the programme for the three year period would be approximately EUR 2.9 million. If the financial performance threshold levels were not met, there would not be any incentive payment.
No new shares will be issued in connection with the above programme and therefore the programme will have no diluting effect.
For further information please contact:
Eeva Sipilä, Executive Vice President, CFO, tel. +358 20 777 4104
Paula Liimatta, Director, Investor Relations, tel. +358 20 777 4084
Cargotec shapes the cargo handling industry for the benefit of its customers and shareholders. Cargotec's business areas MacGregor, Kalmar and Hiab are recognised leaders in cargo and load handling solutions around the world. Their global network is positioned close to customers and offers extensive services that ensure a continuous, reliable and sustainable performance according to customers' needs. Cargotec's sales totalled approximately EUR 3.2 billion in 2013 and it employs approximately 11,000 people. Cargotec's class B shares are quoted on NASDAQ OMX Helsinki under symbol CGCBV. www.cargotec.com