The Management Team’s terms of employment and pay are approved by the Board of Directors, which also decides on the Group’s performance bonus system. The retirement age of the Management Team members is determined in accordance with the Employees’ Pension Act. The Management Team is paid a fixed salary, which is determined in the management contracts. In addition to the fixed salary, there may be an annual remuneration which is paid on the basis of agreed metrics depending on the achievement of related targets.
CEO’s incentive scheme
On 26 May 2020, the Board of Directors of Incap Corporation resolved on the establishment of a share-based long-term incentive scheme for Otto Pukk, the CEO of the company, and on 26 April 2022, on its amendment. The CEO may earn a reward based on the development of the company’s net EBIT for the period ended December 31 2021, a total of 38,200 new shares of the company in share issues without payment, provided that the CEO is still in a service relationship with the company at the time of payment of the remuneration.
Otto Pukk subscribed a total of 38,200 new shares of the company offered to him. On 23 May 2022, Incap’s Board of Directors resolved to approve the share subscriptions made after the terms of the CEO’s incentive plan were fulfilled. The new shares of the company subscribed for in the share issues may not be sold, otherwise transferred or pledged during one year from the time the new shares of the company subscribed acceptably for in the share issues have been entered in the Finnish Trade Register.
Key employee incentive plan
In April 2022, the Board of Directors of Incap Corporation decided to establish a new long-term incentive plan for the Group´s key employees. The aim of the plan is to align the objectives of the shareholders and key employees for increasing the value of the company in the long term, to retain the key employees at the company, and to offer them a competitive reward plan based on acquiring, earning and accumulating the company ´s shares.
The long-term Performance Share Plan is based on a rolling 3-year performance period structure, with a new performance period starting at the beginning of each year if so decided by the Board.
In the plan, the target group is given an opportunity to earn Incap’s shares based on performance. The Board of Directors decides on the plan’s performance criteria and targets to be set for each criterion at the beginning of each performance period. The potential rewards based on the plan will be paid after the end of each performance period.
The rewards will be paid partly in the company´s shares and partly in cash. The cash proportion of the reward is intended to cover the taxes and statutory social security contributions arising from the reward to a participant. In general, no reward is paid if the participant´s employment or director contract terminates before the reward payment.
During the performance period 2022–2024, the rewards are based on the Group’s cumulative operating profit (EBIT). During the performance period 2022–2024, the CEO and other Incap Management Team members form the target group of the incentive plan. The rewards to be paid on the basis of the performance period 2022–2024 correspond to the value of an approximate maximum total of 30,191 Incap Corporation shares, including also the proportion to be paid in cash.
An Incap Management Team member is obliged to hold 50% of the received net reward shares until the total value of the Management Team member’s shareholding in Incap Corporation equals to 50% of their annual base salary of the preceding year. Respectively, the CEO is obliged to hold 50% of the received net reward shares until the CEO´s shareholding in the company equals to 100% of the CEO´s annual base salary of the preceding year. Such number of the company’s shares must be held as long as the membership in the Management Team or the position as the CEO continues.