Incentive Systems

To ensure management's motivation and commitment, Alma Media has a share-based incentive system LTI 2015.

Share-based incentive plan (LTI 2015)

In 2015. the Board of Directors of Alma Media Corporation approved the establishment of a long-term share-based incentive scheme for the key management of Alma Media (hereinafter referred to as “LTI 2015”).

The objective of LTI 2015 is to align the interests of the participants with those of Alma Media’s shareholders by creating a long-term equity interest for the participants and, thus, to increase the company value in the long term as well as to drive performance culture, to retain participants and to offer them with competitive compensation for excellent performance in the company.

LTI 2015 consists of annually commencing individual plans, each subject to separate Board approval. Each of the individual plans consists of three main elements: an investment in Alma Media shares as a precondition for participation in the scheme, matching shares based on the above share investment and the possibility of earning performance-based matching shares.

The Board of Directors of Alma Media Corporation has decided on four individual plans based on the LTI 2015 share-based incentive scheme: LTI 2015 I, LTI 2015 II, LTI 2015 III and LTI 2015 IV. The main terms of the incentive schemes correspond to those of the LTI 2015 share-based incentive scheme that was launched in 2015.

The matching share plan

In the matching share plan, the participant receives a fixed amount of matching shares against an investment in Alma Media shares. 

In the LTI 2015 I matching share plan, the participant receives two matching shares for each invested share free of charge after a two-year vesting period, provided that the other conditions stipulated for the receipt of the share-based incentive by the terms of the plan are still satisfied at the time.

The performance matching plan

The performance matching plan comprises a five-year performance period in total. The potential share rewards will be delivered in tranches after three and five years if the performance targets set by the Board of Directors are attained.
 

The performance measures used in the performance matching plan are based on the company’s profitable growth and share value. If the performance targets set by the Board of Directors are attained in full, the participant will receive in total four matching shares for each invested share free of charge, provided that the other conditions stipulated for the receipt of the share-based incentive by the terms of the plan are still satisfied at the time.  

Payment of the incentive is contingent on the participant holding on to the shares invested in the plan and remaining employed by the Group for the five-year duration of the plans. The incentives are paid partly in cash and partly in shares. The cash component is intended to cover taxes incurred by the participant from the incentive. 

The fair value of the reward is expensed until the matching shares are paid. The fair value of the share component is determined on the date on which the target group has agreed to the conditions of the plan. The financing cost arising from the obligation to hold shares and dividends expected during the vesting period have been deducted from the value of the share. The fair value of the plan based on the total shareholder return of the share also takes the market-based earning criteria into consideration. The cash component of the incentive is remeasured on each reporting date during the vesting period based on the price of the share on the date in question.

Share-based   incentive scheme
LTI   2015
Based on share investment (shares max)
Gross amount from
which taxes are
deducted
Performance   matching
(shares max)
Gross amount from
which taxes are deducted
Maximum number
of people entitled to participate
Launched in 2015
LTI 2015 I
159.000318.00035
Launched in 2016 
LTI 2015 II
195.000390.00043
Launched in 2017 
LTI 2015 III
195.000390.00044
Launched in 2018 
LTI 2015 IV
203.000406.00054

The Board of Directors has estimated that no new shares will be issued in connection with LTI 2015. Therefore, the plan will have no dilutive effect on the number of the company’s registered shares.

The AGM of 14 March 2018 authorised the Board of Directors to decide on a share issue by transferring shares in possession of the company. A maximum of 824.000 shares may be issued on the basis of this authorisation. The proposed maximum authorised quantity represents approximately one (1) per cent of the company's entire share capital. The authorisation entitles the Board to decide on a directed share issue, which entails deviating from the pre-emption rights of shareholders. The Board can use the authorisation in one or more parts. The Board of Directors can use the authorisation to implement incentive programmes for the management or key employees of the company.

It is proposed for the authorisation to be valid until the following Annual General Meeting. but no later than 30 June 2019. This authorisation would override the corresponding share issue authorisation granted at the AGM on 22 March 2017.

The allocation of the share-based incentive scheme for the President and CEO and the group Executive Team is available on Remuneration page

 

Share-based incentive scheme LTI 2015 III, launched in 2017

The Board of Directors of Alma Media Corporation decided to launch a share-based incentive programme to begin in 2017 (LTI 2015 III) based on the LTI 2015 arrangement. The main terms of the 2017 incentive scheme correspond to those of the share-based incentive scheme that began in 2015 and in 2016.

Read more: Alma Media's share based Incentive Scheme Commencing in 2017