The board of directors of Stora Enso, a provider of renewable products in packaging, biomaterials and wooden construction, has decided on a new plan for 2023–2025 under the company’s share-based long-term incentive program. The purpose of the plan is to incentivize and align management with shareholder interests and the long-term strategy of the company. This will be done through setting measurable and long-term financial, strategic and ESG (environmental, social and governance) targets, the company said.
The long-term incentive plan consists of performance shares (performance share plan) with a three-year vesting period, and selectively restricted shares (restricted share plan) with a three-year retainment period.
The long-term incentive plan includes ESG targets in order to strengthen the leadership’s long-term commitment to the company’s sustainability agenda. The earnings criteria for the performance share plan are earnings per share (EPS) (40% weight) and relative total shareholder return (TSR) (40% weight). The non-financial ESG targets represent a 20% weight, allocated as: CO2 emission reduction (10% weight), and diversity and inclusion (10% weight).
The target levels for EPS are decided and set ahead of each one-year period. The target levels for relative TSR and ESG performance are set for the three-year plan. The potential payout is based on the company’s performance in relation to the targets over the three-year plan period. Share rewards will be paid in Stora Enso R shares, where legally possible.
The long-term incentive plan for the period 2023–2025 covers a maximum of 300 employees. The long-term incentive plan for members of the Stora Enso Group Leadership Team consists of performance shares only.
The maximum value of the plan is set at EUR 20 million at grant, which corresponds to approximately 1,449,000 shares at the share price on 9 February 2023.
No new shares will be issued in connection with the execution of the plan, and there is no dilutive effect on the number of Stora Enso’s registered shares. Besides attainment of the performance criteria, the share reward is subject to continuation of employment. The share rewards earned within the plan for 2023–2025 will be delivered in 2026. Applicable taxes will be deducted before shares are delivered to the employees.
