Nokian Tyres, which booked record first quarter profits is to pay workers bonuses in cash and shares over the next two years.
In 2013 its directors approved a share based incentive plan for key group employees. The aim was to combine the objectives of the shareholders and the key employees to increase the value of the company, to commit the key workers to the company, and to offer them a competitive reward plan based on earning shares in their employer.
The plan includes three performance periods, calendar years 2013, 2014 and 2015. The board decides on performance criteria and targets for a performance period at the beginning of each. The potential reward from period 2015 will be based on the group’s net sales and operating profit.
Rewards from period 2015 will be paid partly in shares and partly in cash in 2017. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key employees. No reward will mainly be paid, if the key employee’s employment or service ends before reward payment. The shares paid as reward may not be transferred during an approximately two-year restriction period established for the shares. For shares earned on the basis of period 2015, the restriction period will end on 31 December 2018.
The plan applies only to approximately 40 workers. The rewards for period 2015 correspond to an approximate maximum total of 160,000 Nokian Tyres shares and include the proportion to be paid in cash.
The targets set for performance periods 2013-2014 under the share based incentive plan were not met. Therefore no rewards were paid for years 2013-2014.
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