30 Share based payments
At the end of 2012, the Board of Directors of Lemminkäinen Corporation decided on a new share-based incentive plan for the Group’s key personnel. The plan included three one-year earning periods, calendar years 2013, 2014 and 2015. The company’s Board of Directors decided on the earning criteria and the set targets at the beginning of each earning period. The potential performance-based reward for an earning period will be paid out in company shares and cash. The proportion to be paid in cash will cover the taxes and tax-related costs arising from the reward. The shares may not be transferred during the commitment period of approximately two years. If a key person’s employment or service contract ends during the commitment period, they will generally have to return any reward shares to the company without compensation.
As part of the plan the above mentioned key personnel has the opportunity to receive conditional reward, i.e. matching shares, on the basis of their share ownership and continued employment or service contract. In order to receive the conditional reward, a key person must already own or acquire a specified number of company shares, or a percentage thereof. The number and date are set by the Board of Directors. In this case, the key person will be granted, as a reward, one share for each share acquired, as long as their employment or service contract remains valid and they retain ownership of these shares until the conditional reward is paid. The earning period for the conditional reward was the calendar years 2013–2015.
Information concerning share-based incentive plans are presented below:
|Conditional reward||Performance-based reward|
|Grant date||13 Feb 2014||6 Feb 2013||4 Feb 2015||7 Feb 2014||7 Feb 2013|
|Earning period start date||1 Jan 2014||1 Jan 2013||1 Jan 2015||1 Jan 2014||1 Jan 2013|
|Earning period end date||31 Dec 2016||31 Dec 2015||31 Dec 2015||31 Dec 2014||31 Dec 2013|
|Commitment period end date||30 Apr 2017||30 Apr 2016||31 Dec 2016||31 Dec 2016||31 Dec 2015|
|Vesting conditions||Share ownership requirement||Share ownership requirement||Equity ratio, ROCE||Equity ratio, ROI||EBIT, ROI|
|Payment method||Cash & Equity||Cash & Equity||Cash & Equity||Cash & Equity||Cash & Equity|
|Share price at grant date, EUR||13.41||15.80||13.96||13.83||15.85|
|Fair value of share at grant date, EUR *||12.81||15.03||13.86||13.31||15.26|
|Amount of granted shares during period, maximum||266,074||259,730||205,591|
|Changes in number of granted shares, maximum||-12,686||-90,898||-3,449|
|Number of granted shares at the end of period, maximum||253,388||168,832||202,142|
|Number of shares earned at the end of period **||71,010||16,883|
|Matching shares subscribed at grant year||860||16,036|
|Number of plan participants at end of period||1||15||32||49||43|
|Assumed fulfilment of earning criteria, %||30.0||10.0||0.0|
|Estimated number of shares returned prior to the end of commitment period, %||10.0||10.0||10.0||10.0||10.0|
* The fair value of share at grant date is the share’s grant date value less estimated dividend payments during the earning period.
** Presented amounts are estimates. Actual amounts may differ from the amounts estimated at the end of earning period.
The accrued expenses from the share based incentive plans recognised in the income statement in 2015 were a total of EUR 0.5 million (0.3). The net liability recognised in the statement of financial position in respect of share-based incentive plan at the end of 2015 was EUR 0.1 million (0.1). The company estimates that expenses to be recognised in 2016 from incentive plans realised before 2016 will be approximately EUR 0.4 million. Actual amount may differ from the estimated amount.