Finnair extends incentive plan to management and expert growth

Tuesday, February 20, 2024

Enhanced Performance-based Incentive Plan for Management and Experts.In alignment with Finnair’s commitment to fostering long-term growth and enhancing shareholder value, the Board of Directors has approved an upgraded Individual Performance Share Plan spanning the years 2024–2026. This revamped plan is designed to not only reward high performance but also drive strategic objectives, ensuring sustainable growth and retention of top talent across various managerial and expert roles within the company.

Key Features of the Plan:

1. Long-Term Incentive Rewards: Participants, including members of the Finnair Executive Board, management, and experts, have the opportunity to earn Finnair shares based on achieving predetermined performance targets established by the Board of Directors.

2. Performance Period and Reward Delivery: The plan operates on a three-year performance cycle, with share rewards granted to participants in one tranche following the completion of each performance period. These shares become available for participants’ unrestricted use upon delivery, enhancing alignment with long-term goals. Share rewards for the 2024–2026 performance period will be distributed in the spring of 2027.

3. Retention Measures:To further align interests with shareholders and ensure sustained commitment, members of the Executive Board are required to retain a minimum of fifty percent of the net shares received until their share ownership in Finnair equals or exceeds their annual gross base salary.

4. Compensation Limitations: To maintain fairness and balance, the maximum combined value of variable compensation for any participant in a given year is capped at one hundred and twenty percent of their annual gross base salary.

5. Performance Criteria:The performance targets for the 2024–2026 plan encompass key metrics crucial to Finnair’s success, including earnings per share, free cash flow, and CO2 emissions per revenue ton kilometer (CO2/RTK), indicative of fuel efficiency. By focusing on these metrics, the plan promotes financial health, operational efficiency, and environmental sustainability.

6. Maximum Share Allocation:If the performance targets for the 2024–2026 period are fully met, the plan allows for the delivery of approximately 118,000,000 shares. These shares represent gross earnings, with applicable payroll taxes deducted before delivery of the net value in shares to participants.

7. Inclusivity: Approximately 75 eligible employees, comprising management and experts vital to Finnair’s success, have the opportunity to participate in the 2024–2026 plan, fostering a culture of performance excellence and inclusivity across the organization.

By introducing these enhancements to the Performance Share Plan, Finnair aims to reinforce a culture of accountability, performance-driven growth, and shareholder value creation, while also emphasizing sustainability and responsible stewardship in its operations.

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