Long-term incentive program 2020
There is currently a long-term cash based incentive program for senior executives and key employees in place (“LTI program 2020”), comprising up to 25 participants. Subject to the fulfilment of certain predefined performance targets, participants in the program may be entitled to receive a cash award at the end of a three-year period. The measurement period for the fulfilment of the targets is one year. The performance targets are:
(i) Earnings per share
(ii) Operating cash flow after investments
The Board of Directors will set maximum and minimum level for each of the performance targets (i) and (ii). If the maximum performance level is reached or exceeded, the cash award will amount to (and will not exceed) the maximum cash award that may be paid under the program. If performance is below the maximum level but exceeds the minimum level, a proportionate payment of the cash award will be made. No payment will be made if performance is at or below the minimum level. For any payment to be made, the participant must also, as a general rule, remain employed during the entire three-year period. The size of the maximum cash award is dependent on the participant’s position and may amount to a maximum of 100 percent of the annual base salary.
The participants are required to purchase shares for any cash award received under the program, net any income tax, and hold such shares for a period of two years after purchase. The purpose of the LTI program 2020 is thus for the participants to build up a shareholding in the Company in order to create a common interest between the participants and the shareholders of a good long-term development for Electrolux Professional.
The total estimated cost for the LTI program 2020 is SEK 15.5m excluding social security costs (based on a maximum number of participants and that the performance level is at midpoint). The total estimated maximum cost for the LTI program 2020 is SEK 31m excluding social security costs (based on the maximum number of participants and maximum performance level (100 percent of the maximum)).