Incentive plan 2019–2026
In June 2019, SRV’s Board of Directors decided on a share-based incentive plan for the President & CEO for 2019–2026. The terms of the plan were amended following the rights issue carried out in 2020.
Under the plan, the President & CEO was given 1,000,000 acquisition rights, entitling him to acquire the number of SRV shares corresponding to the acquisition rights at a price of EUR 0.55 per share. The acquisition rights had three exercise periods: 1 March 2022–28 February 2023, 1 March 2023–31 August 2024 and 1 September 2024–31 August 2026. During the first and second exercise periods, the President & CEO was entitled to exercise 300,000 acquisition rights and during the third period 400,000 acquisition rights. The acquired shares would have been subject to a transfer restriction, valid for two years from the acquisition of the shares.
On 1 February 2023, the Board of Directors decided to cancel the incentive plan 2019–2026 and annul the acquisition rights granted to the President & CEO under it. The Board concluded that keeping the incentive plans in place could no longer be justified in view of the financial arrangements made by the company to strengthen the balance sheet in 2022 and the effect of these arrangements on, among other things, the number of shares in the company. At the time of the Board’s decision to cancel the plan, the President & CEO had not exercised any of the acquisition rights he had been granted under the plan.
Incentive plan 2021–2025
The President & CEO participated in the long-term share-based incentive plan 2021–2025 that had been decided on by the Board of Directors on 29 March 2021.
The first two earning periods of the 2021–2025 incentive plan were 2021–2023 and 2022–2024. Incentives paid as part of the earning periods 2021–2023 and 2022–2024 would have been based on the company’s total shareholder return (TSR) in relation to a separately selected reference group, the company’s indebtedness and the increase in share price. The maximum incentives of the President & CEO for each earning period would have corresponded to the value of about 450,000 SRV shares (gross amount from which withholding taxes would have been deducted). It was intended that any incentives would have been paid in 2024 and 2025. The potential equity bonus of the President & CEO would have been subject to a transfer restriction whereby he must have held these shares for a period of two years after being awarded.
The Board of Directors decided to cancel the incentive plan 2021–2025 on 1 February 2023. The Board concluded that keeping the incentive plans in place could no longer be justified in view of the financial arrangements made by the company to strengthen the balance sheet in 2022 and the effect of these arrangements on, among other things, the number of shares in the company. Due to the cancellation of the plan, no incentives will be paid for the 2021–2023 and 2022–2024 earning periods that had commenced.
One-off incentive plan 2021-2022
The President & CEO participated in the one-off long-term incentive plan 2021–2022 decided on by the Board of Directors on 29 March 2021.
The incentive plan had one two-year earning period, the calendar years 2021–2022. On 1 February 2023, the Board of Directors confirmed the incentives to be paid to the individuals covered by the incentive plan in respect of the 2021–2022 earning period. The incentives were based on the Group’s operative cash flow and the company’s total shareholder return (TSR) over a two-year period. Changes in the company’s number of shares resulting from SRV's reverse share split on 4 July 2022 were taken into account in calculating the amounts of incentives in accordance with the terms and conditions of the incentive plan. In accordance with the terms of the incentive plan, the Board decided to pay the incentives entirely in cash.
The maximum incentives of the President & CEO under the plan amounted to about 450,000 SRV shares (gross amount from which withholding taxes will be deducted) before accounting for the reverse share split on 4 July 2022 and 11,250 SRV shares (gross amount from which withholding taxes will be deducted) after accounting for the reverse share split. Converted into cash, the amount to be paid to the President & CEO from the incentive plan is EUR 20,362 (gross amount from which withholding taxes will be deducted). The plan incentives were paid to the President & CEO in April 2023.