Long-term incentive plan for key personnel (2010)

The Board of Directors decided on 16 December 2009 to establish a share-based incentive plan for the Group’s key personnel – to align the objectives of Neste’s owners and key personnel through things such as increasing the value of the Company and committing key personnel to the Company by offering them a competitive reward plan based on owning Neste shares. The Board is responsible for annually selecting the members of Neste’s senior management entitled to participate in this plan (LTI scheme). Currently, approx. 70 members of Neste’s key personnel come within the scope of the plan. In the plan, the statement by the Cabinet  Committee on Economic Policy on 8 September 2009 was applied.

The plan included three three-year earning periods beginning in 2010, 2011, and 2012. The Board of Directors has decided the earnings criteria and targets to be met, as well as the maximum level of the reward payable, for each earning period in the December preceding each earning period. The earnings criteria for the 2010–2012, 2011–2013, and 2012–2014 periods were sales volumes at Renewable Fuels and the total shareholder return on Neste’s stock in relation to the Dow Jones Nordic Return Index.

Incentives from the first earning period were paid in 2013, 2014 and 2015 partly in Company shares and partly in cash. The maximum sum payable has not exceeded the annual gross salary of the year in question during any earning year. The proportion paid in cash covered taxes and any tax-related costs.

The plan prohibits the transfer of shares for a period of three years from the end of the earning period, i.e. the length of the plan is six years for each share allocation. Following this, key personnel must retain 50% of any shares received on the basis of the plan until the total value of the shares held corresponds to their annual gross salary. This obligation shall be valid for the duration of a person’s employment or service with the Group.

The criteria for the 2010–2012 earning period were partially met in respect of sales volume in the Renewable Fuels business. The total shareholder return on Neste´s stock in relation to the Dow Jones Nordic Return index failed to reach the threshold level, however. As a result, the equivalent value of around 130,000 shares of the 809,000 shares originally allocated was paid out as a reward for the 2010–2012 earning period in 2013.  President & CEO Matti Lievonen has been paid a gross reward equivalent to 22,500 shares. After taxes, President and CEO received 10,912 shares.

The criteria for the 2011–2013 earning period were met virtually completely in respect of sales volumes in the Renewable Fuels business. The total shareholder return on Neste’s stock in relation to the Dow Jones Nordic Return index was around 6%-points better than the difference in percentage yields. As a result, the equivalent value of a maximum of 420,000 shares of the 842,000 shares originally allocated were paid out as a reward for the 2011–2013 earning period in 2014. President & CEO Matti Lievonen has been paid a gross reward equivalent to 51,680 shares. After taxes, President and CEO received 24,064 shares.

The criteria for the last period (2012–2014) of the original LTI 2010 program, were fully met: The sales volume targets were exceeded and the share price continued to improve relative to the index. As a result, a total reward corresponds to 414,509 Company shares, of which 95,992 shares are awarded in 2015 to President &CEO and current NEB members. The number of shares delivered to President & CEO and NEB members after taxes is 46,142 of which President & CEO received 14,823.