Long-term share incentive plans

LTI 2022

In February 2022, The Board of Directors of Neste Corporation decided on the share-based long-term incentive scheme targeted to the management and selected key employees of Neste. The decision includes a Performance Share Plan (also “PSP”) as the main structure and a Restricted Share Plan (also “RSP”) as a complementary structure for specific situations.

The objectives of the share-based long-term incentive scheme are to align the interests of Neste’ management and key employees with those of the Company’s shareholders and, thus, to promote shareholder value creation in the long term, to commit management to achieving Neste’s strategic targets and to retain its key employees.

Performance Share Plan (PSP)

The Performance Share Plan consists of three annually commencing individual performance share plans, each with a three-year performance period, followed by the payment of the potential share reward. 

PSP 2022-2024

Performance measures are Relative Total Shareholder Return 2022–2024 (TSR, weight 80%) versus the STOXX Europe 600 index and Combined Greenhouse Gas Impact 2022–2024 (GHG, weight 20%) measured cumulatively in CO2 equivalent, shares will vest in March 2025, no holding period. 

Eligible to participate in PSP 2022‒2024 are approximately 150 individuals, including the members of Neste Leadership Team.

PSP 2023-2025

Performance measures are Relative Total Shareholder Return 2023–2025 (TSR, weight 80%) versus the STOXX Europe 600 index and Combined Greenhouse Gas Impact 2023–2025 (GHG, weight 20%) measured cumulatively in CO2 equivalent, shares will vest in March 2026, no holding period. 

Eligible to participate in PSP 2023‒2025 are approximately 150 individuals, including the members of Neste Leadership Team.

PSP 2024-2026

Performance measures are Relative Total Shareholder Return 2023–2025 (TSR, weight 80%) versus the STOXX Europe 600 index and Combined Greenhouse Gas Impact 2024–2026 (GHG, weight 20%) measured cumulatively in CO2 equivalent, shares will vest in March 2027, no holding period.

Eligible to participate in PSP 2024‒2026 are approximately 150 individuals, including the members of Neste Leadership Team.

Reward payment

Awards vest in one tranche after three years, partly in shares and partly in cash. The cash element will cover taxes and other tax-like costs. 

Employment

If the individual’s employment with Neste terminates before the payment date of the share reward, the individual is, as a main rule, not entitled to any reward based on the plan.

Restricted Share Plan (RSP)

The Restricted Share Plan consists of annually commencing individual restricted share plans, each comprising a restriction period with an overall length of three years (RSP 2022-2024, RSP 2023-2025 and RSP 2024-2026). The company may during the plan period grant fixed share rewards to individually selected key employees.

The purpose of the Restricted Share Plan is to serve as a complementary long-term retention tool for individually selected key employees of Neste for individual retention and recognition and in other specific situations.

Reward payment

Participant will receive gross earning, from which the applicable payroll tax is withheld, and the remaining net value is paid to the participants in shares.

Employment

A precondition for the payment of the share reward based on the Restricted Share Plan is that the employment or service of the individual with Neste continues until the payment date of the reward.

Other terms to long-term share incentive plans

The amount of rewards payable to participants based on Neste’s long-term incentive scheme is limited by a share price development-based pay cap, the level of which the Board of Directors sets. The level of the pay cap in the ongoing plans is two times the share price which prevailed at the beginning of the plan period. If Neste share price more than doubles during the plan, the exceeding value of the payable rewards will not be paid to the plan participants. 

Neste applies a share ownership policy to the members of the Neste Leadership Team. According to this policy each member of the Neste Leadership Team is expected to retain in his/her ownership at least half of the shares received under the share-based incentive programs of the company until the value of his/her share ownership in Neste corresponds to at least his/her annual gross base salary.