Incentive Systems
Management Share-Based Incentive Plan
On June 19, 2023, the Board of Directors of Bittium Corporation decided on the establishment of a new share-based long-term incentive scheme for the Company’s management. It comprises a Performance Share Plan (“PSP”). The objectives of the PSP are to align the interests of Bittium’s management with those of the Company’s shareholders and, thus, to promote shareholder value creation in the long term, to commit the management to achieving Bittium’s strategic targets and the retention of Bittium’s management.
The PSP consists of three annually commencing three-year performance share plans, PSP 2023–2025, PSP 2024–2026, and PSP 2025–2027, each with a one-year performance period, which is followed by the payment of the share reward and a two-year transfer restriction period. The commencement of the following two plans, PSP 2024–2026, and PSP 2025–2027, is, however, subject to a separate Board decision.
Eligible to participate in the first plan, PSP 2023–2025, are the members of Bittium’s Management Group. The performance measure based on which the potential share reward under the first plan, PSP 2023–2025, will be paid is the revenue growth of Bittium. A precondition for the payment of the share reward is, in addition, that the employment relationship of the participant with Bittium continues at the time the reward is paid. The potential reward will be paid in shares of Bittium and in cash.
The aggregate maximum number of shares to be paid based on the whole PSP is 750,000 shares (gross before the withholding of the applicable taxes). The aggregate gross value of the plan, estimated based on the volume-weighted average quotation of Bittium’s share during the year 2022, is approximately EUR 3.5 million.
More information about the share-based incentive system can be found on the company’s website at https://www.bittium.com.
A One-Off Matching Share Plan for the CEO of Bittium Corporation
On April 27, 2023, the Board of Directors of Bittium Corporation decided on the establishment of a one-off fixed Matching Share Plan for the Chief Executive Officer (CEO) of Bittium. The aim of the Plan is through share ownership to align the interests of the CEO with those of the company’s shareholders and to promote shareholder value creation in the long term as well as the retention of the CEO with the company.
The fixed Matching Share Plan was a one-off plan, in which the CEO was expected to purchase shares of Bittium Corporation with at least the value of 200,000 euros at a price formed in public trading on Nasdaq Helsinki. The shares were purchased after the publication date of Bittium Corporation’s Business Review January-March 2023. Bittium Corporation matched the share investment by way of the CEO received matching shares without consideration with a net value of 100,000 euros. The matching shares were paid in listed shares of Bittium Corporation. In addition to the matching shares, the company paid the payroll tax and other taxes and tax-like charges payable in connection with the Plan. Based on the current value of the company’s share the estimated aggregate number of matching shares to be delivered under the Plan was approximately 25,000 shares. The matching shares received by the CEO based on the Plan will be subject to a transfer restriction (lock-up) of three years.
On June 1, 2023, Bittium Corporation announced that it had transferred a total of 23,854 of its own shares held by the company free of charge as a share bonus to the company’s CEO based on a fixed-amount additional share program. The transfer of own shares was carried out as a directed free share issue decided by Bittium Corporation’s Board of Directors. The Board’s decision was based on the share issuance authorization given by the annual general meeting on April 12, 2023.
Other Incentive Systems
In addition, the company has a performance bonus system, the reward of which is paid based on the achievement of goals, as well as a profit-sharing plan, which applies to all personnel, excluding those covered by other short-term bonus systems.