- The updated Share Allocation Rules and Group Remuneration Policy of Ignitis Group were approved at the General Meeting of Shareholders, which provide an opportunity for all employees to participate in the Stock Ownership Plan.
- Employee Stock Ownership Plan was created in a way that it would not affect the electricity tariffs for the customers.
- The plan is being initiated from 2021 by providing an option for employees to obtain their variable remuneration part in the form of shares after working for three years.
- Ignitis Group is one of the few companies in the Baltics that implemented such incentive system.
- Currently, the key executives of the Group are provided a long-term incentive plan with share options, which is linked to the implementation of strategic objectives
International energy company Ignitis Group has approved the updated Group Remuneration Policy. From now on, all employees of the Group, of whom there are over 3,800, will be able to be incentivised by the Stock Ownership Plan. This feature was approved on 25 March during the General Meeting of Shareholders (GMS).
Employee Stock Ownership Plan is not mandatory. The updated Ignitis Group Remuneration Policy provides that employees will be able to decide and choose themselves whether to keep using the traditional variable remuneration incentive system, or to participate in the new incentive system of Stock Ownership Plan. The plan is being initiated from 2021 by providing an option for employees to obtain their variable remuneration part in the form of shares after working for three years without interruptions at the Ignitis Group.
Ignitis Group is one of few companies in the Baltics that implemented such incentive system while Stock Ownership Plan was created in a way that it would not affect the electricity tariffs for the customers.
Option agreements will be concluded with the employees who chose the new incentive method every year. Their specific conditions will depend on the fixed base salary of a specialist, achievement percentage of set goals as well as share price parameters.
“The new Remuneration Policy and an opportunity for employees to participate in the Stock Ownership Plan indicated thereof was approved based on good corporate practices. The approval for the plan was also voiced by the trade unions of Ignitis Group companies. Such new measure to create incentive and improve engagement of employees will allow everyone who works everyday to contribute towards the implementation of ambitious goals of Ignitis Group to become the shareholders of the company”, said Živilė Skibarkienė, Ignitis Group Organisational Development Director.
The long-term incentive plan was first applied to the key executives of the Group, considering the experience of other international listed companies.
During the General Meeting of Shareholders the updated Ignitis Group Share Allocation Rules were also approved. One of the most important changes in the rules is that the key executives will be allocated shares only if the percentage growth of Adjusted EBITDA in Green Generation segment is at least 10 times higher compared to Adjusted EBITDA of regulated-monopolistic activities (percentage growth is calculated by comparing the Adjusted EBITDA of years indicated in the option agreement for which the long-term objectives (indicators) are set with the Adjusted EBITDA of the financial year preceding the option agreement).
Alternative prerequisite is the requirement that regulated-monopolistic activities account for less than 50% of the Group’s Adjusted EBITDA in 2024. If the latter or the former conditions are not met, the key executives will loose their right to obtain shares according to the option agreement.
Set out prerequisites will ensure that the company’s growth is related to increasing Green Generation capacity and commercial, rather than regulated activities. Ignitis Group Share Allocation Rules also stipulate the maximum amounts of the offered shares.
During the GMS, the shareholders also discussed other important questions to the company. Ignitis Group consolidated annual report for 2020 was approved, including the remuneration report, the set of audited financial statements for the previous year and the set of consolidated Ignitis Group companies’ financial statements were also approved. Furthermore, the shareholders approved the allocation of profit or loss project for 2020, which determined to allocate EUR 0.579 per share as dividends for the second half of 2020.
Dividends will be payed out to the shareholders in one month from the day of the general meeting of shareholders. They will be received by persons who will be shareholders at the end of day of 9 April 2021 – at the end of rights accounting day of the company’s shareholders.
During the meeting it was decided to also establish a reserve to acquire own shares. It must be noted that establishing the reserve does not mean that the acquisition of own shares will conducted, nor that the established reserve will be used. The company has yet to make decisions on the specific solutions for the implementation of acquisition of own shares. In case the reserves established earlier are not used and are not intended to be used, they can be reallocated when allocating the profit for the next financial year.