Download the guidelines on incentive pay at FLSmidth
Read the Remuneration Report 2020.
Short term incentive programme (STIP)
In 2019 and 2018, the allocation of cash bonus was tied to the following key performance indicators:
- Order intake
- EBITA margin
- Net working capital ratio
- Personal Key Performance Indicators
In 2020, the allocation of cash bonus will be tied to the same
key performance indicators as applied in 2019.
In the current bonus program, the payment of bonus is contingent upon the Company realising a positive cash flow (CFFO) at group level for the financial year in question.
- Long term incentive programs (LTIP)
In accordance with the guidelines for incentive pay adopted by the Annual General Meeting in 2015, the historical share option program is being phased out, while a new long-term incentive scheme based on conditional shares (performance shares) was introduced in 2016. Both programs are expensed over three years.
- Performance shares (introduced in 2016)
At the end of 2019, FLSmidth had granted a maximum of 396,510 performance share units to 298 key employees. Full vesting after three years will depend on achievement of stretched financial targets related to the EBITA margin and the net working capital ratio. The programme includes a
threshold for EBITA. If actual results are lower than the threshold, the entire award lapses. The effect of the plan on the income statement for 2019 was DKK - 13m (2018: DKK - 35m) (2017: DKK -21m).
- Share option plans (being phased out)
- At the end of 2017, a total of 194 key employees and managers are part of the share option plan which currently includes share options issued from 2012 to 2015. The Group’s share option plan includes a ‘change of control’-clause giving the holders the right to immediately exercise their options in connection with an acquisition.