The new plans commencing in 2026 within UPM share incentive arrangements
UPM-Kymmene Corporation Stock Exchange Release (Other information disclosed according to the rules of the Exchange) February 4, 2026 at 14:00 EET
HELSINKI, Feb. 4, 2026 /PRNewswire/ -- The new plans commencing in 2026 within UPM share incentive arrangements
Performance Share Arrangement and Deferred Bonus Arrangement
UPM's Board of Directors has approved the commencement of new plans for the period 2026-2028 within the company's two long-term share incentive arrangements: the Performance Share Plan and the Deferred Bonus Plan.
The long-term share incentive arrangements consist of annually commencing new plans subject to the approval of the Board of Directors of UPM in each case.
The Performance Share Plan is targeted at the President and CEO, Group Executive Team members and other selected members of the senior management. The Deferred Bonus Plan is targeted at other key employees.
The earning criteria for the earning period 2026-2028 of the Performance Share Plan are relative total shareholder return, adjusted ROCE and selected sustainability performance measures during 2026-2028. Sustainability measures comprise the reduction of fossil CO2 emissions from UPM's on-site combustion and purchased energy, the achievement of a net positive impact on biodiversity in the Company's own forests in Finland and the achievement of gender pay equity globally.
The earning criteria for the Deferred Bonus Plan are based on the Group and each business area's EBITDA. The plan for the period 2026-2028 consists of a one-year earning period (2026) and a two-year restriction period following thereafter (2027-2028).
The share incentive plans for the period 2026-2028 cover in total 346 participants. In case all the set performance targets are met in full, the estimated total maximum number of shares to be delivered under these plans is approximately 1,306,000 shares. The above indicated estimate of the maximum share rewards represents the gross value of the rewards of which the applicable taxes will be deducted before the shares are delivered to the participants.
Share delivery will be executed by using already existing shares and the plans, therefore, have no dilutive effect. Besides the attainment of the performance criteria the share reward under both plans is subject to the continuation of the employment. The share rewards earned on the basis of the plans for the period 2026-2028 will be delivered in 2029.
Restricted Share Arrangement
UPM's Board of Directors has approved the commencement of new plan for the period 2026-2029 within the company's Restricted Share Arrangement.
The Restricted Share Arrangement consists of annually commencing new plans subject to the approval of the Board of Directors of UPM in each case.
The Restricted Share Arrangement is used as a commitment instrument for individually selected participants in specific recruitment and retention situations. The Restricted Share Arrangement is targeted at the President and CEO, Group Executive Team members and other selected members of the senior management. The President and CEO is not eligible to receive a reward from this Arrangement for retention purposes.
The plan for the period 2026-2029 consists of four consecutive years and is divided into the grant period and the vesting period. The grant period comprises the first year of each plan (2026) during which rewards can be granted to the participants. Vesting period comprises the three-year period following the end of a grant period (2027-2029) during which share rewards are delivered in instalments to the participants. The first instalment of the reward shall be delivered no earlier than one year after the date the participant was nominated to the plan.
The share rewards based on the plan 2026-2029 will be delivered to participants in instalments by the end of 2029. Share delivery will be executed by using already existing shares and, therefore, has no dilutive effect.
The maximum number of shares that may be granted under the Restricted Share Plan 2026-2029 is 500,000 shares (gross). The maximum number of shares represents the gross value of the rewards of which the applicable taxes will be deducted before the shares are delivered to the participants. No earning criteria is applied to the Restricted Share Arrangement, and the delivery of the share reward is subject to the continuation of the employment or service.
Employee Share Savings Arrangement
UPM's Board of Directors has approved the commencement of new plan for the period 2026-2029 within the company's Employee Share Savings Arrangement.
The Employee Share Savings Arrangement consists of annually commencing new plans subject to the approval of the Board of Directors of UPM in each case.
The Employee Share Savings Arrangement is targeted at employees of UPM-Kymmene Corporation and its subsidiaries in the countries where it is legally and administratively feasible.
The purpose of the arrangement is to engage company employees, increase their interest in company performance and long-term value creation and to align the interests of employees and shareholders.
The Employee Share Savings Arrangement consists of annually commencing plans, each one comprising of a 12-month savings period and a two-year holding period following the savings period. The employees will have an opportunity to save a proportion of their salaries and invest those savings in UPM shares. The savings will be used to acquire UPM shares from the market quarterly after the publication dates of the respective interim reports. As a reward UPM grants the participating employees a gross reward of one (1) matching share for each two (2) savings shares acquired with their savings. The delivery of the share reward is subject to the continuation of the employment or service and holding of acquired savings shares for the duration of the holding period. Additionally, each employee participating in the arrangement for the first time will be rewarded with ten (10) free gross shares after the 12-month savings period in July 2027, provided that the employee has not stopped their savings during the savings period and is employed the whole savings period. The applicable taxes will be deducted before the shares are delivered to the participants. Share delivery will be executed by using already existing shares and the arrangement, therefore, has no dilutive effect.
The savings period is from 1 July 2026 to 30 June 2027. The holding period starts at the initial acquisition of savings shares and ends on 30 June 2029. The maximum monetary amount that all participants collectively may save during the savings period is EUR 17,6 million. The calculatory maximum number of matching shares (gross) and free shares (gross) for the first plan is approximately 422,300, calculated at the prevalent share price provided that the plan limit is met. The estimated maximum expense for the plan, based on UPM's current share value, is EUR 11,7 million in total. The final number of matching shares depends on the employees' participation and savings rate in the arrangement, and the fulfilment of the prerequisites for receiving matching shares, as well as the number of shares acquired from the market with savings. The final number of free shares depends on the employees' participation and the fulfilment of the conditions for receiving free shares.
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UPM
UPM is a material solutions company, renewing products and entire value chains with an extensive portfolio of renewable fibres, advanced materials, decarbonization solutions, and communication papers. Our performance in sustainability has been recognized by third parties, including EcoVadis and the Dow Jones Sustainability Indices. We operate globally and employ approximately 15,100 people worldwide, with annual sales of approximately €9.7 billion. Our shares are listed on Nasdaq Helsinki Ltd.
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