October 13, 2014

Finnair Board of Directors approves incentive plan for pilots

The Finnair Board of Directors has approved a one-off long-term incentive plan for Finnair pilots. The plan is a part of the savings agreement between Finnair and the Finnish Air Line Pilots’ Association (SLL) that brings Finnair €17m in permanent annual savings. The savings agreement was contingent on the realization of the incentive plan. The plan period is 2015-2018 and the prerequisite for rewarding pilots based on this plan is the materialization of the agreed cost savings over this time period. In addition, the company share price must at least be €4 at the end of the incentive plan. If these conditions are met, the pilots are entitled to a cash payment. The amount of the payment is based on the Finnair share price. The total reward to pilots amounts to €12m if the share price is €4 or a maximum of €24m, if the share price reaches at least €8. Divided over the four year period, the annual earnings potential for an individual pilot is equivalent to 5-10 per cent of annual base salary. Finnair plans to hedge the additional costs above the € share price with a market-based call option. If the conditions of the plan are met, the associated total cost over the four year period is thus limited to approximately €12m. The closing price of Finnair share was €2.39  on October 10th, 2014. The number of pilots eligible to participate in the plan is approximately 700. The cash reward will be paid to pilots in spring 2019, provided that the aforementioned performance criteria are met.



Your Email*

Friend's Email*

Your Remark

Antispam question*
5+7=?