Vestas Wind Systems A/S, Aarhus, 19 April 2021
Company announcement no. 08/2021
 

The Board of Directors of Vestas Wind Systems A/S has decided to continue the share-based incentive programme for all participants, including all members of Executive Management, and launch a new programme for 2021 based on the terms and conditions governing the restricted performance share programme for the year 2020, however with the adjustments approved by the Annual General Meeting on 8 April 2021 as to be found in the updated Remuneration Policy, which can be downloaded from Vestas' website.

As previously, the programme is based on restricted performance shares and the performance will be measured over a period of three years, based on financial key performance indicators, as well as commercial targets defined by the Board of Directors.

• The shares will vest after three years (previously split between three and five years).
• A cap is introduced for the CEO and CFO, to the effect that the actual value of the shares vesting may not exceed 300 percent of their annual fixed salary.
• In addition to the standard allotment, the programme allows in extraordinary cases for an additional allotment of restricted shares which is not based on performance.

Details about the long-term incentive programme:

Participants All members of Executive Management as well as other specified
senior management level positions.
The programme for 2021 includes approx. 230 participants.
Number of The number of shares to be allocated is based on a defined
shares target level for each position. No payments for any vesting
are made by the participants. If all KPIs are reached on
target level, a total of 200,000 shares will be vesting from
the programme with a total value based on the current share
price amounting to EUR 33m (value at close of Nasdaq
Copenhagen on 16 April 2021).
The actual number of restricted performance shares available
for distribution may range between 0 and 150 percent of the
target level and is determined by Vestas' performance in the
financial years 2021, 2022, and 2023. The maximum grant of
shares under the programme in total is 300,000 shares.
The number of shares allotted to the registered members of the
Executive Management, (the CEO and CFO), will follow the
guidelines as described in Vestas' Remuneration Policy. The
CEO will for 2021 be allotted a target allocation of 15,000
shares and the CFO 7,500 shares for target achievement. The
2021 target number of shares corresponds to approx. 120
percent of the annual base salary for the CFO and 150 percent
of the annual base salary for the CEO. The value of the actual
number of shares vesting for CEO and CFO will be capped at a
maximum 300 percent of the annual base salary at time of
vesting.
The number of shares allocated will be affected by the share
split in the Vestas share at a ratio of 1:5 that will take
place in April 2021 as announced in Company announcement no.
07/2021 of 8 April.
Time of The restricted performance shares will be vesting in 2024.
vesting
Key The KPIs are based on financial targets, including Earnings
Performance per share (50 percent weight), Return on Capital Employed (30
Indicators percent weight), Vestas' market share (20 percent weight), as
well as commercial targets for a few relevant participants.
All KPIs and targets are defined by the Board of Directors.
The KPIs are expected to remain the same throughout all three
performance years. However, the Board of Directors will
annually evaluate the selected KPIs and may redefine or adjust
these for any individual performance year.
Each KPI pays out individually when reached at threshold level
as a minimum. If the KPI is not reached at the minimum
threshold requirement of index 50, the KPI will not result in
any pay-out for the given financial year.
Additional With the purpose of attraction and retention, additional
allotments shares can be allotted in extraordinary cases, serving as an
alternative to cash at sign-on or as retention.
The additional allotments are not adjusted for performance and
can be allotted to selected participants on top of their
standard allotment. These restricted shares will follow the
vesting period and all other terms and conditions for the
performance share incentives. The selected individuals and the
number of shares will be approved by Executive Management and
reported to the Nomination & Compensation Committee. For
members of Executive Management to be allotted such additional
non-performance-based shares, approval from the Nomination &
Compensation Committee will be required, and any allotment to
the CEO and CFO will be reported as part of the remuneration
report presented at the Annual General Meeting.
Conditions The restricted performance shares are governed by the specific
terms and conditions of the programme and subject to mandatory
law. If a participant chooses to leave Vestas before the time
of vesting, the participant's rights to receive the shares
will generally lapse.
Adjustments to The number of shares available for vesting may be adjusted in
the programme the event of changes in Vestas' capital structure. In
addition, calculation of the key performance indicators may be
adjusted for certain non-operational events. Further, in the
event of a change of control, merger, winding-up or demerger
of Vestas, an accelerated vesting may extraordinarily take
place. In the event of certain transfers of activities or
changes in ownership interests within the Vestas Group,
adjustment, replacement of the programme and/or settlement in
cash of the programme entirely or partly may also take place.

Contact details

Vestas Wind Systems A/S, Denmark
Mathias Dalsten, Senior Director
Investor Relations
Tel: +45 2829 5383