How is my gross reward calculated in the incentive plan?
Gross reward (total earned shares multiplied by the share price on the delivery date) earned in your incentive plan consists of share reward (delivered shares multiplied by share price) and cash reward. In addition, a possible transfer tax of 1.5% of the value of delivered shares will be paid and reported to the Finnish tax authorities on your behalf.
How are taxes handled for my reward?
As the gross reward is earned income your employer has withholding obligation on the reward. Therefore, part of the reward is normally paid in cash through your payroll to cover the taxes. In case your tax rate differs from what we have used it will be handled in your payroll. This means there will be either more taxes withheld from your salary or you will receive part of the cash reward back with your normal salary.
How is my gross reward divided between shares, cash, and transfer tax?
Your gross reward has been divided into share reward, cash reward and transfer tax as follows:
Delivered shares = Earned shares * ( 1- your tax rate) ) / (1 + 1.5%)
Share reward = Delivered shares * share price
Transfer tax paid = Delivered shares * Share price * transfer tax rate
Cash reward = Gross reward – share reward – transfer tax paid
Where can I find more information about my incentive plan?
Please also have a look at the plan-specific materials for more information.
How is the division of the gross reward illustrated?
Please have a look at the illustration below showing how the gross reward is divided into share reward, cash reward and transfer tax.