AB “Ignitis grupė” approved strategic long-term incentive plan targets

Ignitis grupė

On 23 May 2023, the Supervisory Board of AB “Ignitis grupė” (hereinafter – the Company) approved strategic long-term targets (hereinafter – Targets) and performance objectives for 2023–2026 and criteria for assessing the achievement of these Targets.

The Targets are linked to the 4-year targets that are set out in the Group’s strategic plans, with a major focus on increasing shareholder return and expanding commercial green generation:

			Strategic priority	Objective
				Weight	Entry (70%)	Target (100%) (equal to maximum)
	Performance		TRS  TSR of Ignitis Group vs. average TSR of EURO STOXX® Utilities Index1	40%	≥70%2	≥100%2
	Returns		Average adjusted ROCE3 over the four years 2023–2026	20%	6.5%2	7.5%2
	Growing renewables		Green generation installed capacity4, GW	20%	2.22	2.42
	Increasing Networks resiliency		Average electricity SAIFI5 over the four years 2023–2026 (per annum)	10%	≤1.09	≤1.05
	Targeting net zero emissions		GHG emissions reduction, 2026 vs. 20206	10%	-15%2	-27%2

1. TSR (Total Shareholders Return) is calculated as the ratio of the difference between the average share price at the end of the period and the beginning of the period and adding the amount of dividends per share over performance period to the share price at the beginning of the performance period. The average TSR (Total Shareholders Return) of Ignitis Group and EURO STOXX® Utilities Index is calculated in the two-month period (Nov and Dec accordingly) preceding the beginning and the end of the performance period (January 1, 2023–December 31, 2026), in order to neutralise any possible volatility on the market. TSR of Ignitis Group is calculated with the assumption that dividends are reinvested as well as EURO STOXX® Utilities Index used for benchmarking (based on gross return index type and EUR currency). Change in the value of the Ignitis Group shares between the beginning and the end of the reference period calculated as a weighted average of the IGN1L (Nasdaq Baltic) and IGN GDR (London Stock Exchange) prices based on volume traded.

2. Target will be measured according to the achievement scale with linear interpolation between the entry (70%) and target (100%) thresholds.

3. ROCE is calculated by dividing Ignitis Group adjusted earnings before interest and tax (adjusted EBIT) by its capital employed (average net debt at the beginning and end of the reporting period + average book value of equity at the beginning and end of the reporting period).

4. Gross installed capacity (COD reached), 2026.

5. Electricity SAIFI (System Average Interruption Frequency Index) is calculated based on the National Energy Regulatory Council methodology, excluding (1) interruptions due to natural phenomena corresponding to the values of natural, catastrophic meteorological and hydrological phenomena indicators; (2) interruptions due to failures in the network of the transmission system operator. Target objective is defined based on the decision of the National Energy Regulatory Council on January 26 of 2022 no. O3E-79.

6. Based on the Ignitis group GHG emissions level in 2020: 5.31m t CO2-eq. (excl. Vilnius CHP), targeted 2026 level: 3.9m t CO2-eq.

In accordance with the Remuneration Policy of AB “Ignitis grupė” group of companies, as approved by the decision of the General Meeting of Shareholders of the Company on 30 March 2023, a variable part of remuneration (hereinafter – LTV) is paid to the Group’s key executives for achieving long-term objectives.

LTV is applicable to nine key executives of the Group: members of the Management Board of the Company and CEOs of four Group companies (Ignitis Renewables, ESO, Ignitis Gamyba and Ignitis). LTV is paid after the entire 4-year strategic period ends.

Targets and performance objectives for other periods are published on the Group’s website and are included in the annexes to this notification.

For additional information, please contact:

Communications
Artūras Ketlerius
+370 620 76076
arturas.ketlerius@ignitis.lt

Investor Relations
Ainė Riffel-Grinkevičienė
+370 643 14925
aine.riffel-grinkeviciene@ignitis.lt

Attachments

• Ignitis Group_LTV Targets 2023-2026

• Ignitis Group_LTV Targets_2022-2025