Yahoo Finance 
Vilnius District Court dismissed the case on the incentive share options programme for employees of AB “Ignitis grupė”
On 22 April 2022 the Vilnius District Court (hereinafter – the Court) approved the settlement agreement concluded between AB “Ignitis grupė” (hereinafter – the Group), a Prosecutor of the Vilnius District Prosecutor's Office (hereinafter – the Prosecutor), who defended the public interest, and the Ministry of Finance of the Republic of Lithuania and dismissed the civil case on the incentive share options programme for the employees and executives of the Group (hereinafter – the Programme). Under the settlement agreement, the Prosecutor has abandoned the claims brought against the Group and the Ministry of Finance of the Republic of Lithuania. The parties have also agreed under the settlement agreement to waive any current or future claims regarding the basis and subject matter of the case.
The parties decided to resolve the dispute in the most reasonable and economic manner, considering the Group’s decision to terminate the suspended Programme. In May 2021, the top executives of the Group terminated the concluded executive option agreements on their own initiative, and, in March this year, the collegial bodies of the Group annulled other documents disputed in the claim. The decision to abandon the suspended Programme was made because (i) the Programme was actually suspended and was not implemented; (ii) after the Programme was approved, the legislative changes have been initiated, causing too much uncertainty regarding the ability to implement the Programme in the future, and the Group aims to have an operating incentive programme ensuring the achievement of long-term objectives. The Group’s Supervisory Board is planning to look for alternative measures to ensure the achievement of long-term objectives.
It must be noted that, after the Programme was approved, the Audit Committee of the Parliament of the Republic of Lithuania expressed a clear position and will eliminate any possibilities in the future to incentivise the employees and members of management bodies of state-owned enterprises by allocating shares of the company to them, and the Ministry of the Economy and Innovation of the Republic of Lithuania, following the order, registered a draft amendment of the Law on Companies (hereinafter – LoC) in December 2021, one of the objectives of which was to make sure that the provisions of LoC related to incentivising employees with share options do not apply to companies such as the Group.
Despite the fact that the Programme has now been abandoned, the Group maintains its position that the incentive share options programme is in line with the best international practices, which are applied in the most advanced and best-governed companies in the world. It is a standard practice in the EU, applied both in state-owned enterprises and international energy companies.
Meanwhile, there are few state-owned enterprises such as the Group in Lithuania that are listed (public companies whose shares or part thereof are listed publicly for trading in stock exchanges), therefore, the practice of incentivising with share options is still new in Lithuania and raises many questions for the authorities and the public. The Group intends to continue the discussion with the legislator, the authorities, and the public in order to clarify the principles and future legal regulation of such programmes.
We hope that incentivising with share options will be successfully implemented in Lithuania in the near future, including state-owned enterprises that are listed publicly on the stock exchanges.
For more information please contact:
Artūras Ketlerius
Head of Public Relations at Ignitis Group
arturas.ketlerius@ignitis.lt
+370 620 76076
