An international energy company Ignitis Group is planning to submit the General Meeting of Shareholders a proposal to dismiss the no-longer-effective programme for employee incentive by share option agreements. The Group Supervisory Board is planning to look for alternative measures for ensuring the achievement of long-term goals in order to meet shareholders’ expectations.
The Ignitis Group Supervisory Board proposed the Group Management Board to supplement the agenda of the General Meeting of Shareholders to be held on 29 March with items on the updated Remuneration Policy regarding the dismissal of incentives by means of share option agreements, and also the declaration of the Group Share Allocation Rules as no longer effective.
As the Group announced earlier, the share option agreement incentive programme was implemented after the investors expressed expectations, in the context of the Initial Public Offering (hereinafter – IPO), in connection to the purpose to align the expectations of investors and shareholders by implementing good governance practices within the Group.
Ignitis Group is confident that the share option agreement incentive programme complies with both the best international practices as well as the then-effective legislation of the Republic of Lithuania, however, due to the interim measures applied due to the ongoing civil case, this option agreement programme is considered as no longer effective. The Group announced about the interim measures in the notice published on 13 May 2021 (link).
It must be noted that on May 2021 the Audit Committee of the Parliament of the Republic of Lithuania submitted a clear opinion that incentivising employees by allocating them shares of the company should not apply to the state- and municipality-owned companies, and the Ministry of the Economy and Innovation published a draft amendment of the Law on Companies (LoC) on December 2021), one of the objectives of which was to ensure that companies such as the Group would not be able to apply provisions related to incentives by means of share option agreements. Meanwhile, the Group aims to have an operating measure for ensuring the achievement of long-term goals and, thus, among other things, creating the greatest possible value to the Group, its employees and shareholders (i.e., including the State).