Update: Regarding the rebuttal of information provided about the long-term motivation with share option agreement programme of key executives of AB “Ignitis grupė” group of companies published by VšĮ “Lietuvos nacionalinis radijas ir televi
Updated the last paragraph
On 29 December 2020 a VšĮ “Lietuvos nacionalinis radijas ir televizija” (hereinafter – LRT) published in their news portal a misleading and false information in the audio reporting Sočios šventės “Ignitis grupės” vadovams: dykai gaus akcijų už 200 tūkstančių eurų (Translation: Filling holidays for executives of Ignitis Group: will get shares for 200,000 euros gratis) by LRT journalist Marius Jokūbaitis (hereinafter – the Publication), where it provided information about the long-term motivation with share option agreement programme of key executives of AB “Ignitis grupė” group of companies.
AB “Ignitis grupė” (hereinafter – Ignitis Group or the Company) states that the Publication creates a false and biased impression of the long-term motivation with share option agreement programme for the key executives of the Ignitis Group group of companies.
Ignitis Group, in order to ensure that the Publication would not mislead the investors and other market participants, states here the rebuttal regarding the misleading claims and information and additionally explains the long-term promotion of executives with share options programme (hereinafter – the programme). The programme was initiated with the prospectus of initial public offering of Ignitis Group (IPO), after evaluating good practices of listed companies which would encourage the alignment of interests of the Company and shareholders. The programme was announced for the first time in 17 September, with the Share Allocation Rules to Employees and Executives (link), which became effective since the day of including the Company’s shares into the AB Nasdaq Vilnius official trading list. Later the programme was announced on 4 December, on 18 December concluded options agreements with the member of the Board of the Company were announced and, on the same day, the conclusion of option agreements with key executives of the Company were also announced.
The beginning and the name of the Publication falsely states that the executives of Ignitis Group dykai gaus akcijų (Translation: will receive shares for nothing/gratis) while in fact, as stated by the Company earlier, the decision to allocate or not to allocate shares the Supervisory Board of Ignitis Group will make only in 2024. It is notable that the option agreements are agreements of ability to choose the right to obtain the shares in the future, ie, in this case, only in 2024 and only if the long-term strategic goals and their indicators are met. The concluded option agreements, as stated in previous notices of the Company, means that the executives will receive the right to obtain shares if the goals of 2020–2023 are achieved, whose achievement will be evaluated in 2024. In other words, shares would be allocated only in 2024 if the indicators set for the end of 2023 are achieved.
The Publication provides misleading information about the link of long-term goals set to the executives of the Company for 2020–2023 and the end of term of the respective executives. It is notable that the programme is designed to ensure the sustainable Company’s activity performance and its continuity and not to achieve short-term results. Should the strategic direction change after the change in management and this would result in failure to achieve previously-set goals, the managers could not obtain shares. Therefore, in order to ensure the interests of investors and achieve the long-term goals and results’ forecast set in the programme, a directive approach, which is not associated with the terms of management bodies, is necessary.
The allocation of shares to the managers for the achieved goals is based on good international practice, applied in publicly listed companies (applied in companies of energy sector like Orsted, Enel, Endesa, Naturgy, Iberdrola, Eon, EVN, etc). Good practice indicates that such promotion programme ensures that the interests of shareholders and managers align, increases motivation to achieve long-term goals by ensuring higher share value and returns to shareholders.
The Publication is also filled with interpretative and judgemental expressions which the Company considers to be biased and misleading, contrary to what the Company published on the stock exchange in accordance with the procedure established by legal acts, as factual and correct information for investors. Ignitis Group seeks to guarantee the protection of investors' rights and interests, to create equal conditions for them to make decisions of investment, to ensure that investors are not misled, therefore it will inform the supervisory authorities about misleading information published in the Publication.
For more information please contact:
Artūras Ketlerius, Head of Public Relations
Tel. +370 620 76076