Hello @Badwithmoney, @Sereno, and @Opa,
I believe this is an important discussion, and it’s good that shareholders want to engage in dialogue with the board. Compensation can be structured in various ways – of course, it always involves the owner giving up a small share in the hope that this investment will pay off in the long run. This is undeniably a topic with multiple perspectives, and it’s complex enough that there isn’t necessarily a right or wrong answer.
Therefore, it’s good to note that the overall picture might be slightly more nuanced than what has been brought up in the discussion.
Firstly, share-based compensation is not solely the company’s choice; financial sector regulation requires a significant portion of variable compensation to be paid in shares. The goal, in any case, is precisely to ensure a long-term alignment of interests between management and personnel with shareholders, and to curb excessive risk-taking.
Aktia has a share savings program for all employees called AktiaUna, where shares are subscribed for (at a slightly reduced price) using a portion of their salary. A large part of directed issues are for this purpose. If a Una-saver then holds their shares according to the program’s terms, they receive additional shares as a reward. In stock exchange releases, we disclose the purpose of issues and transfers.
Secondly, the “new shares vs. shares bought from the market” dichotomy presented in the discussion is a slight simplification from an economic standpoint. In both options, a cost arises for shareholders – the difference is mainly whether it appears as dilution or as a reduction in cash reserves and distributable capital. The latter, in turn, can reflect, for example, on the company’s capital, dividend distribution capacity, and thus also on the share’s valuation.
Thirdly, it’s worth noting that directed share issues for compensation purposes are both compliant with the Companies Act and widely established market practice. They are specifically used in situations where there is a weighty financial reason, such as incentive schemes.
Furthermore, on a practical level, the alternative where shares are acquired from the market is not entirely straightforward: it requires, among other things, regulatory approvals for the bank and incurs transaction costs and potential market impacts. In addition, stamp duties generate costs.
In summary, it could be said that the question is not so much about a “good vs. bad” solution, but rather about the balance between different implementation methods. Both methods have their effects, and therefore it has generally been considered justified that the board retains the flexibility to use the most appropriate solution at any given time from the perspective of the shareholders’ overall interest. Different types of owners may also have different wishes: for some, dividends may be most important, for others not. This therefore requires balancing.
However, this discussion is a dialogue between the board and shareholders, which I hope can be conducted constructively and without causing antagonism. Ultimately, the goal of all parties is the success of the company and its owners.
Have a nice rest of the week!
Regards,
OT/Aktia IR