Fortum - Company Announcement

Fortum amended the structure of its long-term incentive, for key employees and executives, in order to better support enforcement of strategy

FORTUM CORPORATION STOCK EXCHANGE RELEASE 21 DECEMBER 2016 at 9.00 EET

The Board of Directors of Fortum Corporation has decided to continue the
long-term incentive (LTI) programme for selected key employees and executives
and amend the programme in order for the objectives of the programme to better
support the enforcement of the company’s strategy, delivery of sustainable,
long-term value enhancing performance, and to align the interests of the
executive management and key employees with its shareholders. In addition, the
LTI programme assists in committing and retaining key individuals. 

The LTI programme consists of annually commencing individual three-year share
plans during which the participants have the opportunity to earn shares of
Fortum as a long-term incentive reward if the performance targets set by the
Board of Directors are achieved. The potential share rewards will be delivered
after the three-year period. The commencement of each individual plan, its
performance targets, eligible participants and their earning opportunities are
subject to a separate decision of the Board of Directors. 

It is expected that there will be approximately 100 participants, including the
members of Fortum Executive Management (FEM), in the annually commencing
individual plans. 

The performance measures applied to the LTI programme for the earnings period
2017-2019 will be based on cumulative Earnings Per Share (EPS) over 3 years,
and the relative Total Shareholder Return (TSR) measured relative to the
European Utilities Group, both with an equal weight of 50%. The  potential
rewards from the 2017-2019 LTI plan will be paid in the spring 2020, if the
performance targets set by the Board of Directors are achieved. 

The Fortum Executive Management will be required to retain 50% of the shares
until they have achieved their required shareholding level of 100% of annual
salary. For other participants no lock-up requirement will be applied. As a
rule, no reward will be paid, if a person's employment or service ends before
the reward payment. 

The programme follows the Finnish government ownership guidelines for
management remuneration. The combined value of all variable compensation paid
to an individual participant under the long-term and short-term incentive plans
may not exceed 120 per cent of the person's gross annual fixed salary in any
year. 

The maximum number of shares that may potentially be delivered as a reward
under the individual plans, based on the currently prevailing price of Fortum’s
share, is expected not to exceed 700,000 shares per plan. 

Fortum Corporation

Board of Directors

Further information:

Sophie Jolly, Vice President, Investor Relations and Financial Communications,
tel. +358 10 45 32552

Jari Laitinen, Vice President, Compensation and Benefits
tel. +358 40 660 2506

Distribution:

Nasdaq Helsinki
Key media
www.fortum.com

Fortum
Fortum is a leading clean energy company which provides its customers with
electricity, heating and cooling as well as smart solutions to improve resource
efficiency. We want to engage our customers and society to join the change for
a cleaner world. We employ some 8,000 professionals in the Nordic and the
Baltic countries, Russia, Poland and India, and already 64% of our electricity
generation is CO2 free. In 2015, our sales were EUR 3.5 billion.