Smurfit Kappa to commence buyback amid incentive plan for top managers

Packaging firm Smurfit Kappa will start a share buyback programme worth more than €40 million after issuing stock as part of an incentive plan.

The Dublin-based company will “commence a share buyback transaction of up to approximately 1.2 million” ordinary shares from Wednesday and cancel them, Smurfit Kappa said in a statement. The move is to “mitigate the dilution of shares issued on the vesting of awards under its performance share plan earlier this year,” it added.

At Tuesday’s closing price of €34.72, the buyback would be worth about €41 million.

More than 350 managers within Smurfit Kappa participate in the performance share plan, and they have the same targets as chief executive Tony Smurfit and chief financial officer Ken Bowles, according to the most recent annual report.

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Among the targets in the share plan for 2022 to 2024 are earnings per share of at least €9.35, return on capital employed of at least 15 per cent over three years and relative total shareholder return compared with a basket of peers including DS Smith and International Paper, among others.

A number of ESG-related targets are also listed, including reducing carbon dioxide emissions, seeing less waste disposed of in landfill, and reducing water discharge.

Smurfit Kappa shares rose 1.8 per cent in Dublin to €35.33. The stock is down 22 per cent in the past year.