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Remuneration of the other Executive Management Team members

Decision-making procedure concerning remuneration

The Personnel and Remuneration Committee of the Board of Directors of Suominen prepares the remuneration matters concerning the company’s Executive Management Team. The Personnel and Remuneration Committee continuously evaluates the appropriateness of their remuneration by assessing how their remuneration is positioned compared to the market and ensuring the remuneration is aligned with the company strategy and shareholders’ interests.

The Personnel and Remuneration Committee does not have independent decision-making power unless the Board of Directors resolves otherwise on individual matters. The Board of Directors determines the salary, bonuses and other benefits paid to the Executive Management Team members. The General Meeting or the Board of Directors authorized by the General Meeting decides on the issue of shares, stock options or other special rights entitling to shares to the Executive Management Team members. The Executive Management Team members are not involved in the decision-making regarding their own remuneration.

Main principles of remuneration

Suominen strives to have a remuneration system that incentivizes to pursue towards the company’s long-term financial performance and shareholder value creation. The company aims to offer remuneration that attracts, motivates and retains the best possible executives who drive Suominen’s performance and strategy in alignment with essential stakeholder interests. The goal is to ensure that the philosophy of paying for performance is applied to Suominen’s remuneration.

The current remuneration of the other members of the Executive Management Team consists of a fixed monthly salary and benefits, a performance-based bonus (short-term remuneration), and of share-based incentive plans (long-term remuneration). The remuneration system described above concerning the President & CEO applies also to the other members of the Executive Management Team, with the following exceptions:

• Short-term remuneration: For the financial year 2023, the potential reward is based, depending on the Executive Management Team member's role, on a selection of the following KPIs: Group EBITDA, Region EBITDA, Group Contribution Margin (CM), Net working Capital related KPIs and certain personal targets, and it may not exceed 50% of the annual base salary.
  
  

• Long-term remuneration through the Performance Share Plans: The potential rewards for other members of the Executive Management Team correspond to the value of an approximate maximum total of 182,500 shares from Performance Period 2021–2023, 142,000 shares from Performance Period 2022–2024 and 344,000 shares from Performance Period 2023–2025. Maximum total of shares includes also the proportion to be paid in cash. A member of the Executive Management Team must hold 50% of the net number of shares given on the basis of the Performance Share Plan, as long as his or her shareholding in total corresponds to the value of half of his or her annual gross salary.
  
  

• For other members of the Executive Management Team, the notice period is up to 6 months should either the company or the Executive Management Team member terminate the contract. Should the company terminate the employment, executives are entitled to a severance pay corresponding up to 3 months’ salary unless relevant local legislation dictates otherwise.
  
  

• Except for one Executive Management Team member, the other executives are not covered by any special supplementary pension schemes. Pension arrangements in countries without statutory pensions are arranged through Suominen’s normal supplementary pension programs.

 

Remuneration paid in the financial year 2023

The salaries and benefits paid to the other members of the Executive Team during 2023 totaled EUR 1,066,743, including benefits of EUR 88,078 and bonuses of EUR 57,886.

In 2023, the members of the Executive Team received in total EUR 548,417 (91,443 Suominen shares + cash proportion to cover taxes) as remuneration from the Performance Share Plan. In addition, the members of the Executive Team received in total EUR 20,000 of supplementary pension payments.