Remuneration decision making protocol

Shareholders that represent over 50% of company’s voting rights shall propose to Annual General Meeting the composition and remuneration of the Board of Directors.

Based on Company’s HRRC Committee proposal, the Board of Directors shall decide on CEO’s remuneration as well as short- and long-term incentive plans and management’s share-based incentive programs.

Authorised by the Company’s Board of Directors, HRRC Committee decides nomination and remuneration of the Group Management Team (GMT) as well as their short-term incentive plans. Company CEO determines the targets for the GMT’s short-term incentive plan.

Annual General Meeting of the Company has authorised on 12.3.2020 the Board of Directors to acquire maximum of 415 560 company’s A-shares. These shares can be, if needed, be used as part of payment of company’s remuneration and incentive plan. Authorisation is valid for one (1) year from the decision of the General Meeting.

Main Remuneration principles

Remuneration of Board of Directors

Members of the Board shall be paid a monthly fee for being a Board member as well as annual fee for being in a Board Committee(s). No separate meeting fee shall be paid.

In the Annual General Meeting in 2020 it was decided that fees for the members of the Board shall be 3.400 Euro per month for the Chairman and 1.700 Euro per month for the Board members. In addition, Board members shall receive a Euro 1.600 per annum for being a member in a Board Committee(s).

The fees paid to the Chairman and to the members of the Board in 2020 totalled EUR 42 400 and EUR 130 400.

Remuneration of Group CEO and Management Team

CEO

Annual salary
CEO’s salary is based on full compensation basis, including the fixed salary and the fringe benefits. Fixed salary of Matti Rantaniemi in 2020 was 257 306 euros and fringe benefits of 14 040 euros. Fixed salary of Artti Aurasmaa in 2020 was 49 042 euros and fringe benefits of 50 euros.

Short- and long-term incentive plans
CEO is also compensated with short-term incentive plan, which is based on financial targets set by Company’s HRRC Committee. Time period for the short-term incentive plan is one year and it is paid annually. Maximum outcome from this incentive plan is 45% of the annual salary without the fringe benefits.

CEO’s long-term incentive plan consists of share-based incentive plan which is described in details under the section share based incentive plans.

Terms related to pension and termination of the position
Pension of the CEO is determined by the Finnish pension laws.

Termination of the CEO’s contract is for Company’s and for CEO 6 months. If contract is terminated by the Company CEO is entitled for additional 6-month severance pay without obligation to work for the Company.

Other Group Management Team members

Annual salary
Management team member salary is based on full compensation basis, including the fixed salary and the fringe benefits. Management Team members are also included into Company’s short- and long-term incentive plans.

Management Team’s Fixed salary in 2020, without the CEO, was 634 920 euro and fringe benefits of 11 146 euro.

Short- and long-term incentive plans
Management team is also compensated with short-term incentive plan, which is based on company’s financial and operational targets. Time period for the short-term incentive plan is one year and it is paid annually. Maximum outcome from this incentive plan is 30% of the annual salary without the fringe benefits.

Management team’s long-term incentive plan consists of share-based incentive plan which is described in details under the section share based incentive plans.

Share based incentive plans

Board of directors decided on December 14, 2016 on new share-based incentive plan directed to key employees of the company. Purpose of the plan is to unite shareholders and key employees’ objectives on long-term basis as well as to commit key employees to execute company’s strategy. Plan’s objective is to offer to key employees competitive model to earn company’s shares.

In the share-based incentive plan there is two separate earnings period, calendar years 2017-2018 and 2019-2020. Board of Directors decides the earning criteria and targets beginning of the earning periods.

Share based incentive plan 2017-2018
Target Group for the earning period was Company’s Management team. Criteria for the plan was tied to Company’s EBIT and maximum outcome for the plan was 100 000 Martela’s A shares.

Criteria for the plan was not achieved and no shares were allocated to the Management.

Share based incentive plan 2019-2020
Target Group for the earning period is Company’s Management team. Criteria for the plan is tied to performance of Company’s Revenue and EBIT. Performance is measured at end of the earning period. Maximum outcome for the plan is 100 000 Martela’s A shares and cash component covering the tax implication from received shares.

Criteria for the plan was not achieved and no shares were allocated to the Management.


Remuneration report 31 December 2020

Remuneration report 2020
Martela Oyj's Remuneration Policy 2020-2023