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 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 possible short-term incentive plans. Company CEO determines the targets for the GMT’s possible Short-term incentive plan.

Main Remuneration principles

Remuneration of Board of Directors

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

In the Annual General Meeting in 2021 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 1 600 Euro per annum for being a member in a Board Committee(s).

Remuneration of Group CEO and Management Team

CEO
CEO’s salary is based on full compensation basis, including the fixed salary and the fringe benefits. Fixed salary of Artti Aurasmaa in 2021 is 19 980,00 euros and fringe benefits of 20,00 euros per month.

CEO participates in Performance-based Matching Share Plan, which is described in detail under the section Share-based incentive plans.

Other Group Management Team members
Management team member salary is based on full compensation basis, including the fixed salary and the fringe benefits. Management team members participate in Performance-based Matching Share Plan, which is described in detail under the section Share-based incentive plans.

Management team’s fixed salary in 2020, without the CEO, was 634 920 euros and fringe benefits were 11 146 euros. Management team was not paid rewards based on incentive plans, since criteria for the plans were not achieved.

Share based incentive plans

Purpose of the share-based incentive plans is to unite shareholders and key employees’ objectives on long-term basis as well as to commit key employees to execute company’s strategy. Plans’ objective is to offer to key employees competitive model to earn company’s shares.

Board of Directors decides the earning criteria and targets beginning of the earning periods.

Share based incentive plan 2019-2020

Target Group for the earning period is Company’s Management team. Criteria for the plan was tied to performance of Company’s Revenue and EBIT. Performance was measured at end of the earning period. Maximum outcome for the plan was 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.

Performance-based Matching Share Plan 2021-2023
Target Group for the earning period is CEO, Management team and selected key employees. The earnings criteria of the plan are defined annually. For 2021, the earnings criteria is Company's operating result. The maximum amount of rewards based on the plan is 611 400 shares.

The prerequisite for participating in the new plan is that a participant has acquired the company’s series A shares up to the number determined by the Board of Directors. In order to implement the plan, the Board of Directors decided on a share issue against payment directed to the target group. The share subscription price for the new shares was EUR 2.73 per share, which is the same as the trade volume weighted average quotation of the share on Nasdaq Helsinki Ltd during 1 February-28 February 2021.

A maximum total of 359,000 new series A shares in the company were, in deviation from the shareholders’ pre-emptive right, offered in the share issue for subscription to the participants of the Performance-based Matching Share Plan 2021-2023. 305,700 of these shares were subscribed.

As part of the implementation of the Performance-based Matching Share Plan 2021-2023, the Board of Directors has resolved to grant plan participants interest-bearing loans in the maximum total amount of 686, 000 euros to finance the acquisition of the company’s shares. The maximum amount of the loan is 70 per cent of the participant’s investment in shares.

CEO’s share issue
In addition to share issue related to Performance-based Matching Share Plan, a total of 73,260 new series A shares have been offered for subscription to the company’s CEO, separately from the Performance-based Matching Share Plan. The CEO subscribed 46,740 shares and the share subscription price was EUR 2.73 per share


Remuneration report 31 December 2020

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