Remuneration of the President and CEO
The Board of Directors decides on the remuneration, benefits and other terms of employment of the President and CEO based on the preparatory work by the Remuneration and HR Committee and in accordance with the guidelines set forth in this Remuneration Policy presented to the General Meeting. External market data is used to support the process according to our remuneration principles. The Board determines the total remuneration elements of the President and CEO based on market benchmarking and other relevant information available.
The remuneration of the President and CEO is comprised of the total salary (monthly base salary and customary fringe benefits, such as a car and a mobile phone, in accordance with local legislation and market practice), short- and long-term incentives, pension benefits and customary insurances. The fixed annual base salary of the President and CEO in 2024 is EUR 900,000. The maximum relative proportion of the variable pay elements of the President and CEO is 2–3 times the fixed salary.
Long-term incentive plan, Performance Share Plan
In December 2020, the Board of Directors of Valmet Oyj approved a long-term share-based incentive plan, the Performance Share Plan, for Valmet's Executive Team members. The plan includes a three-year performance period parallel to a one-year performance period. Valmet's Board of Directors decides on the predefined performance measures and targets in the beginning of each performance period.
The potentially earned share reward represents a gross reward from which the applicable payroll tax is withheld, and the remaining net balance is paid to the key employee in shares.
Performance share plan
|
Performance period |
2022 |
2022–2024 |
2023 |
2023–2025 |
|
Incentive based on |
Comparable EBITA as a percentage of net sales, and orders received growth (%) in the stable business (Services and Automation business lines) |
ESG Index, targets linked to implementing Valmet’s Climate Program and Sustainability Agenda |
Comparable EBITA as a percentage of net sales, and orders received growth (%) in the stable business (Services and Automation segments) |
Development of a valuation multiple of Valmet’s share in comparison to peer group |
|
Reward payment |
In spring 2023 |
In spring 2025 |
In spring 2024 |
In spring 2026 |
|
Total number of shares |
17,618 | 7,820 | 35,352 | 11,784 |
|
Restriction period |
Two years |
None |
Two years |
None |
|
Performance period |
2024 |
2024–2026 |
|
Incentive based on |
Comparable EBITA margin and orders received growth (%) of the stable business (Services and Automation segments) |
Development of a valuation multiple of Valmet’s share in comparison to peer group |
|
Reward payment |
Deferred payment in spring 2027 |
In spring 2027 |
|
Total number of shares |
39,554 | 13,185 |
|
Restriction period |
None |
None |
The Performance Share Plan includes a recommendation for the members of Valmet's Executive Team to own and hold an amount of Company shares equaling their gross annual base salary (100 percent ownership recommendation). Management shareholding can be found here.
Other remuneration elements
Additional pension benefit in the form of a defined contribution pension plan, 20% of base salary.
The remuneration of the President and CEO for 2024 was decided in August 2023 in conjunction with his resignation. The Board of Directors decided to increase the fixed annual base salary of the President and CEO to 900,000 EUR as of January 2024 and to continue salary payments until July 2025. The Company will make a severance payment of 1,125,000 EUR to the President and CEO on July 1, 2025. The President and CEO is considered a good leaver for the purposes of long- and short-term incentives and retains the rights to all earned incentives, as well as future incentives for the performance period 2024–2026. Supplementary pension payments will continue until the end of the year 2024.
