Remuneration of the members of the Board of Directors
The Annual General Meeting 2019 resolved to keep the remuneration of the members of the Board of Directors unchanged. As a result, the Chairman receives an annual remuneration of EUR 95,000, the Vice Chairman EUR 80,000 and members EUR 62,500. Approximately one half of the remuneration was decided to be paid in the Company's B-series shares which were acquired from public trading during April 2019. As a result the Chairman received 7.920, the Vice Chairman 6.670 and each member 5.211 B-series shares. The amount of the cash consideration corresponds to the estimated withholding tax. The transfer of the shares is restricted for a period of two years following receipt. In addition, the Annual General Meeting resolved to pay to the members a remuneration of EUR 700 per each attended Board and committee meeting. Further, the Annual General Meeting decided that an additional monthly compensation of EUR 800 be paid to the Chairman of the Audit Committee.
Principles of compensation of operative management
The purpose of the management's compensation system is to compensate the management in a fair and competitive way for a successful and profitable implementation of the Company's strategy. The objective of remuneration is also to encourage management in the development of the Company strategy and business to thereby act for the benefit of the Company in the long run.
The Board approves the salary and compensation of the CEO and the principles applied in the compensation of other Corporate Management Team members. The Board further approves the structures and basis as well applicable measures for the Company's remuneration and incentive schemes. The Nomination and Compensation Committee assists the Board in matters relating to management remuneration, conditions of employment and engagement of management members as well as prepares Board decisions relating to management remuneration. The CEO acting in cooperation with the Chairman of the Board decides on matters related to the compensation of other senior management members in accordance with the principles approved and guidance issued by the Board.
Remuneration of the CEO
The monthly salary of CEO Mika Joukio is EUR 40,609 (December 2019). The salary includes car and mobile phone benefits and an extended health, travel and accident insurance benefits. In 2019 the CEO Joukio received a total of:
• EUR 1,959,527 in salary, incentives and other benefits, including long-term incentives (EUR 1,766,254 in 2018 and EUR 1,339,476 in 2017), of which
• EUR 511,552 (EUR 510,397 in 2018 and EUR 506,662 in 2017) was fixed compensation;
• EUR 218,168 (EUR 232,933 in 2018 and EUR 25,199 in 2017) was short-term incentives; and
• EUR 604,104 (EUR 1,022,925 in 2018 and EUR 807,615 in 2017) was long-term incentives from the performance period 2016-2018. In addition, a total of EUR 625,703 of deferred long-term incentives from the previous performance periods were paid.
The short-term incentive is determined by the Board and was based on the Company’s EBIT and cash flow, Metsä Group’s corresponding indicators and on personal targets. The cost to the Company of the CEO’s supplementary defined benefit pension insurance was in 2019 EUR 538,995.
Remuneration of other Corporate Management Team members
In 2019, other Corporate Management Team members received a total of:
• EUR 2,647,410 (EUR 2,305,601 in 2018 and EUR 1,889,801 in 2017) in salary and incentives of which
• EUR 1,116,592 (EUR 1,023,773 in 2018 and EUR 974,431 in 2017) were fixed salaries and benefits (insurance, car and mobile phone);
• EUR 361,728 (EUR 340,878 in 2018 and EUR 66,393 in 2017) was short-term incentives ; and
• EUR 641,564 was long-term incentives from the performance period 2016–2018 (EUR 940,950 in 2018 and EUR 848,977 in 2017). In addition, a total of EUR 527,526 of deferred long-term incentives from previous performance periods were paid.
The members of the Corporate Management Team were in 2019 entitled to short-term incentive equal to a maximum of 50 per cent of their respective annual base salaries. The short-term incentive is defined and decided by the Board and the CEO and was based on the Company’s and its functions’ revenue and other targets, and on personal targets.
The Board confirms the outcomes of the long-term share based incentive system based on principles, indicators and scales approved by it. The Board confirmed:
• in February 2018 that the result for the performance period 2015–2017 was 117.1 per cent (taking into account the EBIT multiplier), based on which a total of 250,516 B-series shares were paid to participants. Of these 103,000 were paid to CEO Joukio. The payment of a part of the total reward was deferred in accordance with the
• in February 2019 that the result for the performance period 2016–2018 was 63.6 per cent, based on which a total of 131,792 B-series shares were paid to participants. Of these 47,700 were paid to CEO Joukio. In addition, the reward includes a cash portion covering taxes and other tax-related costs.