Remuneration

The General Meeting decides on the emoluments paid to the members of the Board. The Board of Directors decides on the salary and benefits of the CEO. The Board of Directors also annually approves the principles and objectives of the remuneration systems based on the parent company’s CEO’s proposal.

Boreo Plc’s remuneration is based on the remuneration policy approved at the Annual General Meeting on April 19, 2022. According to the remuneration policy, the company’s financial performance, the skills and performance of people involved, the complexity of their duties and external remuneration references in the relevant markets are considered when determining remuneration.

The remuneration of the CEO also addresses this specific roles’ impact on forming and implementing the company’s business strategy, as well as in achieving the short- and long-term financial results.

The remuneration of Boreo Plc’s governing bodies in 2023 was accordant to the principles described above. The remuneration of the Board of Directors is based on generally accepted remuneration plans for members of the Board so that the Board as a whole is able to support the development of the Company's current and future business in the best possible way. The incentivisation effect, consistency and competitiveness of total remuneration were realized in the remuneration of the CEO.

The target setting in Boreo Plc's remuneration models is constructed so that the company's key financial figures and their positive development are at the core. This aims to ensure that excellent performance also leads to a positive outcome for the company’s business objectives and that the company’s profitability develops positively in the short and long term.

Boreo did not deviate from the remuneration policy of governing bodies during 2023. No recovery of remuneration took place in 2023 and no information has come to the attention of Boreo after the end of the financial period that would lead to the recovery of remuneration.

Remuneration of the Board of Directors can consist of one or several factors, such as annual salaries, meeting fees and shares. Members of the Board of Directors are not part of the incentive bonus or pension systems.

During the 2023 financial period the following fees were paid to the Board of Directors:

The General Meeting 2023 resolved that the monthly fee payable to the Chair of the Board of Directors is EUR 4,000 and the monthly fee for the ordinary members of the Board of Directors is EUR 2,000. The General Meeting resolved that for the Chair of the Audit Committee a monthly fee of EUR 1,000 shall be paid in addition to the board fee and for the Chair of the Nomination and Remuneration Committee a monthly fee of EUR 500 shall be paid in addition to the board fee. The General Meeting further resolved that for participation in meetings of the Board of Directors and Committees of the Board of Directors, a fee of EUR 500 per each meeting shall be paid. It was resolved that 40 % of the total amount of the board fees payable to the ordinary members of the Board by the next annual general meeting shall be paid by company’s own shares and 60 % of the total amount of the fees payable shall be paid in cash. No share compensation shall be paid to the indirect majority shareholder of the company because it is not in the company’s interest to add the shareholding of the indirect majority shareholder by means of board fees.

Fixed basic salary and fringe benefits

The remuneration of the CEO consists of a fixed basic salary and fringe benefits, as well as a short-term incentive plan and a possible long-term incentive plan based on a separate decision of the Board of Directors. The remuneration of Boreo Plc’s CEO for the financial period 2023 is shown in the table below.

The fixed basic salary of the CEO is reviewed annually. The CEO is entitled to the benefit package in force at any time. In 2023, the CEO's taxable fringe benefits included a mobile phone benefit.

Short-term incentive plan

The CEO has a short-term incentive plan, the terms of which are reviewed annually. Under the short-term incentive plan, some targets are linked to financial indicators and some to qualitative and/or personal indicators. Incentives can be paid up to the equivalent of 6 months' basic salary. The 2022 short-term incentives were paid in 2023. As part of a cost optimisation program agreed in Q4/23 it has been agreed that no short-term incentives will be paid to the CEO and the Group Management Team for 2023 nor 2024.

Long-term incentive plan

Boreo Plc’s Board of Directors resolved on June 10, 2022 on a Matching Share Plan directed to the company’s key
employees in which the participants are entitled to receive matching shares gratuitously after a three-year (3) matching period. The amortized value of the benefit granted to the CEO under the long-term incentive plan may not exceed 25% of the annual basic salary. Boreo Plc’s CEO Kari Nerg subscribed for 6,768 shares in the personnel issue carried out on June 14–26, 2022.
The value of the shares acquired by the CEO was EUR 254,206. Thus, in July 2025, he may, according to the matching share plan terms (3:1), be paid remuneration in the form of a maximum value of 2,256 company shares, including the cash component for the payment of taxes. In 2023, no long-term incentive was paid to the CEO.

Management holdings and share incentives

All members of the group management team (including the CEO) own shares in the company. In addition to the shares registered in the personnel share issue, some of the members of the group management team have acquired shares of Boreo from Preato Capital AB – the majority shareholder of the company in connection with the signing of their employment contracts. In these arrangements the person’s possibilities of selling the shares have been restricted in time.

At the end of 2023, the CEO owned 42,138 shares in Boreo Plc (of which 35,370 through AK Capital Oy, a corporation in his control).

Pension

The retirement age of the CEO is determined based on valid legislation on pensions for employed persons. Boreo Plc’s CEO has not had any pension terms or supplementary pension contributions that deviate from the statutory pension scheme during the financial period 2023.

The table below shows the salaries and fees paid to the CEO in 2023:

*Other financial benefits and compensations including, e.g., holiday compensation, holiday bonus and fringe benefits
**The short-term incentive plan earned for 2022 will be EUR 39,930 and will be paid in April 2023.
***The annual amortized value of the long-term incentive plan benefit granted in June 2022 is EUR 28,245 and the incentive is paid in July 2025 if the conditions are met.

Terms of notice

The period of notice for the CEO is 6 months for both contracting parties. Termination requires no breach of contract or similar special reason. The CEO’s service contract determines the severance pay if Boreo Oyj terminates the employment. In addition to the six-month salary paid during the period of notice, the CEO will receive severance pay corresponding with the basic salary of six months.

Basic salary and benefits

The monthly salary of other members of the group management team consists of a fixed basic salary and fringe benefits. Members of the group executive management team can exchange part of the monetary pay into use of a company car benefit.

Short-term bonus scheme

The members of the group management team have a short-term bonus scheme, the conditions of which are checked annually. In the bonus scheme part of the objectives are linked to financial indicators and part to quality and/or personal indicators. The maximum bonus paid is a sum corresponding with the basic salary for 6 months.

Paying the bonus requires that the member of the executive management team has worked in the position until the end of the calendar year and that the company or person have not terminated the employment before the end of the calendar year.

Long-term incentive plan

The Board of Directors can resolve on a long-term incentive plan, which requires own investment in the company's shares. In addition, the program may include an advantage consisting of a reduction in the share price and/or a matching share element.

On June 10, 2022, the Board of Directors of Boreo Plc decided to establish a matching share plan for key personnel, where the subscriber has the opportunity to receive additional shares free of charge after the end of the three (3) year vesting period.

The other members of the group management team of Boreo Plc (excluding the CEO) subscribed for 18,900 company shares in the personnel share issue carried out on June 14–26, 2022. Thus, in July 2025, the members of the management team in question may be paid a reward maximum worth of 5,194 company shares, including the cash portion of the reward intended for tax payments.

Pension

The retirement age of the members of the group executive management team is determined based on valid legislation on pensions for employed persons. Members of the group executive management team do not have individual pension arrangements in Finland. Members of the group executive management team working in Sweden can exchange part of their monetary salary for pension contributions as is typical for the employee pension scheme in Sweden.

Management holdings and share incentives

All members of the group management team (including the CEO) own shares in the company. In addition to the shares registered in the personnel share issue, some of the members of the group management team have acquired shares of Boreo from Preato Capital AB – the majority shareholder of the company in connection with the signing of their employment contracts. In these arrangements the person’s possibilities of selling the shares have been restricted in time.

Terms of notice

The periods of notice for members of the group management team are determined personally for each manager. If the company terminates the employment, the period of notice for members of the group management team is six months. If the member him/herself terminates the employment a 4 to 6 month period of notice is applied. No extra compensation to be paid for redundancies have been determined in the management agreements of members of the group management team.

The following fees were paid to the members of the group executive management team in 2022:

The new group management team was appointed on October 1, 2020 and since October 5, it has consisted of the CEO, Aku Rumpunen, Mari Katara and Janne Silvennoinen. Richard Karlsson joined the group management team on January 5, 2021 and Tomi Sundberg started in group management team on October 18th, 2021. After the financial period ended, Jesse Petäjä joined the group management team on March 15th, 2022.

Remuneration report 2022