Remuneration

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Remuneration

Remuneration policy

The remuneration policy of Boreo’s governing bodies applies to the decision-making process and key principles and terms of the remuneration of the Board of Directors and the CEO.

Remuneration policy (in Finnish)

Remuneration report

The Remuneration report describes Boreo’s remuneration practices and the remuneration of the governing bodies, that is the Board of Directors and the CEO, and the rest of the group executive management team. The Remuneration report has been compiled in accordance with the Finnish Corporate Governance Code 2020 issued by the Securities Market Association.

Boreo's Remuneration reports and Salary and remuneration statements are published in Finnish and can be found on the Finnish site

Decision-making sequence of remuneration add

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.

Key principles of remuneration add

When determining salaries and remuneration the company’s financial performance, skills of the people and their performance in their tasks, the difficulty level of the tasks, and external salary and remuneration references on the relevant markets are considered. Compensation should be carried out so that it is motivating and promotes performance. In addition, fairness, competitiveness, clear communication, and efficient feasibility are emphasized in remuneration.

In the remuneration of the CEO, the special position of the task in forming and implementing the company's business strategy and in achieving the short-term financial result are also considered.

The remuneration of the Board of Directors is based on generally accepted remuneration systems for the Board so that the Board as a whole can support the development of the company's current and future business in the best possible way

Remuneration of the Board of Directors add

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 2020 financial period the following fees were paid to the Board of Directors:

Members of the Board of Directors Fees
Simon Hallqvist (Chairman of the Board from March 3, 2020) 0
Camilla Grönholm 12,786
Jouni Grönroos (Chairman of the Audit Committee from April 16, 2020) 25,000
Ralf Holmlund 15,000
Anssi Ruohtula 18,000
Michaela von Wendt 18,000
Martti Yrjö-Koskinen 0
Sari Nordblad (Chairman of the Audit Committee until April 15, 2020) 8,952
Mikko Moilanen (Chairman of the Board until March 2, 2020) 14,214
Total 111,952

Ralf Holmlund (March 2, 2020-), Camilla Grönholm (April 16, 2020-) and Jouni Grönroos (April 16, 2020-) became new members of the Board. Sari Nordblad and Mikko Moilanen quit the Board on April 16, 2020. Anssi Ruohtula quit on April 15, 2021.

In accordance with the decision made at the Annual General Meeting on April 15, 2021, the fee for Board members is currently EUR 2,000 per month. The fee is paid 60 % in money and 40 % in shares. The additional fee for the Chairman of the Audit Committee is EUR 1,000 per month. In addition, the Chairman of the Audit Committee has also been paid a separate fee for a fixed-term development project. The Chairman of the Remuneration & Nomination Committee is paid EUR 500 per month. A meeting fee of EUR 500 is paid for each meeting for the Board members and members of the committees of the Board. Fees are only paid to members that are independent of the biggest shareholder and, thus, the current Chairman of the Board has not received a fee.

In addition to the fees presented above, no additional financial benefits have been paid. No additional fees have been paid to committee members either apart from what is stated above. Members of the Board are not in an employment relationship with the company.

Benefits and conditions of the CEO’s employment relationship add

Basic salary and benefits

The CEO’s monthly salary consists of a fixed basic salary and fringe benefits. The fixed basic salary of the CEO is EUR 225,000 per year. The amount of fringe benefits is 0.1% of the basic salary. The remuneration of the CEO is assessed as a whole every year.

Short-term bonus scheme

The CEO has 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 CEO has worked in the position until the end of the calendar year and that the company or CEO have not terminated the employment before the end of the calendar year.

Pension

The retirement age of the CEO is determined based on valid legislation on pensions for employed persons. The CEO of the parent company does not have a pension agreement that deviates from conventional pension legislation.

The table below shows the salaries and fees paid to the CEO in 2020:

CEO's fees Basic salary Fringe benefits Bonus Pensions Total
Kari Nerg from May 4, 2020 128,000 158 0 0 128 ,58
Janne Silvennoinen Jan 1 to Feb, 2020 12,000 104 207,938 0 220,042
Total 140,000 262 207,938 0 348,200

The interim CEO Martti Yrjö-Koskinen has not received any salary for 2020 as the representative of the company’s biggest shareholder.

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.

Remuneration of other members of the group management team add

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.

The annual basic salaries including fringe benefits of other members of the group executive management team amount to some EUR 600,000 per year.

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.

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 own company shares. Members of the group management team that have started working for the company after 2019 have acquired company shares from the main owner of the company Preato Capital AB when signing their employment contract. In this arrangement the person’s possibilities of selling the shares have been limited.

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 2020:

Group management team 2020 Salaries Bonuses Fringe benefits Pensions Total
Total 184,182 17,010 284 0 201,476

Until October 4, 2020 Marika Rusko was part of the group management team (excl. CEO). 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. After the financial period ended, Richard Karlsson joined the group management team on January 5, 2021.