Remuneration report 2023
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 Human Resource and Rewarding Committee (HRRC) 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 2023 it was decided that fees for the members of the Board shall be EUR 3 700 per month for the Chairman and EUR 1 850 per month for the Board members. In addition, Board members shall receive a EUR 1 600 per annum for being a member in a Board Committee(s).
Remuneration of Group CEO and Management Team
Company has short-term and long-term incentive plans to reward the CEO and Management Team members, which are described below.
Short-term incentive plan
The purpose of the short-term incentive plan is to reward and incentivize improvements in short-term financial and operational performance and support the delivery of the business strategy. Earning period for the short-term Incentive plan is one year and remuneration is paid annually. In 2023, the short-term incentive was based on EBIT with 80 percent weight and people spirit with 20% weight.
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 a competitive model to earn company’s shares.
Board of Directors decides the earning criteria and targets beginning of the earning periods.
Performance-based Matching Share Plan 2021–2023
Target Group for the earning period 2021–2023 is CEO, Management team and selected key employees. The potential reward of the plan from performance period 2021–2023 is tied to performance of Company’s EBIT. 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. 11 574 shares were subscribed later of which share subscription price was EUR 2.88 per share.
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.
The Performance-based Matching Share Plan 2021–2023 consists of three performance periods, covering the financial years of 2021, 2022 and 2023, respectively. The potential rewards based on the plan will be paid after the end of each performance period.
Remuneration of the CEO
The remuneration of the CEO consists of fixed annual remuneration, i.e. base salary and fringe benefits and variable remuneration, i.e. short- and long-term incentive plans.
Fixed salary of Ville Taipale in 2023 was 234 109 euros and fringe benefits 971 euros. In addition, he was paid EUR 36,343 in 2023 under the short-term incentive schemes 2022 earning period. In addition, other rewards of EUR 42,416 were paid, which include a cash reward and shares from the Performance-based Matching Share Plan 2021–2023 for the performance period year 2022. Those fees were paid in April 2023.
Short-term incentive plan
The maximum short-term incentive for the CEO in 2023 was 50% from the annual salary. The criteria underlying the 2023 short-term incentive plan were not achieved, and based on them, no remuneration will be paid to the CEO in 2024. Criteria for the short-term incentive plan 2022 was achieved partly and the reward on the earning period paid to Ville Taipale in 2023 was the above mentioned EUR 36,343.
Performance-based Matching Share Plan 2021–2023
The share based incentive remuneration of the CEO is based on the Performance-based Matching Share Plan 2021–2023. The maximum outcome for the plan for Ville Taipale is 73 260 shares, of which part will be paid in cash to cover the tax implication from received shares. Share-based reward from 2022 performance period was 9 402 shares and those were given in April 2023. From the 2023 performance period no shares shall be given in 2024.
Remuneration of 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 short-term incentive plan and Performance-based Matching Share Plan 2021–2023, which is described in detail under the section Share based incentive plans.
Management Team’s fixed salary in 2023, without the CEO, was 674,800 euros and fringe benefits were 34,459 euros.
Short-term incentive plan
The maximum short-term incentive for Management Team members in 2023 was 30% from the annual salary. The criteria underlying the 2023 short-term incentive plan were not achieved, and based on them, no remuneration will be paid to the Group Management Team members in 2024. In 2022 criteria for the short-term incentive plan was achieved partly and the reward on the earning period to paid to Management Team members were 9.6% from their annual salary. The reward was paid in year 2023.
Performance-based Matching Share Plan 2021–2023
The share based incentive remuneration of Management Team members is based on the Performance-based Matching Share Plan 2021–2023. The outcome for the plan for Management Team members shall partly be paid in cash to cover the tax implication from received shares. Share-based reward from 2022 performance period was 17,368 shares, without the reward shares of CEO, and those were given in April 2023. From the 2023 performance period no shares shall be given in 2024.
Remuneration Report 2023
Martela Oyj's Remuneration Policy 2020–2023
Martela Oyj's Remuneration Policy 2024–2027