Remuneration

Remuneration and other benefits of the members of the Board of Directors

The Annual General Meeting decides annually on the remuneration payable to members of the Board of Directors for their term of office. The Shareholders’ Nomination Board prepares a proposal concerning the composition of the Board of Directors for the company’s Annual General Meeting.

On 15 March 2022, the Annual General Meeting confirmed that the fee for the term of office of the Chairman of the Board of Directors is EUR 60,000, the fee for the term of office of the Vice Chairman of the Board of Directors and for the Chairman of the Board's Audit Committee is EUR 36,000 and the fee for the term of office of other members of the Board of Directors is EUR 30,000. The Chairman of the Board of Direc-tors receives an attendance fee of EUR 1,000 per meeting and the other members EUR 500 per meeting. Attendance fees are correspondingly also paid to the chairpersons and members of Board and company committees. Travel expenses are compensated in accordance with the travel policy of the company.

In accordance with the decision of the Annual General Meeting, 60% of the annual remuneration was paid in cash and 40% in class B shares. Oriola Corporation class B shares were acquired on the market for the Board members as follows: Panu Routila 11,665 shares, Nina Mähönen 5,832, shares, Juko-Juho Hakala 5,832 shares, Eva Nilsson Bågenholm 6,999 shares, Lena Ridström 5,832 shares and Harri Pärssinen 6,999 shares.

Restriction periods are not included in the remuneration paid in Oriola Corporation class B shares. The members of the Board of Directors have not received any share-based rights as remuneration. They are not included in the company’s share incentive scheme. The company has not granted any loans to Board members nor given guarantees on their behalf.

The total fees and other benefits of the Board members for 2022 and shareholdings in the company on 31 December 2022 are available in notes 4.4. and 8.4. to the Consolidated Financial Statements and Remuneration report (https://www.oriola.com/investors/corporate-governance/remuneration/).

Main principles and decision-making process on the remuneration of the President and CEO and other executives

The salary of the President and CEO and other members of the Oriola Management Team consists of a fixed base salary, fringe benefits, a short-term performance bonus and a long-term share incentive plan. The remuneration commits management to develop the company and its financial success in the long-term. The development stage and strategy of the company are considered when determining the princi-ples for remuneration.

In accordance with its charter approved by the Board of Directors, the Compensation and Human Resources Committee monitors the effec-tiveness of the incentive schemes to ensure that the schemes promote the achievement of the company’s short-term and long-term goals. According to the charter, the Compensation and Human Resources Committee reviews management and personnel remuneration policies and issues related to management appointments and makes proposals on such matters to the Board of Directors. More information about the Compensation and Human Resources Committee can be found in the Corporate Governance statement.

The Board of Directors reviews and decides annually on the remuneration and benefits of the President and CEO and other members of the Oriola Management Team, and the underlying criteria thereof.

The Board of Directors decides annually on the earnings criteria and the determination of the performance bonuses based on the proposal of the Compensation and Human Resources Committee.

The company has not granted any loans to the President and CEO or to the members of the Oriola Management Team, nor given guarantees on their behalf. The company has no share option scheme in place. The President and CEO and Chief Commercial Officer have a defined contribution pension benefit typically applied in Sweden.

Short-term performance bonuses

The performance bonus is based on the achievement of the company’s financial targets and personal targets. The maximum performance bonus in 2022 for the President and CEO and for the Oriola Management Team was 60% of the annual salary. The Board of Directors decides annually on the earnings criteria and the determination of the performance bonuses based on the proposal of the Compensation and Human Resources Committee.

Share-based incentive programmes

The members of Oriola’s Oriola Management Team are part of the company’s long-term share incentive scheme. The scheme unites the objectives of shareholders and key personnel to increase the value of the company, commits the key personnel to the company, and offers key personnel a competitive remuneration system based on ownership of shares in the company. 

The Board of Directors of Oriola Corporation decided on 2 June 2022 on the establishment of a new share-based long-term incentive plan for the company’s key employees, including the CEO and the Oriola Management Team. At the same time, the Board decided to terminate the previous long-term incentive plan for the years 2019-2023. 

The new incentive plan comprises a Performance Share Plan (also “PSP”) and a share-based bridge plan to cover the transition phase to the new LTI structure (the “Bridge Plan”). In addition, the long-term incentive scheme comprises a Restricted Share Plan (also “RSP”) as a com-plementary long-term share-based retention plan for individually selected key employees in specific situations. 

The Performance Share Plan

The Performance Share Plan for the years 2022-2025 consists of annually commencing individual performance share plans, each of which is subject to separate decision of the Board of Directors. Each plan comprises a performance period followed by the payment of the potential share rewards in listed class B shares of Oriola. The length of the performance period of the first plan, PSP 2022, is four calendar years. The possible subsequent plans will include a three-year performance period as separately decided by the Board of Directors. Eligible for participa-tion in the first PSP 2022 are approximately 20 individuals, including the members of the Oriola Management Team. The performance measures based on which the potential share rewards under PSP 2022 will be paid are earnings per share (EPS) and an environment-related target (CO2). The first plan, PSP 2022, commences effective as of the beginning of 2022. It comprises a performance period covering the cal-endar years 2022–2025, and the share rewards potentially payable thereunder will be paid during the first half of 2026. The payment of the rewards is conditional on the achievement of the performance targets which the Board of Directors has set for the plan and the individual participant’s continued employment or service relationship with Oriola. If all the performance targets for the PSP 2022 are fully achieved, the aggregate maximum number of shares to be paid based on this plan is approximately 2,254,000 class B shares (referring to gross earning, from which the applicable payroll tax is withheld).

The Bridge Plan

The Bridge Plan for the years 2022-2023 covers specific incentive and retention needs during the transition phase to the new LTI structure. Eligible for participation in the Bridge Plan are the same individuals as for PSP 2022. The Bridge Plan is a one-off plan commencing effective for the years 2022–2023. The potential share rewards payable based on the Bridge Plan will be paid in listed class B shares during the first half of 2024. The performance measures based on which the potential share rewards under the Bridge Plan will be paid are the development of share price of Oriola’s class B share (excluding dividends and other distribution to shareholders), earnings per share (EPS) and an environ-ment-related target (CO2). If all the performance targets set for the Bridge Plan are fully achieved, the aggregate maximum number of shares to be paid based on this plan is approximately 1,127,000 class B shares (referring to gross earning, from which the applicable payroll tax is withheld).

The Restricted Share Plan

The Restricted Share Plan for the years 2022-2024 consists of annually commencing individual restricted share plans which are subject to a separate decision of the Board of Directors. Each plan comprises a restriction period with an overall length of three years, extending to first half of the fourth year of the individual plan. During the plan period, the company may grant fixed share rewards to individually selected key employees. The granted share rewards are paid to the selected participants in one or several tranches latest by the end of the restriction pe-riod. The share rewards are paid in listed class B shares. The first plan, RSP 2022, commences effective as of the beginning of 2022. The aggregate maximum number of shares payable as a reward is approximately 225,400 class B shares (referring to gross earning, from which the applicable payroll tax is withheld).

For all three programs, if the individual’s employment with Oriola Corporation terminates before the payment of the reward, the individual is, as a main rule, not entitled to any reward. The value of the reward payable to each individual participant based on the plans is limited by a maximum cap linked to a multiplier of the individual’s annual salary. Oriola applies a share ownership requirement to the CEO and the mem-bers of Oriola Management Team. They are expected to retain ownership at least half of the shares received under the incentive plans until the value of his/her ownership in the company, in the case of the CEO, corresponds to at least his/her annual gross base salary, and in the case of the other the members of the Oriola Management Team, to at least half of his/her annual gross base salary.

Share savings plan

Oriola Corporation has had since 2013 a key personnel share savings plan which has been terminated in 2022 and no new savings have been made to the program in 2022. Approximately 60 key employees participated in the share savings plan for the savings period 1 January – 31 December 2021. The holding period will end on the publication date of the Oriola’s Financial Statements Release 1 January – 31 December 2022. A total of 50,425 matching shares will be transferred to eligible participants in 2023. The matching shares are paid partly in Oriola’s class B shares and partly in cash. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to a key person.

Financial benefits of the President and CEO in 2022

The salary and other remuneration, including fringe benefits, paid to the President and CEO Katarina Gabrielson as of 15 March until 31 De-cember 2022, amounted to a total of EUR 471,208 as follows:

Fixed base salary of EUR 444,586;
Fringe benefits of EUR 3,760; and
Share-based payments of EUR 22,862

The salary and other remuneration, including fringe benefits, paid to Elisa Markula as of 1 January until 15 March 2022 amounted to a total of EUR 103,545 as follows:

Fixed base salary of EUR 100,885; and
Fringe benefits of EUR 2,660.

Financial benefits of other Oriola Management Team members 2022

The salaries and other remuneration, including fringe benefits, paid in 2022 to the members of the Oriola Management Team totalled EUR 1,236,280 as follows:

Fixed base salaries totalling EUR 1,069,536;
Fringe benefits totalling EUR 71,971;
Performance bonuses totalling EUR 39,512; and
Share-based payments totalling EUR 55,261.

The members of the Oriola Management Team are included in the company’s share-based incentive scheme. Shareholdings of the members of the Oriola Management Team in the company are available in note 8.4. to the Consolidated Financial Statements and in the Remuneration report on the company web site.