Remuneration of the President & CEO

The current remuneration of the President & CEO consists of a fixed base salary and benefits, performance-based bonus (short-term remuneration), share-based incentive plans (long-term remuneration) and a supplementary pension plan.

Base salary and benefits

Current monthly base salary for the President & CEO is EUR 34,850 and monthly value of benefits EUR 1,130. These include typical benefits such as a company car and a telephone. Additionally, he has a health insurance, of which the costs to the company are 4,771.69 EUR during 2022.

Short-term remuneration

Suominen applies an annual bonus scheme based on the principles approved by the Board of Directors in advance for one year at a time. For the financial year 2022, the President & CEO’s potential reward from the period is based on Group EBITDA (weight 50%), Group Contribution Margin (CM, weight 20%) and certain personal targets (weight 30%), and it may not exceed 60% of the annual base salary.

Long-term remuneration

Performance Share Plan

The President & CEO is a participant in the Company's Performance Share Plan which currently includes three 3-year Performance Periods, calendar years 2020-2022, 2021-2023 and 2022-2024. The potential reward of the Plan from all three Performance Periods is based on the Relative Total Shareholder Return (TSR). The potential rewards for the President & CEO to be paid correspond to the value of an approximate maximum total of 224,500 shares from Performance Period 2020-2022, 128,500 shares from Performance Period 2021-2023 and 99,500 shares from Performance Period 2022-2024. Maximum total of shares includes also the proportion to be paid in cash. The Plan includes a share price cap mechanism, which cuts the reward if the limits set by the Board of Directors for the share price are reached.

The potential rewards from the Performance Periods 2020-2022, 2021-2023 and 2022-2024 will be paid partly in the Company’s shares and partly in cash in 2023, 2024 and 2025, respectively. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the participant. As a rule, no reward will be paid, if a participant’s employment or service ends before the reward payment. The President & CEO must hold 50% of the net number of shares given on the basis of the plan, as long as his or her shareholding in total corresponds to the value of his or her annual gross salary. Such number of shares must be held as long as his or her employment or service in a group Company continues.

Matching Restricted Share Plan 2019-2021

The President & CEO is a participant in the Company's Matching Restricted Share Plan (MRSP). The aim of the MRSP is to align the objectives of the shareholders and key employees in order to increase the value of the Company in the long-term, to retain key employees at the Company, and to offer them a competitive reward plan that is based on acquiring, receiving and accumulating the Company’s shares.

The MRSP is directed to selected key employees in the Suominen Group. The prerequisite for receiving a reward from the plan is that a participant acquires the company’s shares, amounting to the number resolved by the Board.

If the prerequisites set for a participant have been fulfilled and his or her employment or service in a company belonging to the Suominen Group is in force at the time of the reward payment, he or she will receive matching shares as a reward.

The plan includes vesting periods, the duration of which is resolved by the Board. The potential reward will be paid partly in shares and partly in cash after a vesting period. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the plan participants.

The prerequisite for reward payment is that a participant’s employment or service is in force upon reward payment.

According to the MRSP, the President & CEO is entitled to receive in total 20,000 Suominen shares (gross before taxes) on the condition that he has personally invested into 10,000 Suominen shares. The matching shares will be delivered in two equal installments in 2020 and 2021. First installment of 4 676 net shares were delivered to the CEO during 2020 and the second, and last, installment of 4 674 net shares during 2021. Payment was made partially in shares and cash.

Term of notice and severance pay

According to the written contract made with the President & CEO, the period of notice is six months should either the Company or the President & CEO terminate the contract. Should the Company terminate the President & CEO’s contract, severance pay corresponding to 12 months’ salary shall be paid. The President & CEO has no specific contract related to the termination of his contract due to a public tender offer.

Supplementary pension arrangement

In addition to the statutory pension arrangements, Suominen’s President & CEO has a supplementary pension arrangement granting benefits for old-age, disability and survivor’s pension at the age of 63. The supplementary pension is a defined-contribution pension scheme and corresponds to 11.5% of the President & CEO’s annual salary (as defined in the Finnish Employees Pensions Act) for the year in question. The supplementary pension premium is based on the calculated annual earnings (fixed monthly salary plus estimated bonus). Any possible difference between the actual and calculated payment is taken into account in the following year’s payments.