Well-functioning and competitive remuneration is an essential tool for engaging competent members of the Board of Directors and executives for Valmet. The remuneration must be in proportion to the development and long-term enhancement of the value of the Company.
The objective of remuneration at Valmet is to encourage employees as individuals and as team members to achieve the set financial and operational targets and to strive for excellent performance. Remuneration is aligned with the Company’s financial performance, internal and external references and observing remuneration levels for similar positions among peer companies. Valmet’s remuneration package for key personnel and executives includes a competitive salary and benefits according to local market practices, short-term incentives based on predefined annual performance indicators and long-term incentives that align the interests of the key executives and shareholders.
Read more in the Remuneration Statement 2018
Board of Directors
The following annual remuneration for the Board has been approved until Valmet’s Annual General Meeting 2020:
- Chairman of the Board would be paid EUR 110,000
- Vice Chairman EUR 66,000
- the other members of the Board EUR 52,800
Furthermore, the Annual General Meeting decided following base fees for committee work:
- EUR 14,000 for the Chairman of the Audit Committee
- EUR 7,000 for each member of the Audit Committee
- EUR 6,000 for the Chairman of the Remuneration and HR Committee
- EUR 4,000 for each member of the Remuneration and HR Committee
In addition, for each meeting of the Board of Directors or the committees of the Board of Directors, a fee of EUR 700 will be paid to the members of the Board that reside in the Nordic countries, a fee of EUR 1,400 will be paid to the members of the Board that reside in other European countries and a fee of EUR 2,800 will be paid to the members of the Board that reside outside Europe.
The Annual General Meeting resolved that, as a condition for the annual remuneration, the members of the Board of Directors be obliged, directly based on the Annual General Meeting's decision, to use 40 percent of the fixed annual remuneration for purchasing Valmet Oyj shares on the market at a price formed in public trading at Nasdaq Helsinki's stock exchange list and that the purchase will be carried out within two weeks from the publication of the Interim Review for the period January 1, 2019 to March 31, 2019.
Chief Executive Officer and other Executive Team members
The remuneration of the President and CEO, as well as the Executive Team members, comprises a monthly total salary (including monthly salary and customary fringe benefits, such as a car and a mobile phone) a supplementary pension plan as well as both short- and long-term incentives.
Remuneration for the President and CEO in 2018
Remuneration for other Executive Team members in 2018
The President and CEO is entitled to retire when reaching 63 years of age. All other Executive Team members belong to the pension systems of their country of residence and have a statutory retirement age.
Share-based incentive plans
Valmet’s share-based incentive plans are part of the remuneration program for Valmet’s key personnel. The purpose of the plans is to align the goals of shareholders and management to increase the value of the Company, to ensure management commitment, and to offer them a competitive, ownership-based reward scheme. Any shares to be potentially awarded are, or have been, acquired through public trading, and therefore the incentive plans have no diluting effect on the share value.
Long-term incentive plan 2018–2020
In December 2017, the Board of Directors of Valmet Oyj approved a long-term share-based incentive plan for Valmet's key employees. The plan includes three performance periods, which are the calendar years 2018, 2019 and 2020. Valmet's Board of Directors shall decide on the performance criteria and targets in the beginning of each discretionary period. The plan is directed to a total of approximately 120 participants, Valmet’s Interim Review, January–March 2019 of which 80 are key employees in management positions (including Executive Team members), and 40 are management talents.
The Board of Directors of Valmet Oyj approved in December 2017 a share ownership recommendation for Valmet's Executive Team members. All members of the Executive Team are recommended to own and hold an amount of Company shares equaling to their gross annual base salary (100 percent ownership recommendation).
In its meeting on December 20, 2018, the Board of Directors of Valmet decided to use the authorization granted by the General Meeting held on March 21, 2018 to acquire the Company's own shares. Based on the authorization, the Board decided to initiate a fixed-term share buy-back program for the purpose of acquiring the Company's own shares to meet part of the obligations arising from the LTI Plan and the Restricted Pool incentive plans. The share acquisitions began on February 11, 2019 and ended on February 21, 2019. The number of shares acquired was 194,600. The shares were acquired at market price in public trading on Nasdaq Helsinki Ltd. In the end of the reporting period, the Company held 244,027 treasury shares related to the share-based incentive programs.
More information about share-based incentive plans can be found in Valmet’s Remuneration Statement.