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 2017
Board of Directors
The following annual remuneration for the Board has been approved until Valmet’s Annual General Meeting 2018:
- Chairman of the Board would be paid EUR 100,000
- Vice Chairman EUR 60,000
- the other members of the Board EUR 48,000
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, 2017 to March 31, 2017.
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 2017
Remuneration for other Executive Team members in 2017
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
The Board of Directors decides and implements Valmet’s sharebased incentive plans, which are part of the remuneration program for management.
The purpose of the plans is to align the goals of shareholders and management to enhance the value of the Company. The plans also aim to ensure commitment of management and offers them a competitive, ownership-based reward scheme.
Any shares to be potentially rewarded are acquired through public trading, and therefore the incentive plans have no diluting effect on the share value.
Long-term incentive plan 2012–2014
In December 2011, a share-based incentive plan including three performance periods, which were the calendar years 2012, 2013 and 2014, was approved. The reward for the 2012 performance period was paid during 2015. For the 2013 performance period, the performance criteria were not met and therefore no rewards were paid. For the performance period 2014 a gross number of 262,980 shares were earned. The reward was paid partly in Company shares and partly in cash in March 2017.
Long-term incentive plan 2015–2017
The Board of Directors of Valmet Oyj approved in December 2014 a share-based incentive plan for Valmet’s key employees. The Plan included three discretionary periods, which were the calendar years 2015, 2016 and 2017. The Board of Directors decided on the performance criteria and targets in the beginning of each discretionary period. The Plan was directed to approximately 80 key people.
Long-term incentive plan 2018–2020
Valmet announced by stock exchange release on December 11, 2017 that the Board of Directors of Valmet Oyj decided on a new long-term share-based incentive plan for Valmet's key employees. The plan includes three discretionary 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, of which 80 are key employees in management positions (including Executive Team members), and 40 are management talents, which is a new target group in Valmet's share based incentive plan.
The shares to be transferred as part of the possible reward payments are, or have been, obtained in public trading, ensuring that the incentive plan does not have a diluting effect on Valmet’s share value.
More information about share-based incentive plans can be found in Valmet’s Remuneration Statement.