Remuneration of the Supervisory Board
Pursuant to a decision of the Representative Council, the Chair and Deputy Chair of the Supervisory Board are paid fixed monthly remuneration and meeting fees. Other members of the Supervisory Board are paid meeting fees. Meeting fees are also paid for the meetings of the Supervisory Board's committees as well as for the meetings of Metsäliitto Cooperative's district councils. The members of the Supervisory Board are furthermore entitled to travel allowance pursuant to Metsä Group's travel instructions. The Chair and Deputy Chair of the Supervisory Board are voluntarily TyEL-insured (Finnish statutory pension system).
The monthly remuneration of the Supervisory Board's Chair is EUR 4,100 and Deputy Chair EUR 1,800. The meeting fee paid to the members of the Supervisory Board is EUR 800 (the meeting fee regarding the district councils' meetings is EUR 400).
Remuneration of the Board of Directors
Pursuant to the Supervisory Board's decision, each member of the Board of Directors is paid fixed monthly remuneration and meeting fees. Meeting fees are also paid for the meetings of the Board of Directors' committees. The members of the Board of Directors are voluntarily TyEL-insured (Finnish statutory pension system) and entitled to travel allowance pursuant to Metsä Group's travel instructions.
At a meeting held on 27 October 2022, the Supervisory Board decided to pay the following fees to the Chairman, Vice Chairman and members of the Board of Directors in 2023:
The monthly remuneration of the Board of Directors:
- the Chair of the Board of Directors EUR 12,000
- the Deputy Chair of the Board of Directors EUR 6,000
- other members of the Board of Directors EUR 5,600
The meeting fee payable to the members of the Board of Directors is EUR 800. In addition, the Chairs of the Board of Directors' Audit Committee and HR Committee are paid separate monthly remuneration. The monthly remuneration of the Chair of the Board of Directors' Audit Committee is EUR 1,300 and the Chair of the Board of Directors' HR Committee EUR 1,100.
The Chair of Metsäliitto Cooperative's Board of Directors Jussi Linnaranta and Vice Chairman of the Board Mikko Mäkimattila are also members of Metsä Board Corporation's Board of Directors. The remuneration paid for board work in Metsä Board Corporation is available on company's webpages.
Remuneration of the President and CEO
The Board of Directors appoints and discharges the President and CEO and decides on the President and CEO's remuneration and the other terms and conditions of the President and CEO's engagement. By decision of the Board of Directors, the President and CEO is paid a fixed base salary, which is a compensation for the President and CEO's responsibilities and is based on the requirements of the position, the President and CEO's individual's competence and performance as well as prevailing market practice. The monthly salary of the President and CEO Ilkka Hämälä is EUR 68,564 (April 2023). The monthly salary includes a company housing, car and phone benefit, extended health, travel and accident insurance coverage as well as other minor fringe benefits.
A short and long-term incentive can be paid to the President and CEO by decision of the Board of Directors. In 2023 the maximum level of remuneration available in the short-term incentive scheme is, accounting for Metsä Group's EBIT multiplier 93.75% of the fixed annual salary. The reward is based on Metsä Group's operating result (50% weighting) and the strategic goals defined by the Board of Directors, including sustainability targets (50% weighting) as well as the realisation of Metsä Group's EBIT multiplier. The potential reward shall be paid in March 2024.
The potential reward for the performance period 2021–2023 regarding the long-term performance plan 2020-2024 is based on the development of Metsä Group's return on capital employed (ROCE, %) as determined by the Board of Directors. Minimum levels have also been set for earnings before interest and taxes as well as the equity ratio. The Board of Directors is entitled to reduce the rewards fully or partly if defined earnings or equity ratio criteria are not met, or if the reward should exceed the maximum reward limit defined for the President and CEO. In addition to the outcome of the performance criteria the basis for the reward is a synthetic share value of which is determined based on Metsä Group's total value. On maximum level the reward potential of the President and CEO is 250% of the President and CEO’s annual base salary (the reward limit is 325% of the President and CEO’s annual base salary). The potential reward shall be paid in cash after the restriction period (in March 2025 at the latest) and it shall include taxes and other possible expenses. Should the President and CEO’s service terminate during the performance or restriction period, the President and CEO shall principally lose the right to reward.
The terms and conditions of the President and CEO Ilkka Hämälä's service contract are defined in writing in the President and CEO's contract, the terms of which have been confirmed by the Board of Directors. The period of notice pursuant to the contract is 12 months. If the service contract is terminated by the company, Hämälä is entitled to severance pay corresponding to 12 month salary. No severance compensation is paid if the contract is terminated by Hämälä himself.
Hämälä falls within the scope of the Employees Pensions Act. It provides pension security based on the period of service and earned income as provided in the Act. Hämälä's retirement age is in accordance with the Employees Pensions Act. Hämälä is also entitled to the supplementary defined benefit pension insurance that covers Metsä Group's management. According to the supplementary pension insurance the President and CEO's maximum level of pension is 60% of the total salary under the Employees Pensions Act, calculated on the basis of the five-year period preceding retirement. In case the President and CEO's service with Metsä Group terminates before his retirement age, the President and CEO is entitled to a free policy.
Remuneration of the President and CEO in 2023
In 2022 the maximum level of remuneration available in the short-term incentive scheme was, accounting for Metsä Group's EBIT multiplier 93.75% of the fixed annual salary. The reward was based on Metsä Group's operating result (50% weighting) and the strategic goals defined by the Board of Directors (50% weighting) as well as the realisation of Metsä Group's EBIT multiplier. The short-term incentive of EUR 650,032 based on performance in 2022 was paid to the President and CEO in March 2023.
The reward for the performance period 2020–2022 regarding the long-term performance scheme 2020-2024 was based on the development of Metsä Group's return on capital employed (ROCE, %) as determined by the Board of Directors. Minimum levels had also been set for the operating result and equity ratio. The realisation of the performance period 2020-2022 was 100%. The reward is paid in cash and is based on the value of Metsä Group. Reward is paid after one year restriction period. The amount of the reward is limited. The President and CEO's reward can be 250% of the annual base salary at the maximum.
Remuneration of the President and CEO in 2022
In 2021 the maximum level of remuneration available in the short-term incentive scheme was, accounting for Metsä Group's EBIT multiplier 93.75% of the fixed annual salary. The reward was based on Metsä Group's operating result (50% weighting) and the strategic goals defined by the Board of Directors (50% weighting) as well as the realisation of Metsä Group's EBIT multiplier. The short-term incentive of EUR 723,305 based on performance in 2021 was paid to the President and CEO in March 2022.
The reward for the performance period 2019–2021 regarding the performance share plan 2017-2021 was based on the development of Metsä Group's return on capital employed (ROCE, %) as determined by the Board of Directors. Minimum levels had also been set for the operating result and equity ratio. The realisation of the performance period 2019-2021 was 49,0% based on which the President and CEO received 68,600 Metsä Board Corporation's series B shares in March 2022. The long-term incentive paid to the President and CEO regarding the performance period 2019-2021 was EUR 1,246,855 in total. The amount of the reward was limited. The President and CEO's reward (including both shares and cash) can be 250% of the annual base salary at the maximum. The reward payment is followed by a restriction period of approximately two years, during which the President and CEO may not transfer or dispose of the shares.
The President and CEO is covered by a supplementary defined-benefit pension insurance. In 2022, the contribution to the supplementary defined-benefit pension insurance was EUR 4,079,072.
Remuneration of other Metsä Group's Executive Management Team members
The Board of Directors decides on the remuneration and other financial benefits of the other Group's Executive Management Team members employed by Metsäliitto Cooperative on the basis of the HR Committee's preparation.
A fixed base salary is paid to the other Group's Executive Management Team members. Base salary is a compensation for the executive's responsibilities and is based on the requirements of the position, the executive's individual competence and performance as well as prevailing market practice. Base salary can include car, bicycle and mobile phone benefits and an extended health, travel and accident insurance coverage.
A short and long-term incentive can be paid to the other Group's Executive Management Team members by decision of the Board of Directors. In 2023 the maximum level of remuneration available in the short-term incentive scheme is, accounting for Metsä Group's EBIT multiplier, 75% of the fixed annual salary. The reward is based on the operating result of the respective company (50% weighting) and the strategic goals defined by the Board of Directors, including sustainability targets (50% weighting) as well as the realisation of Metsä Group's EBIT multiplier. The potential reward shall be paid in March 2024.
The CEO of Metsä Board Corporation is a member of Metsä Board’s performance share plan 2020-2024. The potential reward for the performance period 2021-2023 shall be paid in March 2024. Further information on Metsä Board's performance share plan 2020-2024 is available on company's webpages. The potential reward of other Group’s Executive Management Team members for the performance period 2021–2023 regarding the long-term performance plan 2020-2024 is based on the development of Metsä Group's return on capital employed (ROCE, %) as determined by the Board of Directors. Minimum levels have also been set for earnings before interest and taxes as well as the equity ratio. The Board of Directors is entitled to reduce the rewards fully or partly if defined earnings or equity ratio criteria are not met, or if the reward should exceed the maximum reward limit defined for the other Group’s Executive Management Team member individually. In addition to the outcome of the performance criteria, the basis for the reward is a synthetic share value of which is determined based on Metsä Group's total value. On maximum level the reward potential of the other Group’s Executive Management Team members is 140% or 210% of the executive’s annual base salary (the reward limit is 180% or 270% of the executive’s annual base salary). The potential reward shall be paid in cash after the restriction period (in March 2025 at the latest) and it shall include taxes and other possible expenses. Should the other Group’s Executive Management Team member’s service or employment terminate during the performance or restriction period, the executive shall principally lose the right to reward.
The period of notice applicable to other Group's Executive Management Team members is six months, and the members are entitled to severance pay equaling 6–12 month salary if their contract is terminated on grounds not related to the executive.
The other Group Executive Management Team members fall within the scope of the Employees Pensions Act. It provides pension security based on the period of service and earned income as provided in the Act. Depending on the date on which the employment contract began, some members of Metsä Group's Executive Management Team are entitled to the supplementary defined benefit pension insurance, with a retirement age of 62. According to the supplementary pension insurance the maximum level of pension is 60% of the total salary under the Employees Pensions Act, calculated on the basis of the five-year period preceding retirement. In case their employment relationship with Metsä Group terminates before the retirement age, a member of the Executive Management Team is entitled to a free policy.
Remuneration of other Metsä Group’s Executive Management Team members in 2023
In 2022 the maximum level of remuneration available in the short-term incentive scheme was, accounting for Metsä Group's EBIT multiplier, 75% of the fixed annual salary. The reward was based on the operating result of the respective company (50% weighting) and the strategic goals defined by the Board of Directors (50% weighting) as well as the realisation of Metsä Group's EBIT multiplier. The short-term incentive of EUR 1,397,634 based on performance in 2022 was paid to the other Group's Executive Management Team members in March 2023.
The reward of Metsä Board's CEO for the performance period 2020-2022 regarding the performance share plan 2020-2024 was based on the development of Metsä Board Group's (50%) and Metsä Group's (50%) return on capital employed (ROCE, %), as determined by the Board of Directors. Minimum levels had also been set for the operating result and equity ratio. The realisation of the performance period 2020-2022 was 100 %. Further information on Metsä Board's performance share plan 2020-2024 is available on company's webpages. The reward of other Group's Executive Management Team members was based on the development of Metsä Group's return on capital employed (ROCE, %) as determined by the Board of Directors. Minimum levels had also been set for the operating result and equity ratio. The realisation of the performance period 2020-2022 was 100%. Based on the realizations of the performance period 2020-2022 other Group's Executive Management Team members receive the reward in cash after one year restriction period. The value of the reward is based on the value of Metsä Group synthetic share. The reward of other Group's Executive Management Team members (including both shares and cash) can be 200% of the executive's annual base salary at the maximum.
Remuneration of other Metsä Group’s Executive Management Team members in 2022
Other Metsä Group's Executive Management Team |
Base salary and fringe benefits (a company car and phone benefit, extended insurance coverage) |
Short-term incentive (concerns performance in 2020) |
Long-term incentive (concerns the performance period 2018-2020) |
Deferred long-term incentive |
Total |
2022 |
2,623,925 |
1,174,515 |
2,525,779 |
27,195 |
6,351,414 |
2021 |
2,254,601 € |
434,776 € |
2,668,919 € |
495,693 € |
5,853, 990 € |
In 2021 the maximum level of remuneration available in the short-term incentive scheme was, accounting for Metsä Group's EBIT multiplier, 75% of the fixed annual salary. The reward was based on the operating result of the respective company (50% weighting) and the strategic goals defined by the Board of Directors (50% weighting) as well as the realisation of Metsä Group's EBIT multiplier. The short-term incentive of EUR 1,174,515 based on performance in 2021 was paid to the other Group's Executive Management Team members in March 2022.
The reward of Metsä Board's CEO for the performance period 2019-2021 regarding the performance share plan 2017-2021 was based on the development of Metsä Board Group's (50%) and Metsä Group's (50%) return on capital employed (ROCE, %), as determined by the Board of Directors. Minimum levels had also been set for the operating result and equity ratio. The realisation of the performance period 2019-2021 was 70,0%. The reward of other Group's Executive Management Team members was based on the development of Metsä Group's return on capital employed (ROCE, %) as determined by the Board of Directors. Minimum levels had also been set for the operating result and equity ratio. The realisation of the performance period 2019-2021 was 49,0%. Based on the realizations of the performance period 2019-2021 other Group's Executive Management Team members received 137,433 Metsä Board Corporation's series B shares in March 2022. The long-term incentives paid to the other Group's Executive Management Team members regarding the performance period 2019-2021 were EUR 2,525,779 in total. The amount of reward was limited. The reward of other Group's Executive Management Team members (including both shares and cash) can be 200% of the executive's annual base salary at the maximum. The reward payment is followed by a restriction period of approximately two years, during which the other Group's Executive's Management Team members may not transfer or dispose of the shares.
In April 2022 a total of EUR 27,195 of deferred long-term incentives for the performance period 2015-2017 was paid to one member of other Group's Executive Management Team in accordance with the terms and conditions of the performance share plan.