Long-term remuneration

Long-term remuneration

Performance share plan 2023–2027

The Board of Directors resolved in December 2022 to continue the performance share plan for management. The purpose of the plan was to align the objectives of shareholders and executives in order to increase the value of Metsä Board, to commit the executives to perform the mutual strategy, and to offer them a competitive reward plan based on share ownership. The performance share plan 2023–2027 consists of three  performance periods, which are calendar years 2023–2025, 2024–2026 and 2025–2027.

At the beginning of each performance period, the Board decides on the performance criteria and defined performance targets.  The achievement of the targets set for the performance period determines the proportion of the maximum bonus to be paid to the executives. The potential awards under the plan for the performance periods 2023–2025, 2024–2026 and 2025–2027 will be 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. In addition, the Board of Directors has the right to reduce the remuneration under the scheme, in whole or in part, if certain criteria related to the Group's operating result development and equity ratio are not met, or if the amount of the remuneration would exceed the maximum personal remuneration determined for the executive. The maximum level of the bonus is 210% of the fixed annual salary for the CEO and 100% of the fixed annual salary for the other members of Metsä Board's Executive Management Team. In addition, the maximum level of remuneration is set at 270% of the fixed annual salary for the CEO and 130% of the fixed annual salary for the other members of Metsä Board's Executive Management Team.

The remuneration includes a portion payable in Metsä Board Corporation's Series B shares and a cash portion to cover the taxes payable on the bonus. The portion payable in shares refers to the net remuneration after the cash portion of the remuneration has covered the taxes and other charges payable to the executive. The potential reward is generally paid in the spring following the end of the performance period, followed by a lock-up period of approximately two years, during which the executive is not allowed to sell or otherwise transfer the shares. If the executive's employment or service with the Company is terminated during the restriction period, the executive will, subject to certain exceptional circumstances, forfeit his or her entitlement to the bonus.

The plan covers all members of Metsä Board's Executive Management Team and other key executives of the company.

Performance share plan 2020–2024

The Board of Directors of Metsä Board has resolved in January 2020 to continue the performance share plan directed to group executives. The purpose of the plan was to align the objectives of the shareholders and executives in order to increase the value of Metsä Board, to commit the executives to perform the mutual strategy and to offer them a competitive reward plan based on share ownership. The plan 2020–2024 consists of three performance periods, which are calendar years 2020–2022, 2021–2023 and 2022–2024.

The Board of Directors determined the performance criteria and related target levels at the beginning of each performance period. Reaching the targets set for the performance criteria shall determine the proportion of the maximum reward payable to the executives. The potential rewards for the performance periods 2020–2022, 2021–2023 and 2022–2024 are 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. 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 each executive individually. On maximum level the reward potential of the CEO is 210% of the CEO’s annual base salary and the reward potential of other Corporate Management Team members is 100% of executive’s annual base salary. In addition, the reward limit has been set and the reward of the CEO can be 270% of the CEO’s annual base salary at the maximum and the reward of other Corporate Management Team members 130% of their annual base salary at the maximum.

The reward consists of a proportion to be paid in Metsä Board Corporation’s series B shares and a cash proportion. The cash proportion refers to an amount used to cover the taxes to be withheld from the reward. The proportion paid in shares refers to the net reward after the withholding of taxes and other expenses payable for the reward. The potential reward shall be mainly paid in the spring following the end of the performance period. The performance period is followed by an approximately two-year restriction period, during which executives are not allowed to sell or otherwise transfer the shares received. Should an executive’s employment end during the performance or restriction period, the executive shall principally lose the right to reward.

The plan covers Corporate Management Team members as well as other key employees of Metsä Board.

Restricted share plan 2023–2027

The Board of Directors of Metsä Board has resolved in December 2022 to continue the restricted share plan directed to group key employees. The purpose of the plan is to commit the key employees to perform Metsä Board Group's mutual strategy and to offer them a competitive reward plan based on share ownership as well as to align the objectives of the shareholders and key employees in order to increase the value of Metsä Board Group. The Plan offers to the key employees belonging to the target group the possibility to earn Metsä Board Corporation series B shares by meeting the set employment precondition. The Board shall determine the key employees who shall belong to the target group and their rewards.

The plan includes restriction periods, lasting for 12–36 months. The Board shall resolve on the commencement and duration of the restriction period separately for each key employee belonging to the target group. The potential reward shall be paid after the end of the restriction period. The reward consists of a proportion to be paid in Metsä Board Corporation’s series B shares and a cash proportion. The cash proportion refers to an amount used to cover the taxes to be withheld from the reward. The proportion paid in shares refers to the net reward after the withholding of taxes and other expenses payable for the reward. The amount of the reward is limited. If the reward (share + cash proportion) would exceed the maximum reward limit set for the key employee, the exceeding part is not paid. The prerequisite for reward payment is that the key employee’s employment or service is in force and continues until the end of the restriction period.

There is no key employee nominated to the restricted share plan 2023–2027.

Restricted share plan 2020–2024

The Board of Directors of Metsä Board has resolved in December 2019 to continue the restricted share plan directed to group key employees. The purpose of the plan is to commit the key employees to perform Metsä Board Group's mutual strategy and to offer them a competitive reward plan based on share ownership as well as to align the objectives of the shareholders and key employees in order to increase the value of Metsä Board Group. The Plan offers to the key employees belonging to the target group the possibility to earn Metsä Board Corporation series B shares by meeting the set employment precondition. The Board shall determine the key employees who shall belong to the target group and their rewards.

The plan includes restriction periods, lasting for 12-36 months. The Board shall resolve on the commencement and duration of the restriction period separately for each key employee belonging to the target group. The potential reward shall be paid after the end of the restriction period. The reward consists of a proportion to be paid in Metsä Board Corporation’s series B shares and a cash proportion. The cash proportion refers to an amount used to cover the taxes to be withheld from the reward. The proportion paid in shares refers to the net reward after the withholding of taxes and other expenses payable for the reward. The amount of the reward is limited. If the reward (share + cash proportion) would exceed the maximum reward limit set for the key employee, the exceeding part is not paid. The prerequisite for reward payment is that the key employee’s employment or service is in force and continues until the end of the restriction period.

There is one key employee nominated to the restricted share plan 2020–2024.