Remuneration

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Remuneration

Remuneration policy

The remuneration policy of Boreo’s governing bodies applies to the decision-making process and key principles and terms of the remuneration of the Board of Directors and the CEO.

Remuneration policy (in Finnish)

Remuneration report

The Remuneration report describes Boreo’s remuneration practices and the remuneration of the governing bodies, that is the Board of Directors and the CEO, and the rest of the group executive management team. The Remuneration report has been compiled in accordance with the Finnish Corporate Governance Code 2020 issued by the Securities Market Association.

Boreo's Remuneration reports and Salary and remuneration statements are published in Finnish and can be found on the Finnish site

Decision-making sequence of remuneration add

The General Meeting decides on the emoluments paid to the members of the Board. The Board of Directors decides on the salary and benefits of the CEO. The Board of Directors also annually approves the principles and objectives of the remuneration systems based on the parent company’s CEO’s proposal.

Key principles of remuneration add

When determining salaries and remuneration the company’s financial performance, skills of the people and their performance in their tasks, the difficulty level of the tasks, and external salary and remuneration references on the relevant markets are considered. Compensation should be carried out so that it is motivating and promotes performance. In addition, fairness, competitiveness, clear communication, and efficient feasibility are emphasized in remuneration.

In the remuneration of the CEO, the special position of the task in forming and implementing the company's business strategy and in achieving the short-term financial result are also considered.

The remuneration of the Board of Directors is based on generally accepted remuneration systems for the Board so that the Board as a whole can support the development of the company's current and future business in the best possible way

Remuneration of the Board of Directors add

Remuneration of the Board of Directors can consist of one or several factors, such as annual salaries, meeting fees and shares. Members of the Board of Directors are not part of the incentive bonus or pension systems.

During the 2021 financial period the following fees were paid to the Board of Directors:

Members of the Board of Directors Fees
Simon Hallqvist (Chairman of the Board from March 3, 2020) 0
Camilla Grönholm (Chairman of the Remuneration & Nomination Committee from April 16, 2021) 41,963
Jouni Grönroos (Chairman of the Audit Committee from April 16, 2020) 80,963
Ralf Holmlund 39,213
Michaela von Wendt 37,713
Martti Yrjö-Koskinen 0
Anssi Ruohtula 5,250

Benefits and conditions of the CEO’s employment relationship add

Basic salary and benefits

The CEO’s monthly salary consists of a fixed basic salary and fringe benefits. The fixed basic salary of the CEO is EUR 265,000 per year. The amount of fringe benefits is 0.1% of the basic salary. The remuneration of the CEO is assessed as a whole every year.

Short-term bonus scheme

The CEO has a short-term bonus scheme, the conditions of which are checked annually. In the bonus scheme part of the objectives are linked to financial indicators and part to quality and/or personal indicators. The maximum bonus paid is a sum corresponding with the basic salary for 6 months. Paying the bonus requires that the CEO has worked in the position until the end of the calendar year and that the company or CEO have not terminated the employment before the end of the calendar year.

Long-term incentive plan

The Board of Directors can resolve on a long-term incentive plan, which requires participant’s own investment in the company's shares. In addition, the program may include a maximum 10% discount of the share price and/or a matching share element. The accrued value of the granted long-term incentive plan cannot exceed 25% of the CEO's annual base salary.

On June 10, 2022, the Board of Directors of Boreo Plc decided to establish a matching share plan for key personnel, where the subscriber has the opportunity to receive additional shares free of charge after the end of the three (3) year vesting period.

Kari Nerg, the CEO of Boreo Plc, subscribed for 6,768 company shares in the personnel share issue carried out on June 14–26, 2022. Thus, in July 2025, he can be paid a reward worth a maximum of 2,256 company shares, including the cash portion of the reward intended for paying taxes.

Management holdings and share incentives

All members of the group management team (including the CEO) own shares in the company. In addition to the shares registered in the personnel share issue, some of the members of the group management team have acquired shares of Boreo from Preato Capital AB – the majority shareholder of the company in connection with the signing of their employment contracts. In these arrangements the person’s possibilities of selling the shares have been restricted in time.

Pension

The retirement age of the CEO is determined based on valid legislation on pensions for employed persons. The CEO of the parent company does not have a pension agreement that deviates from conventional pension legislation.

The table below shows the salaries and fees paid to the CEO in 2021:

CEO's fees Basic salary Fringe benefits Bonus Pensions Total
Kari Nerg 212,000 240 66 000 0 278 240

Terms of notice

The period of notice for the CEO is 6 months for both contracting parties. Termination requires no breach of contract or similar special reason. The CEO’s service contract determines the severance pay if Boreo Oyj terminates the employment. In addition to the six-month salary paid during the period of notice, the CEO will receive severance pay corresponding with the basic salary of six months.

Remuneration of other members of the group management team add

Basic salary and benefits

The monthly salary of other members of the group management team consists of a fixed basic salary and fringe benefits. Members of the group executive management team can exchange part of the monetary pay into use of a company car benefit.

Short-term bonus scheme

The members of the group management team have a short-term bonus scheme, the conditions of which are checked annually. In the bonus scheme part of the objectives are linked to financial indicators and part to quality and/or personal indicators. The maximum bonus paid is a sum corresponding with the basic salary for 6 months.

Paying the bonus requires that the member of the executive management team has worked in the position until the end of the calendar year and that the company or person have not terminated the employment before the end of the calendar year.

Long-term incentive plan

The Board of Directors can resolve on a long-term incentive plan, which requires own investment in the company's shares. In addition, the program may include an advantage consisting of a reduction in the share price and/or a matching share element.

On June 10, 2022, the Board of Directors of Boreo Plc decided to establish a matching share plan for key personnel, where the subscriber has the opportunity to receive additional shares free of charge after the end of the three (3) year vesting period.

The other members of the group management team of Boreo Plc (excluding the CEO) subscribed for 22,700 company shares in the personnel share issue carried out on June 14–26, 2022. Thus, in July 2025, the members of the management team in question may be paid a reward maximum worth of 6,461 company shares, including the cash portion of the reward intended for tax payments.

Pension

The retirement age of the members of the group executive management team is determined based on valid legislation on pensions for employed persons. Members of the group executive management team do not have individual pension arrangements in Finland. Members of the group executive management team working in Sweden can exchange part of their monetary salary for pension contributions as is typical for the employee pension scheme in Sweden.

Management holdings and share incentives

All members of the group management team (including the CEO) own shares in the company. In addition to the shares registered in the personnel share issue, some of the members of the group management team have acquired shares of Boreo from Preato Capital AB – the majority shareholder of the company in connection with the signing of their employment contracts. In these arrangements the person’s possibilities of selling the shares have been restricted in time.

Terms of notice

The periods of notice for members of the group management team are determined personally for each manager. If the company terminates the employment, the period of notice for members of the group management team is six months. If the member him/herself terminates the employment a 4 to 6 month period of notice is applied. No extra compensation to be paid for redundancies have been determined in the management agreements of members of the group management team.

The following fees were paid to the members of the group executive management team in 2021:

Group management team 2020 Salaries Bonuses Fringe benefits Pensions Total
Total 595,821 49,500 13,480 30 000 688,801

The new group management team was appointed on October 1, 2020 and since October 5, it has consisted of the CEO, Aku Rumpunen, Mari Katara and Janne Silvennoinen. Richard Karlsson joined the group management team on January 5, 2021 and Tomi Sundberg started in group management team on October 18th, 2021. After the financial period ended, Jesse Petäjä joined the group management team on March 15th, 2022.