Corporate Governance

According to the Tecnotree Corporation’s Articles of Association, the Annual General Meeting decides on the remuneration to be paid to the Members of the Board. The proposal regarding the remuneration is made to the AGM by Board of Directors, based on the proposal of the Nomination Committee.

The Board decides on the salary and other financial benefits of the Group executives according to the grandfathering principle.
The variable compensation system in the Tecnotree Group is designed to promote competitiveness and the company’s long-term financial success and to contribute to a positive development of owner value. Compensation plans are based on predetermined and measurable performance and result criteria. Tecnotree has only short-term compensation plans.

The Annual General Meeting 2024 resolved that the annual fee of the Chairman of the Board of Directors will be EUR 210,000, the annual fee of the Vice Chairman of the Board EUR 120,000 and the annual fee of the other members of the Board of Directors EUR 70,000. Approximately 45 per cent of the remuneration will be paid in Tecnotree’s shares and approximately 55 per cent will be paid in cash. The part of the remuneration paid in shares will be paid by either purchasing shares from the public market, or by transferring own shares held by the company. The shares will be delivered to the Board members within two weeks from the day following the publication of the company’s interim report for 1 January 2024 – 30 September 2024 (or at such first available time when the transaction can be executed under applicable law). The Company will pay the transaction costs and transfer taxes related to the purchase or transfer of the shares.

The members of the Board of Directors shall receive only annual remuneration and no sitting fee shall be paid for attending any Board or committee meeting.

The Board Members will be reimbursed for necessary travel according to the policies adopted by Tecnotree. Board Members are not covered by incentive programs and are not eligible for performance-based remuneration.

The Annual General Meeting 2024 resolved that the annual fee of the Chairman of the Board of Directors will be EUR 210,000, the annual fee of the Vice Chairman of the Board EUR 120,000 and the annual fee of the other members of the Board of Directors EUR 70,000. Approximately 45 per cent of the remuneration will be paid in Tecnotree’s shares and approximately 55 per cent will be paid in cash. The part of the remuneration paid in shares will be paid by either purchasing shares from the public market, or by transferring own shares held by the company. The shares will be delivered to the Board members within two weeks from the day following the publication of the company’s interim report for 1 January 2024 – 30 September 2024 (or at such first available time when the transaction can be executed under applicable law). The Company will pay the transaction costs and transfer taxes related to the purchase or transfer of the shares.

The CEO of the Company is Padma Ravichander. The remuneration of the CEO consists of fixed remuneration, variable remuneration consisting of long-term and short-term incentive, pension, transportation allowance, housing benefit, employee wellness benefits, employee insurance benefits, fringe benefits, bonuses and other financial benefits.

The objective is to have a good balance of rewarding elements, and to guarantee a market competitive level of fixed remuneration supported with shortand long-term incentive schemes aimed at driving Company performance and providing an appropriate reward. The CEO is eligible for benefits laid down in the Remuneration Policy or as may be amended and approved by the Board and shareholders from time to time.

Total earned fixed pay for the CEO during period 1 January 2024 to December 2024 was EUR 0.96 million (1.10). Other benefits was EUR 0.19 (0.17) million. The value of performance bonus and shares at delivery date’s value was EUR 0.63 million (2.12)

Fixed Remuneration

The fixed remuneration paid to the CEO consists of monthly base salary and fringe benefits. The annual base salary of the CEO will be 12 (twelve) times the monetary salary paid to the CEO on a monthly basis and is also based on the requirement of the position, past performance, relevant individual experience, competence, experience in the Company, business management and skills. The fixed remuneration is reviewed annually, based on the performance of the Company and the CEO, along with the market conditions. The Company may, upon receipt of written consent from the CEO, have the right to change the fringe benefits into monetary compensation in accordance with their taxable value.

Short-term incentive / Annual Bonus

Incentives based on the achievement of the Company’s profitability and other financial, strategic and operational targets for the financial year as set by the Board at the beginning of the financial year. The CEO is also eligible for performance-based bonus. The annual short-term incentive may not exceed 100% of the individual’s annual fixed base salary. The CEO’s annual bonus requires a valid employment contract at the end of the year, provided that the Board may, by way of the Service Agreement entered into between the Company and the CEO, affix mutually agreed terms for the exercise of such incentives granted to the CEO by the Company.

Long-Term Incentive

In accordance with the Long-Term Incentive Program, the Company will grant Tecnotree Corporation Tekniikantie 14, 02150 Espoo, Finland the CEO, certain stocks of the Company, which may be exercised by the CEO in accordance with the Long-Term Incentive (LTI) Program. The grant is subject to the Company procuring all approvals and/or ratifications from the General Meeting, or the Board authorized by the General Meeting, to affect the LTI Program.

Pension

The CEO may participate in the pension schemes reflecting the market practice in Finland or in the CEO’s country of residence. The pension schemes may evolve every year. The retirement age and the pension arrangements are decided by the Board in accordance with the market practice. A lower retirement age as well as a supplementary pension provision as part of the overall remuneration may be agreed with the CEO.

Other benefits

Other benefits include housing benefit, employee wellness benefits, employee insurance benefits, including but not limited to health insurance, travel insurance and allowances for international assignments. The CEO will be entitled to obtain the said benefits in-line with appropriate and relevant levels as indicated by local market practices in the country of employment of the CEO and may evolve on an annual basis. The Board can also exceptionally use different non-recurring remuneration components such as sign-in or stay-on bonuses.

Condition of termination

The notice period of the CEO is thirty-six months if the company terminates his or her contract, and six months, if the contract is terminated by the CEO. Salary is paid for the period of notice and, in the case of the notice given by the company, a compensation equal to 36 months’ base pay will be paid. The company can terminate the contract of the CEO with immediate effect, without a separate compensation, if the CEO has materially breached his or her CEO contract, convicted guilty to a crime or otherwise caused substantial damage to the company.

The variable compensation of the members of the Management Board, the annual short-term incentive scheme (STI), has a target and a maximum level depending on the role of the Member. The Management Board member’s annual bonus requires a valid employment contract at the end of the year.

Pension scheme

The retirement ages of the Management Board members are based on applicable local legislation.

Condition of termination

The period of notice for Management Board members varies between two and six months if the Company terminates the member’s contract, and between two and six months if the member terminates the contract.

Executive Group’s remuneration in 2024 (excl. the CEO)