Tecnotree Corporation’s Board has approved a remuneration policy that describes remuneration principles and framework for the Chief Executive Officer (CEO) and for the members of the Board of Directors of Tecnotree Corporation. The Remuneration Policy also applies to a deputy CEO should such deputy be appointed. The Remuneration Policy has been prepared in accordance with the Finnish Corporate Governance Code, 2020 and it was presented to Tecnotree’s Annual General Meeting in 2020.
Tecnotree Corporation’s annual Remuneration Report describes the remuneration of Tecnotree’s Governing Bodies, i.e., the Board of Directors and the Chief Executive Officer.
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 2023 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 2023 – 30 September 2023 (or at such first available time when the transaction can be executed under applicable law).
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 purpose of the remuneration system is competitive remuneration in order to acquire and commit key resources. 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 variable compensation of the CEO, the annual short-term incentive scheme (STI), is up to 100% of the annual basic salary. The annual bonus is based on net sales, net sales cash inflow, operating expenses, and customer satisfaction. CEO’s annual bonus requires a valid employment contract at the end of the year.
The total earned (paid) remuneration for the CEO in the period 1 January 2022 to 31 December 2022 is as follows:
Fixed annual base salary 630
Other benefits 150
Performance bonus 190
Total, thousand euros 1.189 970
The CEO was allotted 2.39 million Tecnotree shares in 2022 (2.95 million shares 2021). Cost accounted against this is EUR 0.92 million 2022 (0.65 million euros in 2021). The market value based on the dates of delivery is EUR 2.09 million 2022 (1.85 million euros in 2021).
Reimbursements are made to the CEO in accordance with the company's travel policy and other practices.
Fees to be paid in the financial year 2023 based on the financial year 2022
The CEO was part of annual bonus program for the financial year 2022, based on which the performance bonus will be paid in 2023.
The targets of the performance bonus to be paid to the CEO on the basis of the financial year 2022 were based on net sales, net sales cash inflow, EBIT, new logos and customer satisfaction.
The retirement age and the pension arrangements are decided by the Board in accordance with the market practice. 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 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.
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.
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