The Annual General Meeting decides on the fees of the Supervisory Board as well as on their reimbursement for expenses incurred by the attendance of meetings on the basis of the proposal put forth by the shareholders. The members of the Supervisory Board are not in an employment or service relationship with Raisio nor are they covered by Raisio’s short-term or long-term incentive schemes or pension programmes. The Supervisory Board of Raisio plc also includes three representatives selected by and from among the personnel (Act on personnel representatives in the company Board of Directors, 725/1990), who are not paid any attendance fee. These representatives are paid a normal base salary. Travel expenses accrued by the selected members of personnel for attendance at Supervisory Board meetings are reimbursed in accordance with the company’s travel rules.

In 2020 the AGM decided on the remuneration of the Supervisory Board as follows:

The Chairman of the Supervisory Board is paid a yearly remuneration of € 12,000 and that the Chairman of the Supervisory Board and members of the Supervisory Board are paid a fee of € 350 for each meeting, in addition to which their travel expenses will be compensated and they will receive per diem allowance for meeting days according to the Company’s travelling rules and that a meeting fee of € 350 be paid to the Chairman – and if he/she is unable to attend, to the Deputy Chairman – for each Board Meeting attended.

Remuneration for the Board is decided by the Annual General Meeting on the basis of the proposal submitted by the Supervisory Board. The members of the Board are not in an employment or service relationship with Raisio nor are they covered by Raisio’s short-term or long-term incentive schemes or pension programmes.

In 2020 the AGM decided on the remuneration of the Board as follows:

Remuneration payable to the Chairman of the Board is EUR 5,000 per month and the remuneration to the members of the Board EUR 2,500 per month. Approximately 20% of this remuneration shall be paid by assigning shares in the Company’s possession and approximately 80% in cash. The remuneration shall be paid in two equal instalments during the term so that the first instalment is paid on 15 June and the second on 15 December.

In addition to this, a remuneration of EUR 800 in cash would be paid to the Chairman of the Board for each board meeting and to the chairmen of the committees set by the Board among its members for each committee meeting and a remuneration of EUR 400 in cash to the members of the Board for each board meeting, including the meetings of committees set by the Board among its members. For a teleconference meeting this remuneration would be EUR 400 in cash to the Chairman of the Board for each teleconference meeting of the board and to the chairmen of the committees for each teleconference meeting of the committee and EUR 200 in cash to the members of the board. Moreover, they will receive per diem allowance for meeting days and their travel expenses will be compensated according to the Company’s travelling rules.

Remuneration for the CEO is decided by the Board.

The remuneration for the CEO is comprised of a fixed basic salary, fringe benefits, the short-term (STI) and long-term (LTI) incentives and supplementary pension.

The possible incentive paid to the CEO in accordance with the STI scheme is based on the achievement of the financial targets that support the strategic objectives of Raisio Group. The payable incentive in accordance with the STI scheme can be a maximum of 80 % of the CEO’s basic annual salary. The achievement of bonus targets in the schemes of CEO is assessed after the financial year has completely ended, and a possible bonus is paid in cash by the end of March of the year following the financial year.

The earnings period of each share incentive scheme (LTI) is three years and the potential bonus is based on the company’s Total Shareholder Return (TSR). Bonus payment is dependent on the achievement of the Group’s cumulative profit target (EBT, earnings before taxes) during the earning period.

The CEO’s employment contract may be terminated by either the company or CEO with six (6) months’ notice. If the contract is terminated by the company, CEO is entitled to compensation corresponding to 12 months’ pay, in addition to the pay for the period of notice.

The Board’s Remuneration Committee prepares matters concerning the salaries and other financial benefits of the other management (Executive Committee) and the Board decides on these matters.

The remuneration for the members of the Executive Committee is comprised of a fixed basic salary, fringe benefits, the short-term (STI) and long-term (LTI) incentives.

The pension of the members of the Executive Committees is determined according to the Finnish employment pension scheme TyEl; the members are covered by the group pension insurance scheme of the Raisio Group Management. A sum equivalent to 15 per cent of the manager’s basic annual salary (salary in money and taxation value of fringe benefits) is paid into the group pension insurance every year. As of 2020 the retirement age for members of the Executive Committee is in accordance with the current legislation. For those Executive Committee members, who have been appointed before 2020, the retirement age is 62 years.

For the Executive Committee, the incentive scheme is based on the achievement of EBIT and net sales targets; the criterion is either the Group’s EBIT or Division’s EBIT and net sales. The Executive Committee member’s annual bonus is not more than 50% of the annual remuneration. The achievement of bonus targets in the schemes of other executives is assessed after the financial year has completely ended, and a possible bonus is paid in cash by the end of March of the year following the financial year.

The earnings period of each share incentive scheme (LTI) is three years and the potential bonus is based on the company’s Total Shareholder Return (TSR). Bonus payment is dependent on the achievement of the Group’s cumulative profit target (EBT, earnings before taxes) during the earning period.

The Executive Committee members’ notice period is in conformity with the Employment Contracts Act, but always at least three months for both the company and manager. If the company terminates the contract, manager is entitled to compensation corresponding to nine months’ pay, in addition to the pay for the notice period.

The information on the remuneration of the Executive Committee members is provided on an aggregated level, as required by the Finnish Corporate Governance Code, i.e. the amounts of personal benefits are not reported.

The Remuneration Committee prepares issues related to the CEO’s and management’s incentive and reward schemes to be decided by the Board.

Raisio has separate incentive schemes for CEO, management, middle management and other personnel. For the Executive Committee, the incentive scheme is based on the achievement of EBIT and net sales targets; the criterion is either the Group’s EBIT or Division’s EBIT and net sales. The Executive Committee member’s annual bonus is not more than 50% of the annual remuneration. The achievement of bonus targets in the schemes of other executives is assessed after the financial year has completely ended, and a possible bonus is paid in cash by the end of March of the year following the financial year.

Share-based incentive and reward schemes may require an express decision from the General Meeting unless the Board has been authorised by the General Meeting to decide on them.

Authorisations

The share-based incentive schemes are in force for the periods 2018–2020, 2019–2021 and 2020–2022. The earnings period of a share incentive scheme is three years and the potential bonus is based on the company’s Total Shareholder Return (TSR). Bonus payment is dependent on the achievement of the Group’s cumulative profit target (EBT, earnings before taxes) during the earning period.

The purpose of the scheme is to combine the objectives of owners and key employees in order to increase the company’s capitalisation value, to commit the key employees to the company and to offer them a competitive reward system based on the company’s share price development and earnings.

Bonuses for each earnings period will be paid partly in the company’s free shares and partly in cash. The cash payment is made to cover the taxes and fiscal fees arising from the reward. In case the employment or service of a key employee ends before the bonus payment, as a rule no bonus is paid.

The Board recommends that the key employees within the scheme hold a substantial part of all shares they have received based on the scheme as long as the value of their holdings corresponds to their six months’ gross salary.