Remuneration of the President & CEO and members of the Corporate Executive Team

The remuneration paid to the President & CEO and other members of the Corporate Executive Team may consist of fixed components, such as a base salary and fringe benefits; variable components, such as annually decided short-term incentives (performance-based bonus); and long-term incentives and other financial benefits.  

The remuneration criteria for the President & CEO and other members of the Corporate Executive Team are monitored, and the results are regularly reported to both the Personnel and Remuneration Committee and the Board of Directors.

Fixed annual salary and fringe benefits 

President & CEO Saku Sipola’s annual basic salary for 2023 was EUR 456,000, including fringe benefits (car, lunch and mobile phone benefits). The basic salary is paid monthly in cash. 

Short-term incentives 

The Board of Directors makes an annual decision on the performance criteria for the short-term incentives (performance-based bonus) to be paid to the President & CEO and other members of the Corporate Executive Team. The main emphasis will be on financial objectives, but some of the objectives can also be non-financial. Typically, these indicators will consist of a combination of financial, strategic, operational or sustainability and safety indicators.   

The Board assesses the performance of the President & CEO and other members of the Corporate Executive Team in relation to these performance bonus criteria at the end of the review period. The review period is the financial year. Performance bonuses, if any, are paid in April of the year following the review period. The maximum amount of the President & CEO’s annual performance bonus corresponds to his/her base salary for eight months. The maximum amount for other members of the Corporate Executive Team corresponds to their base salary for five or six months.  

Long-term incentives

Share-based plans

The long-term incentive for the President & CEO and other members of the Corporate Executive Team is a share-based plan. On 27 March 2023, the Board of Directors decided to introduce a share-based incentive plan as part of the long-term incentive and commitment plan for the Group’s key personnel. The share-based incentive plan offers an opportunity to earn company shares as a reward for achieving set targets.

The 2023 share plan is performance-based and has four earning periods covering the financial years 2023–2024, 2023–2025, 2024–2026 and 2025–2027. The Board of Directors will make an annual decision on the details of each earning period and their commencement dates. 

The Company’s share-based plans are described below along with their current earning periods: 

Any bonuses arising from the plan will be paid partly in SRV Group Plc shares and partly in cash after the end of the earning period. The cash portion of the bonus will cover any taxes and statutory social insurance contributions arising from the bonus.

Members of the Corporate Executive Team must own 50 per cent of the net shares they receive until their shareholding in the company equates to 50 per cent of the value of their gross annual salary. Correspondingly, the company’s President & CEO must own 50 per cent of the net shares they receive until their shareholding in the company equates to the value of their gross annual salary. This number of shares must be held for as long as the person continues to be a member of the Corporate Executive Team or to hold the position of President & CEO.

In total, the gross bonuses to be paid for the earning periods commencing in 2023 approximately equate to the value of a maximum of 450,000 SRV Group Plc shares, including the cash proportion. Correspondingly, the value of the gross rewards to be paid from the performance period commencing in 2024 will correspond to an approximate maximum total of 450,000 SRV Group Plc shares, including the cash proportion. When paying the bonuses, the maximum value of a share will be considered to be EUR 20.

If the participant’s employment or service contract ends before the bonus payout date, no bonus will usually be paid on the basis of the plan.

The President & CEO has been allocated shares from the following share-based plans:

Other members of the Corporate Executive Team (excluding the President & CEO) have been allocated shares from the following share-based plans:
 

Cash-based incentive plan 

On 27 March 2023, the Board of Directors decided to introduce a cash-based incentive plan as part of the long-term incentive and commitment plan for the Group’s key personnel. In the cash-based incentive plan, the target group has the opportunity to earn a euro-denominated cash bonus, the final value of which will be determined on the basis of the person’s euro-denominated allocation and the percentage change in value of the company’s share as measured during the 12-36-month earning periods. The earning periods may commence during the financial years 2023–2024. 

EUR 275,000 is the maximum amount for starting bonuses allocated to participants. A maximum increase of 100% in the company’s share price will be taken into account when determining bonuses. On the basis of a separate decision, a maximum of 50 per cent of the gross bonus earned may be paid in shares.

Members of the Corporate Executive Team (excluding the President & CEO) have been allocated a total of EUR 20,000 in cash bonuses from the cash-based incentive plan. Incentives will be paid 2025.

Other key terms and conditions

The President & CEO and other members of the Corporate Executive Team do not have any supplementary pensions or insurance. 

Either the President & CEO or SRV may terminate the contract between the President & CEO and the Company with a notice of termination. If the President & CEO terminates the contract, the notice period is six months. If SRV terminates the contract, the notice period is 12 months. The President & CEO is entitled to receive normal salary benefits during the notice period. No severance pay has been agreed on with the President & CEO.

The notice period for other members of the Corporate Executive Team, as well as the terms and conditions of any severance pay, have been agreed on in the employment contracts signed with each member of the Corporate Executive Team.

The following remuneration was paid to other members of the Corporate Executive Team (excluding the President & CEO) for the financial year 2023:

Discontinued incentive plans