Main menu Products & services About us Our company Sustainability Investors Careers Media Blog Contact us AU21 Remuneration Remuneration for the President and CEO and the Executive Management The following table includes the annual salaries and fringe benefits as well as STI and LTI programme payments to the President and CEO and to the Fortum Executive Management. The STI and LTI programme payments to Fortum Executive Management members, including the President and CEO, amounted to a total of EUR 2.4 million (EUR 2.2 million in 2017), which corresponds to 0.69% (0.73% in 2017) of the total compensation in the Fortum Group. The table also includes payments made to supplementary pension arrangements for the President and CEO and for Fortum Executive Management. Salary and Fringe Benefits The base salary levels are set taking into account the nature of the role, local and international market conditions, as well as individual experience and performance. Thousands of euros President and CEO Other Members of Fortum Executive Management 2018 2017 2016 2018 2017 2016 Salaries and fringe benefits 1,048 998 982 3,101 3,387 3,581 Short-term incentive 313 271 30 926 962 233 Long-term incentive 233 136 - 885 877 1,694 Supplementary pensions 252 229 356 533 636 560 Total 1,846 1,634 1,368 5,445 5,862 6,068 The figures include actual payments and shares delivered during the calendar year. The amounts differ from those presented in the consolidated financial statements (Note 11.4). The financial statements include costs accrued for the year, part of which will be paid later. Short-term incentives Short-term incentives for 2017 (paid in 2018) The STI for 2017 for the members of Fortum Executive Management was based on: Weighting Measure Outcome 60% Comparable operating profit + share of profits from associates and joint ventures Between target and maximum 10% Lost workday injury frequency Below threshold 30% Individual targets Individually assessed The STI payments for the Fortum Executive Management were on average 34% of the annual base salary (85% of the maximum). The aggregate STI payment to members of Fortum Executive Management for 2017 performance was EUR 1.2 million (EUR 1.2 million for 2016). No recovery or claw-back actions were carried out in 2018 for the Fortum Executive Management. In total, EUR 20.7 million (EUR 16.6 million for 2016) was paid as short-term incentives across the Group for the financial year 2017. The amount paid increased compared to the previous year, mainly due to increased headcount. Short-term incentives for 2018 (payable in 2019) The STI for 2018 for the members of Fortum Executive Management was based on: Weighting Measure Outcome 40% Comparable operating profit + share of profits from associates and joint ventures Between minimum and target 20% Operational free cash flow Between target and maximum 10% Lost workday injury frequency 1) Between target and maximum 30% Individual targets Individually assessed 1) In some cases other relevant sustainability measures have been used The outcome of the Group level comparable operating profit was slightly below the target level and the operational free cash flow slightly above the target. The Group level lost workday injury frequency (LWIF) improved clearly and was above the target level. Due to four severe accidents including two fatalities during 2018, the management proposed and the Board of Directors approved a 20% cut of the LWIF achievement rate for the Fortum Executive Management and the division and function management team members. The achieved performance based on the individual targets is evaluated in connection with the individual performance review at the beginning of the year. The accrued incentives for the year 2018 are paid out in April 2019. Short-term incentives for 2019 (payable in 2020) As in 2018, the STI targets for the Fortum Executive Management in 2019 are based on the achievement of divisional targets, Group financial performance as well as individual targets. The STI performance measures and weighting are: 60% comparable operating profit, 10% LWIF (or other relevant sustainability measures), and 30% individual targets. Long-term incentives The Board of Directors approved the amended LTI programme in December 2016. The share awards will not be subject to a minimum lock-up period but members of the Fortum Executive Management will be required to retain 50% of the shares until they have achieved their required shareholding level of 100% of the annual salary. For other key employees included in the new LTI plan no lock-up period will be applied. Under the 2018–2020 LTI plan, the Board-approved earnings criteria are based on earnings per share (50%) and relative total shareholder return (50%) measured against the European utilities peer group. Under the plan, the maximum gross number of shares to be delivered after the earnings period in 2021 is 572,781 shares (based on the participant status as of 31 December 2018). In December 2018, the Board of Directors approved the 2019–2021 LTI plan. The earnings criterion for the plan is the relative total shareholder return (100%). The table sets out the pipeline of recently granted LTI awards, including details of the shares delivered in the reporting period. No recovery or claw-back actions were carried out in 2018 for the Fortum Executive Management. LTI plan 2013–2018 2014–2019 2015–2020 2016–2021 2017-2019 2018-2020 Earnings period 2013–2015 2014–2016 2015–2017 2016–2018 2017-2019 2018-2020 Share delivery year 2016 2017 2018 2019 2020 2021 Number of participants (31 Dec 2017) 73 84 94 101 86 111 Number of shares delivered 1) 241,699 153,956 141,865 416,265 - - Measures A combination of EBITDA, EPS and share price development 50% EPS, 25% TSR & 25% Reputation Index 30% EPS, 30% Return on Net Assets (Group or Divisional), 20% TSR and 20% Group EBITDA 50% EPS and 50% TSR 50% EPS and 50% TSR 50% EPS and 50% TSR Payment (% of annual salary) 42% 27% 26% 93% Shares delivered to members of Fortum Executive Management 2) Pekka Lundmark (member since 7 September 2015) - 4,463 6,453 25,765 Arun Aggarwal (member since 17 October 2018) - - - - Alexander Chuvaev 3) 27,897 15,480 15,930 33,522 Kari Kautinen (member until 30 September 2018) 4,014 2,274 2,059 n/d 4) Per Langer 4,677 2,358 1,621 5,057 Risto Penttinen (member since 1 April 2016) n/d 4) 1,793 1,767 6,232 Markus Rauramo 7,383 4,185 2,103 11,137 Arto Räty (member since 1 April 2016) - - - 4,931 Mikael Rönnblad (member since 15 May 2017) - - - 3,435 Sirpa-Helena Sormunen (member since 1 September 2014) - 1,777 1,879 6,012 Tiina Tuomela 3,902 2,563 2,117 7,206 Shares delivered to former members of the Fortum Executive Management during their term Former members total 25,111 7,802 - - 1) For the 2013-2018, 2014-2019, 2015-2020 and 2016-2021 LTI plans, the number of shares delivered after deduction of taxes and tax related expenses. For the 2017-2019, 2018-2020 and 2019-2021 LTI plans, the shares will be delivered after the three-year earnings period subject to achievement of the earnings criteria 2) After deduction of taxes and tax related expenses 3) Estimated number of shares after deduction of local taxes and tax related expenses. Due to local legislation, share rights will be paid in cash instead of shares after the three-year lock-up period 4) Shares delivered before or after the term in the Fortum Executive Management are not disclosed Back to Remuneration site Go back Back up Breadcrumb About us Investors Corporate governance Remuneration Remuneration for the President and CEO and the Executive Management Team Footer Products Recycled oils Recycled plastics Nuclide removal Licensing and safety design Otso bio-oil Services Environmental construction Hazardous waste treatment Turbines and generators Power plant O&M and performance Find charging stations About us This is Fortum Sustainability approach Investors Open positions Media room Contact us All contacts Give feedback Supplier inquiries Sales contacts Raise a concern Social menu Fortum 2019. All rights reserved Data privacy and cookies Legal Notice