CONTACTS CAREERS INVESTORS COMPANY PRODUCTS AND SERVICES Investors Corporate Governance Remuneration Remuneration The important principles of Componenta guiding remuneration are remuneration based on performance and overall remuneration of personnel. Componenta seeks to motivate, attract and retain skilled persons with remuneration. The objective of remuneration is to contribute to the favourable development of shareholder value, to develop the company’s performance and to help the company in fulfilling its business strategy and in attaining the long-term financial benefits. Remuneration is one of the most important ways to ensure that the company’s employees understand the result targets, their own possibilities to influence the results and the causal connection between the result of operations and remuneration. Componenta aims to keep the remuneration principles and practices comprehensible and transparent. Read more in our Remuneration Policy >> Decision-making process The General Meeting of Componenta decides on the Board’s remuneration. The Shareholders’ Nomination Board prepares well-grounded proposals for the General Meeting regarding the election and remuneration of Board members and usually also presents the proposals to the General Meeting. The Shareholders’ Nomination Board consists of the company’s largest shareholders. The Board of Directors of Componenta appoints the President and CEO and approves the terms andconditions of the President and CEO’s contract of service, as well as the salaries and remuneration payable to the President and CEO. The Board also decides on the salaries and remuneration of the members of the Corporate Executive Team on the basis of the proposal of the President and CEO, in accordance with the ”one over one” approval principle applied in the Group. Remuneration of the Board of Directors 2020 Remuneration of the Board members is based on the annual fee approved by the General Meeting. Tthe Annual General Meeting held on 16 April 2020 decided that the following fixed annual fees will be paid to the Board members for their term of office that ends at the close of the next Annual General Meeting:Chairman of the Board of Directors EUR 50,000, Members of the Board of Directors EUR 25,000 , and the members of possible committees reporting to the Board of Directors EUR 5,000. In 2020, in accordance with the decision of the Gen­eral Meeting, the Board members were paid a total of EUR 125,000 as annual remuneration. The remuner­ation of the Board of Directors was paid in full in cash. In accordance with the decision of the General Meet­ing, the travel expenses of the members of the Board of Directors were reimbursed in accordance with the company’s travel policy. The Board of Directors did not establish any committees from among its mem­bers in the financial year 2020. No variable compen­sation or performance-based bonuses were paid to the members of the Board of Directors. The remuner­ation of the Board of Directors was consistent with the remuneration policy during 2020. Remuneration principles regarding management The total remuneration of the President and CEO and other members of the Corporate Executive Team consists of a fixed part, i.e. a monthly salary and fringe benefits (including company phone) and of a variable part comprising short-term and long-term incentive schemes. The fixed part of the remuneration of members of the Corporate Executive Team includes compensation for any work they perform in the Boards of Componenta Group’s subsidiaries and affiliate companies. More about incentive schemes and share-based remuneration further down on this page. Remuneration of the President and CEO The President and CEO’s contract of service is valid until further notice. The main terms and conditions of the President and CEO’s contract of service are shown in the table below. Terms and conditions of President and CEO Salary and fringe benefits Total monthly salary EUR 20,000, consisting of a cash salary and possible fringe benefits (phone, meal and car benefits). In addition, the President and CEO is entitled to supplementary health insurance. Short-term incentives The President and CEO is entitled to an incentive based on achievement of financial targets. The maximum amount of the annual total remuneration is equal to the President and CEO’s six months’ total salary. The short-term incentive scheme is discretionary, and the company may amend the terms and conditions or basis of payment of the incentive schemes or discontinue an incentive scheme. The incentive scheme is discussed in closer detail in section “Short-term incentive scheme” below. Long-term incentives The President and CEO is entitled to the share-based incentive schemes for the Group’s key employees, introduced by a Board decision in November 2018, the stock option scheme and a restricted share unit plan. The incentive schemes are discretionary, and the company may amend the terms and conditions or basis of payment of the incentive schemes or discontinue an incentive scheme. The incentive schemes are discussed in closer detail in section “Long-term incentive scheme” below. Pension The President and CEO is covered by the statutory pension scheme. Termination of employment Unless terminated before that time, the President and CEO’s contract of service will end when he reaches the age of 68. The President and CEO’s contract of service can be terminated by the President and CEO by giving three months’ notice and by the company by giving six months’ notice. If the President and CEO’ contract of service is terminated by the company without the President and CEO being guilty of e.g. crimes, dishonest conduct or breach of contract relevant to the company, the President and CEO will be entitled to one-off severance pay equal to six months’ total salary. Remuneration of the President and CEO in 2020 Sami Sivuranta was appointed President and CEO of Componenta on 11 March 2020. Prior to this, Marko Penttinen was the President and CEO of the com­pany in 2020. Remuneration of the President and CEO was consistent with the remuneration policy during 2020. Short-term incentive schemes The current President and CEO is entitled to an incen­tive fee related to achieving the financial objectives. In 2020, the incentive fee paid in cash from the short-term incentive scheme was based on the company’s cash flow, and the maximum remuneration sum was equal to the President and CEO’s total salary for six months. No remuneration was paid to the President and CEO as part of the short-term incentive scheme in 2020, as the company’s cash flow from continuing operations after investments did not reach the mini­mum target. Long-term incentive schemes The current President and CEO is entitled to the share-based incentive schemes for the group’s key employees, introduced by a Board decision on 12 November 2018, including an option scheme and a restricted share plan. Restricted Share Plan By 31 December 2020, a total of 8,119 shares have been allocated to the President and CEO based on the restricted share plan. Overall remuneration of the President and CEO in 2020 In 2020, in accordance with the remuneration policy, the President and CEO was paid a fixed monthly salary of EUR 20,000, comprising both cash and benefits. The President and CEO accrued a total of EUR 33,903 in deferred share-based payments based on the share-based incentive plan. In 2020, there were no requests for refunds regarding the remuneration paid to the President and CEO. Remuneration of the Corporate Executive Team In 2020, the incentive fee paid in cash from the short-term incentive scheme to the Corporate Executive Team was based on the company’s cash flow, and the maximum remuneration sum was equal to the salary for six months of the Corporate Executive Team member. No remuneration was paid to the members of the Corporate Executive Team as part of the short-term incentive scheme in 2020. Short-term incentive scheme The purpose of a short-term incentive scheme is to support the attainment of the set targets and to promote commitment by setting unambiguous and measurable annual targets that have a direct impact on the company’s result. Componenta’s Board of Directors annually sets the terms and objectives of any short-term incentive schemes for the whole group. In accordance with the remuneration policy the maximum remuneration payable to the Presi­dent and CEO from any short-term incentive scheme must not exceed half of his/her fixed annual salary. At its discretion, the Board of Directors may change the criteria for short-term incentives. The remuneration based on short-term incentive schemes is paid in cash. Long-term incentive schemes The purpose of any long-term incentive schemes is to provide an incentive to key employees and to bring their benefits in line with the shareholders’ benefits and the long-term strategy aimed at the stability of business operations. Long-term incentives may con­sist of both performance-based and share-based incentive plans. Based on the remuneration policy, the Board of Direc­tors decides on any long-term incentive schemes, such as share-based remuneration schemes, and determines the earning criteria for perfor­mance-based schemes at the beginning of each scheme. The current value of the potential bonus paid under a long-term incentive scheme can be no more than 30% of the President and CEO’s fixed yearly sal­ary. The current value is always calculated by using a method relevant for the incentive scheme at the beginning of the earning period. The Board of Directors decides on the fees paid under the scheme, and it may also change the criteria for any long-term incentives. Share-based remuneration schemes Adjustments to the company's share-based incentive plans resolved by the Board of Directors The Board of Directors of Componenta Corporation resolved on 12 November 2018 to implement two new share-based incentive plans for the Group key employees, a Stock Option Plan and a Restricted Share Plan. On 18 December 2020, the Board of Directors resolved on adjustments to the company’s share-based incentive plans. These adjustments are based on the rights issue the final results of which were announced on 9 December 2020, and on the reverse share split executed on 18 December 2020. Read more in the stock exchange release >> Stock options 2018 On 12 November 2018, the Board of Directors resolved, by virtue of an authorization granted by the General Meeting, to implement share-based incentive plan for the Group key employees. The purpose of the stock options is to encourage the key employees to work on a long-term basis to increase the shareholder value. The purpose is also to retain the key employees at the company. It is a prerequisite for receiving remuneration based on an option programme that the receiving person’s contract of employment or service is valid at the time the remuneration is paid, but the Board of Directors may decide otherwise at its discretion. Componenta’s option programme has a total of 146,410 rights of option on 31 December 2020, 40,275 of which are marked as option 2018A, 57,230 are marked as option 2018B, and 48,905 are marked as option 2018C. Each stock option entitles its holder to subscribe for two new shares in the company or exist­ing shares held by the company. The maximum total number of shares subscribed by exercising stock options issued is 292,820 shares. The subscription price is EUR 5.25 per share with stock option 2018A; EUR 3.85 per share with stock option 2018B and EUR 3.025 per share with stock option 2018C. The sub­scription period is 1 December 2021 – 30 Novem­ber 2023 for option 2018A, 1 December 2022 – 30 November 2024 for option 2018B, and 1 December 2023 – 30 November 2025 for option 2018C. On 10 February 2020, the Board of Directors resolved to convert stock options 2018A (416,250) that have been returned to the company to stock options 2018B. Read more in the stock exchange release >> On 21 June 2021, The Board of Directors of Componenta Corporation has resolved to convert stock options 2018A and 2018B that have been returned to the company to stock options 2018C. Read more in the stock exchange release >> The terms and conditions of the stock options 2018 (12 November 2018) Restricted share plan On 12 November 2018, the Board of Directors resolved to implement a restricted share plan to key employees. The reward from the restricted share plan is be based on the key employee’s valid employment or ser­vice and the continuation of work during the vest­ing period. In 2020, the restricted share plan was adjusted as a result of the company’s share issue and reverse share split. The amount of the remuneration payable under the plan will be equal to the total value of up to 55,000 shares on 31 December 2020. The reward will be paid partly in the company´s shares and partly in cash after the expiry of a 36 month vesting period that commenced on 12 November 2018 and by the end of December 2021, at the latest. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the key employee. Read more about Componenta's remuneration: Remuneration Reports. Earlier, the Remuneration Report has been included in the Corporate Governance Statements document. Componenta as an investment Stock Exchange Releases Reports and presentations Corporate Governance General Meeting Board of Directors President and CEO Corporate Executive Team Remuneration Corporate Governance Statements incl. 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