Fees and benefits

The Annual General Meeting decides on the remuneration of the Board of Directors.

The Board of Directors of Olvi plc shall prepare and confirm the salary, fringe benefits (total salary), short-term incentives and long-term share-based incentive plans for the Managing Director within the framework of the Remuneration Policy presented to the General Meeting.

Starting from 2020 the remuneration of the Board of Directors and the Managing Director is reported in Remuneration Report in the Annual Report.

Remuneration to other top management

The structure of total remuneration to management comprises a fixed remuneration, consisting of the basic salary and fringe benefits (unlimited car and mobile phone benefit), as well as short-term and long-term incentives.

Fixed remuneration

The Board of Directors decides on the terms of service of other top management based on the Managing Director’s proposal. Other management executives do not receive separate remuneration for their work in the management group or other internal management bodies within Olvi Group.

Short-term incentives (STI) 

Short-term incentives are performance bonus schemes in which the monitoring period is at most one accounting period. The Board of Directors decides on the basis for the determination of incentives. The goal of short-term remuneration is to encourage and reward the realisation of the short-term business strategy and the achievement of operational and financial targets.

The maximum performance bonus payable to members of the management group is 40 per cent of annual income determined based on basic monthly income, and it is based on the achievement of the operating profit and operational development targets set by the Board of Directors for the monitoring period in question.

Long-term incentives (LTI)

The objectives of long-term incentives include increasing the shareholder value, improving competitiveness, supporting profitable growth and relative profitability, and making the operational management and key employees committed to the company.

Share-based incentive plans have a performance period of at least two years. Performance is assessed against the criteria at the end of the performance period, and any rewards to be paid depend on the level of success in achieving the set targets.

The 2021–2022 Matching Share Plan consists of one matching period covering the 2021–2022 financial years. Under the plan, members of the management group can acquire additional shares by investing personally in shares in the company. They can earn one share for each share they have acquired. The rewards based on the plan will be paid after the end of the matching period. The maximum reward for members of the management group is 1,800 shares and a cash portion to cover taxes and tax-like payments arising from the share reward. The rewards depend on the validity of the employment relationship at the time of payment.

The 2021–2024 Performance Share Plan consists of three performance periods, covering the 2021–2022, 2021–2023 and 2022–2024 financial years. The rewards to be paid for the 2021–2022 and 2021–2023 performance periods are based on the Group’s cumulative euro-denominated operating profit and the increase in the sales volume of non-alcoholic products. The rewards to be paid for the 2022–2024 performance period are based on the cumulative euro-denominated operating profit, the increase in the sales volume of non-alcoholic products, and the reduction of CO2 emissions in the whole value chain.

If the targets are achieved in full, the members of the management group can earn 2,100 shares for the 2021–2022 performance period, 3,900 shares for the 2021–2023 performance period and 3,600 shares for the 2022–2024 performance period, as well as a cash portion to cover taxes and tax-like payments arising from the share reward. The rewards will be paid at the same time after the end of the performance period. The rewards depend on the validity of the employment relationship at the time of payment.

Members of the management group must own at least half of the shares they have earned as a net reward under the new incentive plan launched in 2021, until the total value of their shareholding in the company equals half their annual salary in the previous year. This number of shares in the company must be held for as long as the membership in the management group continues.

A more detailed description of the existing incentive schemes can be found in the financial releases.

Pension 

The pension of members of the management group is determined in accordance with valid legislation. They belong to the Finnish TyEL pension scheme. A member can retire on old-age pension between 63 and 68 years of age, and the pension is determined on the basis of an increasing percentage. The company’s pension schemes are defined contribution plans.

Terms and conditions of termination and serving notice

Terms and conditions of termination and serving notice of other management are determined on the basis of the collective agreement applied by the company. The company has no severance pay agreement.