In accordance with the Remuneration Policy, the People and Sustainability Committee prepares and the Board of Directors approves the principles concerning remuneration systems and decides on the CEO’s and Deputy CEO’s salaries and bonuses and the key terms and conditions of their service contract. The CEO and the Deputy CEO receive an annual remuneration in accordance with the remuneration policy, consisting of the following fixed and variable components: fixed annual salary, pension, short-term incentives, long-term incentives, one-off remuneration and benefits.

Mika Rautiainen was the CEO of Tokmanni Group throughout the financial year 2024 and Tapio Arimo was the Deputy CEO.

Total remuneration of the CEO, the Deputy CEO and the other Executive Team members in 2024 (in euros)

In 2024, the fixed component of the CEO’s annual salary was 61.5% of the total remuneration, while the short-term and long-term bonuses paid were 32.7% and the supplementary pension was 5.8%.

In 2024, the fixed component of the Deputy CEO’s annual salary was 71.6% of the total remuneration, while the short-term and long-term bonuses paid were 21.5% and the supplementary pension was 6.9%.

The CEO and the Deputy CEO have valid health insurance that also covers treatment expenses and medication for accidents during leisure time. The Group CEO and the Deputy CEO also have a phone benefit and the option of a car benefit.

Short-term performance-based bonus in cash

The maximum amount of the cash bonus paid to the CEO under the short-term incentive scheme was set at 53.8% of his fixed annual salary in the 2023 performance-based bonus scheme. The bonus for the 2023 incentive scheme was based on revenue (total revenue growth) and performance (comparable gross profit %, comparable EBIT) targets and the turnover of inventories. In 2023, the CEO’s success rate in achieving the targets of the short-term incentive scheme was 26.8% of the maximum bonus, resulting in a cash bonus of 14.4% of the fixed salary for 2023. The amount payable in cash was EUR 64,076 and it was paid in 2024.

The maximum amount of the cash bonus paid to the CEO under the short-term incentive scheme was set at 61.8% of his fixed annual salary in the 2024 performance-based bonus scheme. The bonus for the 2024 incentive scheme was based on revenue (total consolidated revenue growth) and performance (consolidated and Tokmanni segment’s comparable EBIT) targets and achieved synergies. In 2024, the CEO’s success rate in achieving the targets of the short-term incentive scheme was 11.0% of the maximum bonus, resulting in a cash bonus of 6.8% of the fixed salary for 2024. The amount payable in cash was EUR 29,938 and it will be paid in 2025.

Short-term performance-based bonus

Pension benefits

The pensions of key members of Tokmanni Group’s management are determined in line with the general provisions applied in Finland to employee pensions (Employee Pensions Act). In 2023, contributions to a supplementary pension insurance for the CEO were paid as part of an incentive scheme. The CEO’s statutory pension expenses amounted to EUR 81,845.32 in 2024 (94,333.06). The company’s pension cover is arranged by external pension insurance companies. Pension expenditure is recognised as an expense in the year in which it is accrued.

Based on the 2023 performance-based bonus scheme, the CEO was paid voluntary supplementary pension contributions amounting to 2.0% of the fixed annual salary paid in 2023. From 2024 onwards, the supplementary pension has no longer been linked to the performance bonus and is a separate item of 10% of the basic salary of the CEO and Deputy CEO. The supplementary pension is paid every six months by the company to a company that provides pension insurance.

Long-term performance-based bonus in shares

The bonus paid to the CEO in 2023 under the share-based incentive scheme was based on the 2022 long-term incentive scheme, and the earning period for this scheme was the year 2022. The bonus was paid partly in shares of the company and partly in cash. The cash component covered the tax consequences of the bonus paid.

Under the terms and conditions of the 2022, share-based incentive scheme, the maximum bonus for the CEO was 63.2% of the fixed annual salary for the earning period. The performance indicators used in the scheme were the company’s earnings per share with a weighting of 60%, the price performance of the company’s share with a weighting of 30%, and the reduction of emissions from own operations with a weighting of 10%. The success rate in achieving the targets was 10.0% of the maximum bonus in 2022, resulting in a bonus of 6.3% of the fixed annual salary for 2022. The bonus amounted to EUR 25,112, half of which was paid in cash and half in shares in 2023. The number of shares was determined according to the average closing price (EUR 12.19) on the last stock exchange trading day of each quarter in 2022. The shares are subject to a lock-up period of two years after the year they are earned.

Under the terms and conditions of the 2023, share-based incentive scheme, the maximum bonus paid to the CEO was 63.2% of the fixed annual salary for the earning period. The scheme’s performance indicators were company earnings per share with a 50% weighting, Tokmanni’s total shareholder return compared to peer companies with a 40% weighting and customer perception of Tokmanni’s sustainability with a 10% weighting. The success rate in achieving the targets was 45.0% of the maximum bonus in 2023, resulting in a bonus of 28.4% of the fixed annual salary for 2023. The bonus amounted to EUR 126,389, half of which will be paid in cash and half in shares in 2024. The number of shares was determined according to the average closing price (EUR 13.11) on the last stock exchange trading day of each quarter in 2023. The shares are subject to a lock-up period of two years after the year they are earned.

A share-based bonus scheme for Group CEO retention

In addition, on 13 December 2023, Tokmanni Group Corporation’s Board of Directors decided to launch a Restricted Share Plan (RSP). It is intended to be used as a complementary share-based retention scheme. The first individual plan, RSP 2024–2026, commenced at the beginning of 2024 and the share rewards payable thereunder will be paid in annual tranches during the plan’s restriction period. The Board of Directors will decide separately on each new plan, its earning period and related details.

In 2024, Tokmanni Group Corporation assigned 2,000 of its own shares under the RSP scheme as a share bonus to the Group CEO and paid a cash equivalent of another 2,000 shares for the payment of taxes.

Termination benefits

If the company gives notice to the CEO, he will have the right to receive compensation corresponding to 12 months’ total pay. Under corresponding circumstances, the other members of the Executive Team, including the Deputy CEO, will have the right to compensation corresponding to a maximum of nine months’ total pay.

Other financial benefits

No other financial benefits in addition to those described above were paid to the CEO or the Deputy CEO in 2024.