Remune­ration of the Group CEO

Remune­ration of the Group CEO

The Board of Directors decides on the Group CEO’s remuneration and other terms of the service relationship. The remuneration of the Group CEO is evaluated annually and is based on the remuneration principles and policies applied by the company. Sampo plc’s Remuneration Policy for Governing Bodies in force will be applied to the remuneration of Mandatum’s Group CEO until Mandatum plc’s first Annual General Meeting where Mandatum’s own Remuneration Policy for Governing Bodies will be presented.

Sampo plc's Remuneration Policy for Governing Bodies

 

Forms of remuneration

The remuneration of the Group CEO includes a fixed salary, benefits (fringe benefits and other benefits) and possible short- and long-term incentives. Furthermore, the Group CEO has a defined contribution pension plan. More detailed information on the remuneration of the Group CEO in 2023 is presented in the Remuneration Report for Governing Bodies 2023, which will be published in spring 2024.

 

Fixed salary and benefits

The Group CEO is paid a fixed monthly salary, which is compensation for the responsibilities of the job based on the demand level, taking into account the Group CEO’s experience in the job and the market practices for remuneration.

The monthly fixed salary paid to the Group CEO, Petri Niemisvirta, is EUR 32,500 as of 1 October 2023. In addition to the monthly salary, the Group CEO is entitled to fringe benefits (such as phone and meal benefit) and other financial benefits (such as health, travel and accident insurance). Fringe benefits are processed in the salary in accordance with the company's general practice.

The Group CEO is entitled to reimbursement of travel costs in line with the company’s travel policy.

 

Short-term incentives

The Board of Directors decides on one-year short-term incentive programs separately each year and the cash payouts the following year. The Group CEO participates in a one-year short-term incentive program where the payout is based on financial and non-financial performance criteria. For 2023, the targets of the short-term incentive program are divided into Sampo Group targets and Mandatum Group targets. For the period January–September, the targets of the Group CEO are based on Sampo Group’s strategy and its key performance indicators, including both qualitative and quantitative criteria. The targets of the short-term incentive program are divided into three main sections: i) Sampo Group’s targets, including i.a. insurance dividend, ii) targets related to Mandatum Group, including financial and non-financial key targets and iii) ESG-related metrics. For October–December, the Group CEO’s targets are based on the key targets set for Mandatum Group in the beginning of 2023 and on the ESG target set by Mandatum plc’s Board of Directors. A threshold level based on Sampo plc’s earnings per share (EPS) has been set for the incentive program.

The maximum amount that can be paid to the Group CEO from the short-term incentive program corresponds to nine (9) months’ fixed salary. Any possible reward will be paid at the earliest in March 2024 and part of the payout shall be deferred for at least three (3) years as required in the regulatory framework applicable to Mandatum.

The Group CEO may transfer part of the short-term incentive payout to the personnel fund under the same terms as for Mandatum personnel.

 

Long-term incentives

The Board of Directors decides on long-term incentive schemes and the cash payouts from the schemes. The Group CEO was previously a member of Sampo Group Executive Committee and therefore participates in the long-term incentive scheme 2020:1 for Sampo Group’s key employees, to which the Group CEO was invited to participate in 2020. In the long-term incentive scheme for key employees at Sampo Group, the payout is determined based on the development of the Sampo A share price and Mandatum plc’s share price as well as the paid dividends. The payout is made in three annual instalments of which the first was paid in September 2023, and was based on the development of the Sampo A share price and the paid dividends. The Group CEO has 91,000 allocated incentive units left in the 2020:1 scheme (vesting in 2024 and 2025). The Group CEO is obliged to purchase Sampo A shares with 50 per cent of each instalment after deducting income tax and other comparable charges. The shares are subject to a disposal restriction for three years, after which the Board shall decide whether the shares will be released.

The Group CEO may with the decision of the Board of Directors, participate in Mandatum’s long-term incentive schemes if the company’s Board of Directors decides to launch incentive schemes.

More information on long-term incentive schemes

There are no formal requirements on ownership of Mandatum shares for the Group CEO, with the exception of the share ownership obligations based on Sampo plc’s LTI scheme. Up-to-date information on the Group CEO’s share ownership is available on the website here.

 

Pension

In addition to Finland’s statutory pension system, the Group CEO is entitled to a supplementary defined contribution pension plan, which commences at the age of 63. The premium paid by the company into the supplementary pension plan in 2023 was EUR 62,500. The payment for the year 2023 was based on the earnings period from October 1st to December 31st, 2023.

 

Termination of the service relationship

The notice period for terminating the service contract of the Group CEO is six months for the company, and three months when the Group CEO terminates the contract. Salary shall be paid during the notice period.

The company is also entitled to terminate the service contract immediately without a notice period so that the salary for the notice period is paid to the Group CEO as a lump-sum compensation. If the company has a weighty cause to cancel the service contract as stipulated in the Employment Contracts Act, chapter 8, section 1, the service contract can be terminated with immediate effect without a period of notice. In this case, no salary for the notice period or other severance compensation shall be paid.

If the service contract is terminated by the company without a reason that constitutes grounds for cancellation as stipulated in the Employment Contracts Act, chapter 8, section 1, the Group CEO shall be paid a compensation corresponding to 18 months’ fixed monthly salary in addition to the salary for the notice period.

The employment contract of the Group CEO ends without notice when the Group CEO turns 63.

12.10.2023