Remune­ration of the Manage­ment Team

Remune­ration of the Manage­ment Team

Decision-making procedure concerning remuneration

The Board of Directors decides, based on the Remuneration Committee’s proposal, on the remuneration and other terms of employment or service relationship and on the remuneration principles for the Group Management Team members. The Group CEO prepares proposals on the remuneration of the Group Management Team members, excluding himself, to the Remuneration Committee.

 

Forms of remuneration

The remuneration of the members of the Group Management Team is evaluated annually and is based on the Remuneration Principles applied by the company. The remuneration of the members of the Group Management Team includes a fixed salary, benefits (fringe benefits and other benefits), a supplementary defined contribution pension plan and possible short- and long-term incentives.

 

Fixed salary and other benefits

The members of the Group Management Team are paid a fixed salary, which can include fringe benefits offered by the company to personnel, such as a phone benefit, meal benefit, car benefit, apartment benefit and other ordinary benefits. The meal benefit and phone benefit are paid on top of the salary in accordance with the company’s common practice. Insurance benefits include health, travel and accident insurance, life and disability insurance and liability insurance for management.

 

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 members of the Group Management Team participate in the 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 based on Mandatum Group’s strategy and its key performance indicators, including both qualitative and quantitative criteria. The STI targets are divided into Mandatum Group’s key targets and the key targets of the business units, including possible ESG indicators. In addition to these performance criteria, a threshold level based on the company’s result has been set for the incentive program.

The maximum amount that can be paid to the members of the Group Management Team from the short-term incentive program corresponds to six (6) or twelve (12) months’ fixed salary. Part of the payout shall be deferred for at least three (3) years as required in the regulatory framework applicable to the company.

The members of the Group Management Team may transfer part of their short-term incentive payout to the personnel fund under the same terms as for Mandatum’s other personnel.

 

Long-term incentives

The Board of Directors decides on long-term incentive schemes and the cash payouts made from the schemes. The members of the Group Management Team participate in the long-term incentive scheme 2020:1 for Sampo Group’s key employees, to which they were 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 members of the Group Management Team have altogether 148,750 allocated incentive units left in the 2020:1 scheme (vesting in 2024 and 2025). The members of the Group Management Team are 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 members of the Group Management Team may 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

 

Pension

The members of the Group Management Team are entitled to a supplementary defined contribution pension plan. The pension premium is determined based on the outcome of Mandatum Group key targets used in the short-term incentive program, and it cannot exceed an amount corresponding to a fixed monthly salary of 1.8 months. The retirement age is 60 years.

 

Termination of the employment relationship

The notice period for the Group Management Team members is determined in accordance with the Employment Contracts Act or the terms and conditions of the employment contracts. The notice period is at least one month and, when determined based on the Employment Contracts Act, a notice period based on the number of employment years is applied. The members of the Group Management Team are entitled to salary during the notice period.

The members of the Group Management Team are not entitled to benefits after the employment relationship ends.

12.10.2023