Remuneration

The remuneration at Kemira is designed to drive the company’s long-term financial success, business strategy and positive development of the shareholder value.

Kemira’s key remuneration principles are:

• Pay-for-performance is Kemira’s main principle in remuneration. Kemira acknowledges and rewards for good performance and achievements. Kemira strives to establish a clear link between company and employee performance and success.
• Competitive, market driven remuneration ensures that Kemira can attract, motivate and retain the best employees for Kemira. Kemira regularly benchmarks its remuneration against relevant geographic and industry market.
• Effective communication of remuneration principles and programs ensures transparency both internally and externally. Reward principles and programs are communicated to employees and external stakeholders.
• Compliance with local laws and Kemira’s internal remuneration approval principles is a prerequisite for remuneration at Kemira. Kemira has implemented internal controls to ensure compliance.

These key remuneration principles are applied to the President & CEO, the operative management as well as to all Kemira employees.

The General Meeting decides on the remuneration of the Board. The Nomination Board, consisting of the representatives of the four largest shareholders of Kemira Oyj, prepares annually a proposal for the next General Meeting concerning the composition and remuneration of the Board.

The Board decides the salaries, other remuneration, and the terms of service of the President & CEO, the deputy CEO and the management board, based on the proposal by the Personnel and Remuneration Committee. The Board may delegate its decision-making authority to the Committee. To avoid conflicts of interest, the majority of the Committee members must be independent of the company, and the President & CEO or any member of the Management Board of Kemira may not be a member of the Committee. The President & CEO is not involved in the decision-making process of his or her remuneration.

Incentive plans involving a share issue, an issue of option rights or special rights entitling one to shares must be based on a share issue approval by the General Meeting or an authorization by the General Meeting to the Board to decide on the share issue.

According to the decisions made in the Annual General Meeting 2023, the members of the Board of Directors are paid an annual fee and a fee per meeting. The members of the Board of Directors are not eligible for the short-term bonus plan or the long-term share incentive plan, or supplementary pension plans of Kemira Oyj.

The annual fees are as follows:

• the Chair will receive EUR 118,000 per year,
• the Vice Chair and the Chair of the Audit Committee EUR 67,000 per year and
• the other members EUR 52,000 per year.

A fee payable for each meeting of the Board and the Board Committees will be paid based on the method and place of the meeting as follows:

• EUR 600 for each meeting remotely participated or in the member’s country of residence
• EUR 1,200 for each meeting participated on the same continent, and
• EUR 2,400 for each meeting participated on a different continent than the member’s country of the residence.

The meeting fees are to be paid in cash. Travel expenses are reimbursed according to Kemira’ s travel policy.

In addition, the Annual General Meeting decided that the annual fee shall be paid as a combination of the company’s shares and cash in such a manner that 40% of the annual fee is paid with Kemira shares owned by the company or, if this is not possible, Kemira shares acquired from the securities market, and 60% is paid in cash. The Annual General Meeting decided that the shares will be transferred to the members of the Board of Directors within two weeks after the release of Kemira’ s interim report January 1–March 31, 2023. There are no special terms or conditions associated with owning these shares.

The following amounts of shares were paid on May 9, 2023 as part of the annual fee decided by the Annual General Meeting 2023:

• the Chair received 3,019 shares
• the Vice Chair and Chair of the Audit Committee 1,714 shares
• the other members 1,330 shares.

Employment terms

Base salary and benefits

Supplementary pension

Short-term incentives (STI)

Long-term incentives (LTI)

Based on the terms of the share plan, the maximum reward is determined as a number of shares and a cash portion intended to cover taxes and the tax related costs arising from the reward.

Performance period 2020-2022 and due payment:

Performance period 2019–2021 and due payment:

Performance period 2020 and due payment 2021:

Ongoing LTI Plans

Termination

Insurances

Remuneration of the Management Board comprises a base salary, benefits and performance-based incentive plans. The incentive plans consist of an annual short-term bonus plan and a long-term share incentive plan.

Main employment terms of the Management Board

Short-term incentives (STI)

The short-term bonus plan for the members of the Management Board is determined based on the achievement of the Kemira Group, Segment level and role-based targets set by the Board of Directors for each financial year.

The maximum bonus for the members of the Management Board is 60% to 80% of the annual base salary.

The performance criteria 2023 are determined on the basis of Group operative cash flow after investing activities, Group or Segment level operative EBIT in EUR, Group or Segment level Organic Revenue Growth in EUR, safety related KPI’s of Kemira Group, and role based targets.

The performance criteria 2022 were determined on the basis of Group operative cash flow after investing activities, Group or Segment level operative EBIT in EUR, Group or Segment level Organic Revenue Growth in EUR, safety related KPI’s of Kemira Group, and role based targets.

Long-term incentives (LTI)

The objective of the long-term share incentive plans is to combine the interests of the shareholders and the members of the Management Board in order to increase the value of Kemira and to commit the members of the Management Board to Kemira.

Termination

Depending on country practices, mutual termination notice period of 1 to 6 months applies to the members of the Management Board. In addition, a severance payment of 6 to 9 months’ salary is paid to the member of the Management Board if the company terminates the employment agreement without a cause attributable to the person.

Insurances

The members of the Management Board are entitled for life and permanent disability, private accident, business travel, and directors’ and officers’ liability insurances, and participate in the company sickness fund or other similar arrangement.

Pension

The Management Board members who are employed by a Finnish Kemira company do not have any supplementary pension arrangements in addition to the statutory pensions. Members of the Management Board who are employed by a foreign Kemira company participate in pension systems based on statutory pension arrangements and market practices in their local countries.

Remuneration of the Management Board for the preceding financial year (2022)

Individual figures presented in the table have been rounded to the nearest exact figure. Therefore, the sum of the individual figures may deviate from the total figure.

* Members of the Management Board in 2022: Petri Castrén, Matthew R. Pixton, Antti Salminen, Esa-Matti Puputti, Eeva Salonen, Kim Poulsen (until May 18, 2022) and Wido Waelput (interim as of September 1, 2022)

Long-term share incentive plan 2022-2026

Decision-making
In December 2021, the Board of Directors of Kemira Oyj decided to establish a long-term share incentive plan for the years 2022-2026 directed to a group of key employees in Kemira.

Earning periods and criteria
The long-term share incentive plan includes three three-year performance periods: years 2022-2024, 2023-2025 and 2024-2026.
In the beginning of each performance period, the Board of Directors decides on the plan’s performance criteria, the required performance levels for each criterion, and the plan’s participants and share allocations during the performance period.

• During the performance period 2022-2024, the long-term share incentive plan is directed to approximately 90 people. The rewards potentially payable on the basis of the performance period 2022-2024 may amount up to a maximum total of 643,500 Kemira Oyj shares.
• The performance criteria for 2022-2024 are the following: Average Intrinsic Value (2022-2024) and Average Organic Revenue Growth % p.a. (2022-2024). The possible reward is paid in 2025.
• During the performance period 2023-2025, the long-term share incentive plan is directed to approximately 90 people. The rewards potentially payable on the basis of the performance period 2023-2025 may amount up to a maximum total of 643,500 Kemira Oyj shares.
• The performance criteria for 2023-2025 are the following: Average Return on Capital Employed % (ROCE-%) p.a., Average Organic Revenue Growth % p.a., Kemira CO2 emission reduction from Scope 1 & 2 by 2025, and Revenue Growth of Biobased products by 2025. The possible reward is paid in 2026.

Rewards
The potential reward will be paid partly in Kemira’s shares and partly in cash. The cash portion is intended to cover the taxes and tax-related costs arising from the reward to the participant.

Employment
As a rule, no reward will be paid, if a participant’s employment or service ends before the reward payment.

Clawback
Clawback provisions apply to plan rewards in exceptional circumstances, such as misconduct or misstatement of financial results.

Share ownership guidelines
The Board of Directors recommends that a member of the Management Board will own such number of Kemira’s shares that the total value of his or her shareholding corresponds to the value of his or her annual gross salary as long as the membership continues. If this recommendation is not yet fulfilled, the Board of Directors recommends that a member of the Management Board will hold 50 per cent of the number of shares given on the basis of this plan also after the end of the restriction period, as long as his or her shareholding in total corresponds to the value of his or her annual gross salary.

Long-term share incentive plan 2019-2023

Decision-making
In December 2018, the Board of Directors of Kemira Oyj decided to establish a long-term share incentive plan for the years 2019 – 2023 directed to a group of key employees in Kemira. The Personnel and Remuneration Committee received advice for the planning work of the long-term share incentive plan from an external incentive advisor.

Earning periods and criteria
The long-term share incentive plan includes two one-year performance periods, years 2019 and 2020, and three three-year performance periods: years 2019-2021, 2020-2022 and 2021-2023. This structure enables a gradual shift from one-year performance periods to three-year performance periods. In the beginning of each performance period, the Board of Directors decides on the plan’s performance criteria, the required performance levels for each criterion, and the plan’s participants and share allocations during the performance period.

• For the performance period 2019, the performance criterion was Kemira Group’s Intrinsic Value, and the reward was paid out in 2020. The outcome for the 2019 performance period was 100%.
• For the performance period 2019-2021, the performance criterion was Kemira Group’s average Intrinsic Value 2019-2021, and the reward was paid out in 2022. The outcome for the 2019-2021 performance period was 86%.
• During the performance periods 2019 and 2019-2021, the long-term share incentive plan was directed to approximately 90 people. The rewards payable on the basis of the performance periods 2019 and 2019-2021 may had amounted up to a maximum of 643,500 Kemira Oyj shares.
• For the performance period 2020, the performance criterion was Kemira Group’s Intrinsic Value, and the reward was paid in 2021. The outcome for the 2020 performance period was 68%.
• For the performance period 2020-2022, the performance criterion were Kemira Group’s average Intrinsic Value 2020-2022 and Kemira Group’s average Organic Growth % p.a. 2020-2022, and the reward was paid in 2023. The outcome for the 2020-2022 performance period was 100%.
• During the performance periods 2020 and 2020-2022, the long-term share incentive plan is directed to approximately 90 people. The rewards payable on the basis of the performance periods 2020 and 2020-2022 may had amounted up to a maximum total of 643,500 Kemira Oyj shares.
• For the performance period 2021-2023, the performance criterion are Kemira Group’s average Intrinsic Value 2021-2023 and Kemira Group’s average Organic Growth % p.a. 2021-2023, and the potential reward will be paid out in 2024.
• During the performance period 2021-2023, the long-term share incentive plan is directed to approximately 90 people. The rewards potentially payable on the basis of the performance period 2021-2023 may amount up to a maximum total of 643,500 Kemira Oyj shares.
• Intrinsic Value is defined as: operative EBITDA * 8 – net debt

Rewards
The potential reward will be paid partly in Kemira’s shares and partly in cash. The cash portion is intended to cover the taxes and tax-related costs arising from the reward to the participant.

Restriction
For the one-year performance periods (2019 and 2020), the shares paid as reward may not be transferred during the restriction period, which will end two years from the end of the performance period. No restriction period applies to the three-year performance periods.

Employment
As a rule, no reward will be paid, if a participant’s employment or service ends before the reward payment. Should a participant’s employment or service end during the restriction period, as a rule, he or she must gratuitously return to the company the shares given as reward.

Clawback
Clawback provisions apply to plan rewards in exceptional circumstances, such as misconduct or misstatement of financial results.

Share ownership guidelines
The Board of Directors recommends that a member of the Management Board will own such number of Kemira’s shares that the total value of his or her shareholding corresponds to the value of his or her annual gross salary as long as the membership continues. If this recommendation is not yet fulfilled, the Board of Directors recommends that a member of the Management Board will hold 50 per cent of the number of shares given on the basis of this plan also after the end of the restriction period, as long as his or her shareholding in total corresponds to the value of his or her annual gross salary.

Remuneration Report 2021
Remuneration Report 2020
Remuneration Statement 2019
Remuneration Statement 2018
Remuneration Statement 2017
Remuneration Statement 2016