Remuneration of the Board of Directors

The key principles guiding the remuneration of the members of Terrafame’s Board of Directors are transparency, fairness and consistency when compared to other market operators. The fees payable to the members of the Board consist of a fixed fee for the duration of their term of office, confirmed by the AGM. The fixed fee paid to the members of the Board must be sufficiently competitive to attract and engage skilled and highly competent people with the capacity to serve as Board members.

The Annual General Meeting (AGM) decides on the remuneration payable to the Board Members. Subject to as in each case decided by the AGM the Board remuneration may consist of the elements described below.

The remuneration of the Board Members may consist of a fixed fee for the term of office and meeting fees paid for each meeting attended. The fees may vary based on e.g. specific role or position in the Board or its committees, specific tasks designated to individual Board Members or the geographical location of the meeting. The fees are paid in cash. Travel expenses of independent Board Members are compensated in accordance with Company policy.

The Board Members have no share incentive plans, share-based compensation plans or pension plans. In order to safeguard the Board Members’ independence in the performance of their duties, they are also excluded from the remuneration plans and incentive schemes of the executive management and other personnel.

In accordance with the above and subject to as in each case decided by the AGM there shall be no variable remuneration paid to the Board Members or any performance-based compensation. None of the above-described remuneration elements which will become payable to Board Members are regarded as variable remuneration.

The Chair of the Board is paid an annual fee of EUR 72,000. The annual remuneration of a member of the Board is EUR 36,000. The Chair and members of the Board are also paid a meeting fee of EUR 600 based on meeting attendance.

Terrafame reports on the remuneration of the Board of Directors as part of the annually published remuneration report.

Remuneration of CEO

The remuneration of the CEO aims at providing competitive rewards in line with market practice within the confines of the company's Remuneration Policy. The fixed compensation elements consist of the fixed base salary and fringe benefits. Incentives as variable compensation elements emphasize pay-for-performance and the achievement of Terrafame’s short- and long-term goals thus aligning the interests of the CEO with the interest of Terrafame’s shareholders. 

Seppo Voutilainen has been appointed as Terrafame Ltd’s CEO in March 2024. Voutilainen acted as Terrafame’s interim CEO since January 2024. The company’s former CEO, Joni Lukkaroinen, left his position in January 2024. He served as CEO since 2016.

CEO Voutilainen’s fixed base salary is EUR 25,000 per month, and CEO Lukkaroinen’s fixed base salary was EUR 29,280 per month. CEO Voutilainen’s fringe benefits include the telephone benefit. CEO Lukkaroinen’s fringe benefits included the telephone benefit, the electric car recharging benefit in the workplace and the connectivity benefit at home.

The CEO is involved in the company's three-year rolling long-term incentive scheme, in which the following programs have been initiated:

The rewards under the programmes will be paid provided that the performance targets set by the Board of Directors are achieved. The targets set for the LTI programmes are related to production, financial profitability and sustainability. Their purpose is to support Terrafame’s development and success and the achievement of its strategic and corporate sustainability goals over the long term.

The remuneration of CEO is detailed in the company's annually published remuneration report.

CEO's pension, retirement age and redundancy pay

The retirement age of the CEO and his/her pension is determined based on statutory pension. The CEO does not have a defined contribution or other similar supplementary pension plan.

The period of notice for the CEO is six months at the maximum. The aggregate severance package of the CEO, including the salary for the notice period and the severance pay, may be up to the equivalent of twelve months’ salary.

The treatment of rewards based on ongoing STI and LTI plan(s) will depend on the circumstances of the CEO’s departure. In case of retirement or death or in case of termination at the initiative of the Company, the CEO may be entitled to the STI and LTI reward(s) or a portion there of as determined by the Board based on the rules of the respective incentive scheme. If the CEO terminates his/her contract at his/her own initiative, the unvested rewards are as a main rule forfeited.

Remuneration of the other members of the Leadership Team

Salary

Fixed monthly salary.

The members of the Leadership Team do not have any fringe benefits other than mobile phone and internet services

Performance bonuses

The maximum amount of performance bonuses for the members of the Leadership Team is a sum corresponding to three (3) months’ salary.

The members of the Leadership Team are also covered by the company’s long-term incentive scheme

Pension

The retirement age of the members of the Leadership Team is determined in accordance with the pension laws, and the amount of their pension is determined in line with the employer’s pension insurance (TyEL).

The members of the Leadership Team are not covered by a contribution-based pension plan or any other additional pension plans.

Conditions for termination of employment

The members of the Leadership Team have a notice period of three months or in accordance with the Employment Contracts Act.

If the employer terminates the contract, the maximum amount of compensation corresponds to three months’ salary. No other compensation is paid based on the termination of employment.

Incentive schemes

The other members of the Leadership Team are covered by Terrafame’s incentive schemes in accordance with their current terms and conditions.

Fees and other benefits

Salaries and fees for the 2024 calendar year were paid to the Leadership Team, excluding the CEO, as follows:

The remuneration of the CEO is reported in the annually published remuneration report.