The aims of the remuneration system for Orion Corporation’s Board of Directors and executive management are to enhance the Company’s competitiveness and long-term financial success, to achieve the Company’s targets and strategy, and to increase shareholder value.
Remuneration principles concerning the Board of Directors
The remuneration of the members of the Board of Directors is decided on by the Annual General Meeting of the shareholders. The remuneration recommendation to be presented in the invitation to the Annual General Meeting is prepared by the Nomination Committee. The Board of Directors’ remuneration is for work carried out within the Board and its committees.
Remuneration of the Board of Directors in 2024
According to the decision by the AGM 2024, annual fees for the members of the Board are the following:
- EUR 100,000 for the Chair
- EUR 61,000 for the Vice Chair
- EUR 50,000 for the member
However, if a member of the Board acts as the Chair of the Audit Committee or the R&D Committee, her/his annual fee shall be EUR 61,000. Fees for each meeting of the Board and its committees attended are the following:
- EUR 1,200 for the chair
- EUR 900 for the vice chair
- EUR 600 for the member
The travel expenses of the Board members shall be paid in accordance with the previously adopted practice. The meeting attendance fees of Board members permanently resident outside Finland shall be doubled if the meeting is held outside the country of residence of such a member and the person attended the meeting at the place of the meeting.
Of the above-mentioned annual fees, 60 percent shall be paid in cash and 40 percent in Orion Corporation B shares, which shall be acquired for the members over the period 26 April - 3 May 2024 from the stock exchange in amounts corresponding to EUR 40,000 for the Chairman, EUR 24,400 for the Vice Chairman and for the Board members acting as the Chairmen of the Audit Committee and the R&D Committee and EUR 20,000 for each of the other members. The part of the annual fee that is to be paid in cash corresponds to the approximate sum necessary for the payment of the income taxes on the fees and shall be paid no later than 31 May 2024. The annual fees shall encompass the full term of office of the Board of Directors.
In addition, the AGM decided that the Company shall pay the transfer tax related to the part of the annual fee of the Board of Directors paid in shares. Potential statutory social security and pension costs incurring to Board members having permanent residence outside Finland shall be borne by Orion Corporation as required by the applicable national legislation.
Board members are required to retain ownership of the Orion Corporation B shares paid as fees for a period of two years from the date of payment of the fees. However, if the person's membership of the Board of Directors of the Company were to end before the expiry of the restriction on transfer, the restriction on transfer shall expire at the end of the membership of the Board of Directors.
Remuneration principles concerning the President and CEO
The remuneration of the President and CEO is based on the remuneration policy approved by the Annual General Meeting 2024 in accordance with the Board of Directors’ proposal. The remuneration of the President and CEO is decided by the Board of Directors. The Personnel and Remuneration Committee of the Board of Directors is responsible for preparing the remuneration. The remuneration of the President and CEO consists of a monthly salary with fringe benefits, an annual performance-based bonus (STI) and long-term share-based incentive plans (LTI). The use of a share-based incentive scheme as part of the President and CEO’s remuneration is in principle in the interest of the company and its shareholders because it merges the objectives of the shareholders and the President and CEO to promote the company’s strategy and its long-term financial success. The President and CEO’s variable remuneration components (an annual performance-based bonus and long-term incentive plans) are based on predefined targets that are confirmed annually by the Board of Directors. The targets are set so that they promote implementation of the company’s strategy and its financial success over the short and long terms. The Board of Directors assesses and confirms the achievement of the objectives annually, or in case of earning periods longer than a year, at the end of each earning period.
The President and CEO Liisa Hurme’s fixed annual salary including fringe benefits is EUR 666,840.
The annual performance-based bonus (STI) of the President and CEO can be no more than twelve (12) months’ salary. Earning opportunity granted to the President and CEO under the long-term share-based incentive plan (LTI):
| Earning period | Earning opportunity |
| 2023-2025 | 25,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares |
| 2024-2026 | 25,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares |
The criteria and upper limits of the share-based incentive plans in force for key persons of the Group are determined as described in section Share-based incentive plans. In the case of the President and CEO, the principle of owning the company's shares is that her shareholding in the company corresponds to at least her fixed gross annual salary.
Notice period of the service agreement of President and CEO is 6 months, both for the company and for the President and CEO. The company has the right to immediately discharge the President and CEO from her duties. In certain situations, if the President and CEO has breached the service agreement, the company has also the right to terminate the service agreement with immediate effect. With the exception of such agreement breach situations, if the company has terminated the service agreement, the President and CEO shall be entitled to a severance pay equalling to her base salary for 18 months. The prerequisite for the severance pay is also that the company and the President and CEO enter into a separate agreement. If the President and CEO terminates the service agreement, no severance pay is paid.
Pension arrangements for the President and CEO follow local market practice and legislation: Finland has a statutory pension system (Finnish TyEL) in which the President and CEO participates. Under the Finnish TyEL pension, base salary, short-term incentives and other taxable benefits are included in the definition of earnings, while gains from share-based plans are not. According to local market practice, the President and CEO has an additional pension benefit in the form of a defined contribution pension plan of 22 percent of annual fixed base salary. The supplementary pension can commence as of the age of 63.
Remuneration principles concerning other executives
The remuneration of the other members of the Group’s Executive Management Board is decided by the Board of Directors or its Chairman. For the other executive management, the President and CEO and the Personnel and Remuneration Committee of the Board of Directors are responsible for preparing the remuneration. The remuneration system for these persons comprises a monthly salary including fringe benefits, an annual performance-based bonus (STI) and long-term share-based incentive plans (LTI). An annual performance-based bonus and long-term incentive plan are based on predefined targets that are confirmed annually by the Board of Directors. The targets are set so that they promote implementation of the company’s strategy and its financial success over the short and long terms. The Board of Directors assesses and confirms the achievement of the objectives annually, or in case of earning periods longer than a year, at the end of each earning period.
The maximum performance-based bonus of a member of the Executive Management Board cannot exceed the aforementioned maximum performance-based bonus of the President and CEO. The upper limits of the share-based incentive plans in force for key persons of the Group are determined as described in section Share-based incentive plans. The notice periods of an employment agreement of members of the Executive Management Board are 2-3 months, if a member of the Executive Management Board resigns herself/himself. If the employment agreement is terminated by the employer, the notice period is six months. In addition, the members of the Executive Management Board have the right to a severance pay of six months salary if the employer terminates the employment agreement.
Pension arrangements for the Group's Executive Management Board members follow local market practice and legislation, in addition to which the members have a defined contribution based supplementary pension. The supplementary pension can commence as of the age of 63.
Remuneration of other executives in 2023
The salaries, fees, fringe benefits and performance-based bonuses paid for 2023 to the members of the Executive Management Board, excluding the President and CEO, totalled EUR 6,227,432 (2,984,494) comprising EUR 1,903,169 (1,540,007) in salaries and fringe benefits and EUR 4,324,264 (1,444,487) in performance-based bonuses. The total number of Executive Management Board members was 9 (7) at year end 2023, including also the President and CEO.
