Remuneration
At Loihde, remuneration is about promoting strategy fulfilment, long-term success and an increase in shareholder value. The aim of remuneration is to motivate and commit employees and management to the company’s goals, to support the acquisition of desired skills and to create a strong and responsible corporate culture.
Remuneration report 2022
Remuneration policy 2022
Remuneration of the Board of Directors
The General Meeting decides on the remuneration of the members of the Board of Directors. On 4 May 2023, the Annual General Meeting (AGM) decided the following:
- The Chairperson of the Board of Directors will be paid an annual fee of EUR 36,900 and a meeting fee of EUR 700 per meeting.
- Each member of the Board of Directors will be paid an annual fee of EUR 16,500 and a meeting fee of EUR 600 per meeting.
- The meeting fee is EUR 700 per meeting for the Chairperson of a committee and EUR 600 per meeting for the members of a committee.
The company’s AGM held on 25 June 2020 resolved to adopt a long-term share-based incentive scheme for the members of the Board of Directors. Under the incentive scheme, the members of the Board of Directors can subscribe for company shares at an amount corresponding to half of their annual fee at a maximum. The AGM may resolve on issuing commitment shares to the participants in the scheme based on their share ownership after a specified vesting period. Eligibility for the commitment shares is conditional on the participant still being a member of the company’s Board of Directors.
Remuneration of the members of the Shareholders’ Nomination Board
On 6 May 2021, the AGM decided that each member of the Nomination Board will be paid a meeting fee of EUR 400 per meeting and that the Chairperson of the Nomination Board will be paid a meeting fee of EUR 700 per meeting. In addition, the AGM decided that the Chairperson of the Board of Directors, who serves as an expert member of the Nomination Board, will be paid a meeting fee of EUR 400 per meeting.
Remuneration of the CEO
The Board of Directors decides on the remuneration and benefits of the CEO, as well as other terms of the CEO contract. The CEO contract also includes financial benefits, including compensation for dismissal and other possible compensations.
The remuneration of the CEO consists of basic salary (including benefits in kind), annual merit pay (STI) and long-term incentive schemes, like share-based incentive schemes (LTI). The fixed salary of the CEO is EUR 24,020 per month. The remuneration and benefits paid to the CEO in 2022 amounted to EUR 425,000.
The CEO is entitled to statutory pension. The retirement age of the CEO is defined in the statutory employee pension scheme.
The period of notice for the CEO contract is 6 months on either side. If Loihde terminates the contract, the CEO is under certain conditions entitled to a one-time payment corresponding to 12 months’ monthly salary.
Remuneration of the Leadership Team
The company’s personnel committee resolves on the fixed salaries of the members of the Leadership Team, apart from the Group CEO and deputy CEO. Incentive schemes and their terms are resolved on by the Board of Directors.
The remuneration of the members of the Group’s Leadership Team consists of basic salary (including benefits in kind), annual merit pay (STI) and long-term incentive schemes, like share-based incentive schemes (LTI).
The members of the Leadership Team are entitled to statutory pension benefits.
Each member of the Leadership Team has a 3 months’ period of notice. In addition, some of the members are entitled to a separate payment corresponding to 6 months’ salary, if the company terminates their contract.
Share-based incentive schemes
Share-based incentive scheme for the personnel 2018–2023 (has ended)
In autumn 2018, Loihde launched a share-based incentive scheme for the personnel with the aim to align the interests of the company’s employees and shareholders by encouraging the company’s employees to invest in the company’s shares and to commit to working for the company’s goals.
The incentive scheme included an additional share scheme offered to all employees of the Group’s core businesses as well as a performance-based bonus scheme for the senior management and selected key employees. The participants in the scheme had the opportunity to subscribe for company shares at a reduced subscription price (a 10 per cent discount on the average price of the preceding six months on Privanet) and, after a two-year vesting period, they received additional shares free of charge at a rate of one quarter of the number of shares subscribed. To receive additional shares, the employee had to hold the shares purchased until the end of the commitment period and also be employed by the Loihde Group at the end of the commitment period. The criteria for the performance-based bonus scheme were the Group’s EBITDA and total shareholder return (TSR). The bonuses under the incentive scheme were, depending on the participant’s choice, paid entirely in shares or in a combination of shares and cash, where the cash component was intended to cover the taxes and tax-like charges arising from the bonus.
There were three vesting periods under the scheme: 2018–2021, 2019–2022 and 2020–2023. The share issues included in the scheme were based on authorisations issued by the AGM in 2018, 2019, 2020 and 2021.
| Vesting period | Number of participants | Number of subscriptions | Additional shares and bonus shares | |
| Time of payment | Realised amount | |||
| 2018–2020 | 266 | 63,170 | Spring 2021 | 25,296 |
| 2019–2021 | 330 | 83,789 | Spring 2022 | 22,093 |
| 2020–2022 | 298 | 82,003 | Spring 2023 | 12,389 1) |
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1) The 2020–2022 vesting period did not include a performance-based bonus scheme.
Share-based incentive scheme for the personnel 2021–2023 (has ended)
On 27 May 2021, the Board of Directors of Loihde decided on a long-term incentive scheme for the company’s personnel (Share-based incentive scheme for personnel 2021). The target group for the incentive scheme includes all of the personnel of Loihde Group, including the management. The purpose of the scheme is to align the goals of the shareholders and personnel in order to increase the value of the company and implement the business strategy in the long term as well as to engage the personnel’s commitment to the company and offer them a competitive reward system based on the earnings and value development of the company’s shares.
The incentive scheme consists of one vesting period, 1 June 2021–31 December 2023. After the vesting period, which will last approximately two and a half years, participants who have subscribed for shares will receive one additional share free of charge for each three shares they have subscribed for and still hold at the time of the payment of the reward. In order to be eligible to receive the additional shares, the participant must still be employed by the Group at the time of the payment of the reward. Rewards based on the earning of additional shares will be paid to the eligible participants after the vesting period, tentatively in early 2024. The rewards under the incentive scheme will be primarily paid in a combination of company shares and cash. The cash component is intended to cover the taxes and tax-like charges arising from the reward. The Board of Directors also has the right to decide that the reward be paid fully in shares or fully in cash.
During the subscription period, 18 June 2021–24 June 2021, the participants in the scheme have had the opportunity to subscribe for company shares at a reduced subscription price (a 10 per cent discount on the average price of the share on Privanet during the period 1 November 2020–30 April 2021). The share issue was based on the authorisation by the AGM held on 9 May 2019, and the new shares were entered in the Trade Register on 19 July 2021.
| Vesting period | Number of participants | Number of subscriptions | Additional shares | |
| Time of payment | Maximum amount | |||
| 2021–2023 | 327 | 82,842 | Spring 2024 | 27,614 |
Share-based incentive scheme for the personnel 2022–2024
On 6 June 2022, the Board of Directors of Loihde decided on a long-term incentive scheme for the company’s personnel (Employee Matching Share Plan 2022). The target group for the incentive scheme includes all of the personnel of Loihde Group, including the management. The purpose of the scheme is to align the goals of the shareholders and personnel in order to increase the value of the company and implement the business strategy in the long term as well as to engage the personnel’s commitment to the company and offer them a competitive reward system based on the earnings and value development of the company’s shares.
The incentive scheme consists of one vesting period, 6 July 2022–31 December 2024. After the vesting period participants who have subscribed for shares will receive one matching share free of charge for each three shares they have subscribed for and still hold at the time of the payment of the reward. In order to be eligible to receive the matching shares, the participant must still be employed by the Group at the time of the payment of the reward. Rewards based on the earning of matching shares will be paid to the eligible participants after the vesting period, tentatively in early 2025. The rewards under the incentive scheme will be primarily paid in a combination of company shares and cash. The cash component is intended to cover the taxes and tax-like charges arising from the reward. The Board of Directors also has the right to decide that the reward be paid fully in shares or fully in cash.
During the subscription period, 14 June 2022–22 June 2022, the participants in the scheme have had the opportunity to subscribe for company shares at a reduced subscription price (a 10 per cent discount on the average price of the share during the period 1–31 May 2022). A total of 144 Loihde employees participated in the employee share issue and subscribed for a total of 50,208 shares. The new shares were registered in the Trade Register on 18 July 2022. The share issue was based on the authorisation by the AGM held on 5 May 2022.
Employee Share Savings Plan (ESSP)
On 25 May 2025, the Board of Directors of Loihde Plc decided to establish an Employee Share Savings Plan (ESSP) for the employees of Loihde Plc and its subsidiaries. The aim of the ESSP is to encourage employees to acquire and own Loihde shares, and it is also intended to align the interests of the shareholders and the employees and to increase the employees’ motivation and long-term commitment to the company.
The ESSP consists of annually commencing plan periods, each one comprising of an approximately one-year savings period and a holding period following the savings period. The ESSP is offered to all Loihde employees. The employees will have an opportunity to save a portion of their salaries and invest those savings in Loihde’s shares. The savings will be used for acquiring Loihde’s shares quarterly. The Board decides if the savings shares are purchased from the market or if the savings shares are delivered to the participants by a directed share issue decided separately by the Board.
As a reward for the commitment, Loihde grants the participating employees a gross award of one (1) matching share for every two (2) savings shares acquired with their savings. Additionally, the participants have the opportunity to earn half (0.5) or one (1) performance-based matching share (gross) for every two (2) savings shares acquired with their savings based on the achievement of the performance criterion. The performance criterion is the group’s EBITDA margin for the financial year 2025. Continuity of employment and holding of acquired savings shares for the duration of the holding period are the prerequisites for receiving the award.
The potential award will be settled in shares, or partly in shares and partly in cash, after the end of the holding period. The cash portion is intended to cover taxes and tax-related costs. Matching shares will be freely transferable after their registration on the participant’s book-entry account.
Participation in the ESSP is voluntary and the employees will be invited to participate in one plan period at a time. The first savings period will commence on 1 July 2023 and end on 31 May 2024. The holding period of the first plan period begins at the first acquisition of savings shares and ends on 31 May 2026. The maximum number of matching shares (gross number before taxes) for the first plan period is approximately 62,500, calculated at the current share price. The final number of matching shares depends on the employees’ participation and savings rate in the plan, the fulfilment of the prerequisites for receiving matching shares and the achievement of the performance criterion.
Long-term incentive scheme for the management and key personnel 2021 (LTI)
On 3 March 2021, the company’s Board of Directors decided on a performance-based long-term incentive scheme aimed at the Group Leadership Team and selected key employees. The scheme consists of three-year vesting periods starting annually, each of which requires separate approval by the Board of Directors. The criteria for the payment of the reward consist of revenue and EBITDA targets set by the Board of Directors for the vesting period. The potential share rewards to be paid based on the first vesting period, 2021–2023, will be paid in spring 2024 and the total amount will be at most 48,000 shares. The potential share rewards to be paid based on the second vesting period, 2022–2024, will be paid in spring 2025 and the total amount will be at most 63,864 shares. The potential share rewards to be paid based on the third vesting period, 2023–2025, will be paid in spring 2026 and the total amount will be at most 102,000 shares. The condition for the payment of the reward is that the key employee’s employment or service relationship has not been terminated by the key employee or the company before the end of the vesting period.
Long-term incentive scheme for the management and key personnel 2023 (LTI)
On 28 November 2023, the company’s Board of Directors decided on a performance-based long-term incentive scheme aimed at the Group Leadership Team and selected key employees. The scheme consists one three-year vesting period (2024-2026). A maximum of 29 people are covered by the incentive scheme. The criteria for the payment of the bonus are the EBITDA target set by the Board of Directors for the vesting period and the development of total shareholder return (TSR). The maximum number of shares to possibly be paid as a bonus is 107,600 shares in Loihde Plc. A prerequisite of the bonus under the incentive scheme is that the key employee’s employment relationship has not been terminated or ended by the employee in question or by the company before the end of the vesting period.
Share-based incentive scheme for the CEO (has ended)
In November 2020, the company also carried out a directed paid share issue of 6,000 shares to the company’s new CEO Samu Konttinen as part of the CEO’s share-based incentive scheme. The subscription price was based on the average price of the company’s share on Privanet for the period 24 May–23 November 2020, on which a discount of 10 per cent was applied. Under the terms of the incentive scheme, Konttinen has received 3,000 shares on 13 December 2021 and 1,455 shares on 13 December 2022, which correspond to the gross earning of 3,000 shares, from which a cash component covering taxes and other tax-like charges have been deducted.
Share-based incentive scheme for the CEO
On 26 February 2024, The Board of Directors of Loihde Plc has decided to launch a new share-based long-term incentive scheme for the CEO of the company. The purpose of the share-based long-term incentive scheme is to align the goals of shareholders and the CEO to increase Loihde’s value in the long run, to implement the business strategy and to commit the CEO.
The share-based incentive scheme for the CEO will have one three-year vesting period from 2024 to 2026. The maximum number of shares to possibly be paid as a bonus is 12,000 shares (0.2% of all shares and votes), and they will be paid during 2025 and 2026. Key terms and conditions of the scheme include that the CEO’s employment relationship is valid at the time the bonus will be paid. In addition, the number of the bonus shares depends on the amount of shares the CEO will purchase from the market.
Share-based incentive scheme for the Board of Directors
The AGM held on 25 June 2020 resolved to adopt a long-term share-based incentive scheme for the members of the Board of Directors and resolved on a related share issue. Under the incentive scheme, the members of the Board of Directors can subscribe for company shares at an amount corresponding to half of their annual fee at a maximum. In the incentive scheme, the subscription price corresponds to the average price of the company share for the six-month period preceding the resolution on the share issue, with a 10 per cent discount applied. The AGM may resolve on issuing commitment shares to the participants in the scheme based on their share ownership after a specified vesting period. Eligibility for the commitment shares is conditional on the participant still being a member of the company’s Board of Directors. In 2020, two members of the Board of Directors participated in the incentive scheme and subscribed for 960 shares in total. In 2021, five members subscribed for 2,740 shares in total. In 2022, five members subscribed for 3,667 shares in total and in 2023, six members subscribed for 3,843 shares in total.
