The Remuneration Policy defines the principles for the remuneration of the President and CEO and the Deputy CEO.
The Human Resources Committee reviews the President and CEO’s performance and prepares the proposal for the President and CEO’s remuneration. External market data and advisers are used to support the proposal preparation and the performance review. Based on the Human Resources Committee's evaluation, market benchmarking and other relevant facts, the Board determines the total remuneration elements of the President and CEO.
The compensation package of the President and CEO, and the Deputy CEO, includes a fixed base salary with fringe benefits, performance-based annual variable pay and a long-term, performance-based share plan.
In addition the Finnish statutory pension, the President and CEO and the Deputy CEO have a supplementary contribution pension benefit provided by the Company. The pension scheme for the President and CEO sets the defined contribution at 20 percent of the annual base salary, including fringe benefits and excluding performance-based compensation (annual or long-term incentives). The contribution level for the Deputy CEO is set at 1 percent of the annual base salary. The retirement age in this supplementary pension plan is 63 years.
Remuneration elements and terms of employment of the President and CEO and Deputy CEO
President and CEO Anders Svensson |
Deputy CEO Teo Ottola | |
---|---|---|
Base salary |
Fixed salary with fringe benefits |
Fixed salary with fringe benefits Monthly salary: EUR 27,031.10 |
Short-term incentives | Based on financial performance Max. 100% of annual base salary |
Based on financial performance Max. 100% of annual base salary |
Long-term incentives |
Performance Share Plan 2023 |
Performance Share Plans 2021, 2022 and 2023 |
Proportion of fixed and variable pay (as % of total target remuneration) | 37.6% base salary 18.8% STI* 43.6% LTI* * target opportunity, long-term incentive includes only Performance Share Plan |
37.8% base salary 18.9% STI* 43.2% LTI* * target opportunity |
Pensions | Finnish Statutory pension Defined contribution plan at 20% of annual salary |
Finnish Statutory pension Defined contribution plan at 1% of salary |
Shareholding requirements | Must hold min. 100% of any net shares given based on reward plans until the value of shareholding equals annual salary, thereafter 50 percent of the net shares until the President and CEO holds shares at least worth 150 percent of the annual salary, and membership in the Konecranes Leadership Team continues. |
Must hold min. 50% of any net shares given based on reward plans until the value of shareholding equals annual salary, and the membership in the Konecranes Leadership Team continues. |
Period of notice | 6 months’ notice by the President and CEO and by the company | 6 months’ notice by the Deputy CEO or 9 months’ notice by the company |
Severance pay | Equals to 12 months’ salary and fringe benefits in case of termination prior to the age of 63, in addition to the salary for the notice period | Equals to 9 months’ salary and fringe benefits, in addition to the salary for the notice period |
Retirement age | 63 years | 65 years 6 months |
Remuneration paid to the President and CEO and the Deputy CEO in 2023
In 2023, the fixed salary including salaries and fringe benefits paid to the President and CEO amounted to EUR 814,208 and for the Deputy CEO to EUR 295,910.
The short-term incentive payments for 2022 were paid in 2023 and amounted to EUR 89,114 for the Deputy CEO Teo Ottola. The short-term incentive plan 2022 for the Deputy CEO was based on the achievement of the following measures: 70 percent weight on Group comparable EBITA margin and 30 percent weight on Group orders received. The actual outcome was 30 percent out of the maximum 100 percent. There were no short-term incentive payments in 2023 for the President & CEO Anders Svensson as he joined the company on October 19, 2022.
The short-term incentive plan for 2023 for the President & CEO and Deputy CEO was based on the achievement of the following measures: 65 percent weight on Group comparable EBITA margin and 25 percent weight on Group sales growth % and 10 percent weight on ESG targets. The short-term incentive payments for 2023 due to be paid in 2024 amount to EUR 778,480 for the President & CEO and EUR 312,654 for the Deputy CEO, and the outcome was 97.3 percent out of the maximum 100 percent.
Rewards based on the long-term Performance Share Plan (PSP) 2020 were paid in 2023. The plan had a three-year-long performance period with three separate one-year-long measurement periods. There were separate targets for each measurement period, and the criterion for all measurement periods (2020, 2021 and 2022) was comparable EPS. Items affecting comparability to the EPS included defined restructuring costs, mergers and acquisitions related transaction costs and other unusual items. The outcome for the PSP 2020 was 69 percent. The previous President & CEO did not participate in the PSP 2020, but the Deputy CEO was delivered 11,061 gross shares of which 50 percent was paid in shares and 50 percent in cash.
The Performance Share Plans 2021 and 2022 consist of a three-year-long performance period including three one-year-long measurement periods with separate targets decided by the Board of Directors. The criterion for the measurement period 2021 for PSP 2021 was comparable earnings per share (EPS) and the outcome was 100 percent. The criterion for the measurement period 2022 for PSP 2021 and PSP 2022 was comparable earnings per share (EPS) and the outcome for the measurement period 2022 was 11 percent. The criterion for the measurement period 2023 for PSP 2021 and PSP 2022 was comparable earnings per share (EPS) and the outcome for the measurement period 2023 was 100 percent.
The three-year-long performance period for PSP 2021 ended in December 2023 and the total outcome from the three one-year-long measurement periods was 70 percent. The PSP 2021 rewards are due to be paid in 2024, and the Deputy CEO will be delivered 11,261 gross shares, of which 50 percent will be paid in shares and 50 percent in cash. The President & CEO did not participate in the PSP 2021 due to joining the company in 2022.
The President & CEO Anders Svensson joined the Company in October 2022. For retention purposes, he was allocated 17,170 Restricted Share Unit 2017 (RSU) gross shares, of which 40 percent vested on December 31, 2023 with a share delivery of 6,868 gross shares in January 2024. The Board of Directors decided to settle the full amount in shares and the taxes were paid by the President and CEO. The remaining 60 percent of the allocation, which is 10,302 gross shares, will be vesting on December 31, 2024.
In 2023, the total remuneration paid to the President and CEO amounted to EUR 814,208, and for the Deputy CEO to EUR 680,557.
Summary of the remuneration of the President and CEO and Deputy CEO in 2023
in EUR | President & CEO Anders Svensson |
Deputy CEO Teo Ottola |
---|---|---|
Fixed Salary (salaries and fringe benefits) | 814,208 | 295,910 |
Short-term incentives paid (based on previous year performance) | - | 46,430 |
One-time bonus | - | - |
Value of long-term incentive rewards paid | - | 338,218 |
Variable Pay | - | 384,648 |
Total Remuneration paid | 814,208 | 680,557 |
Proportion of fixed and variable pay (as % of total target remuneration) | 100% / 0% | 43% / 57% |
Estimated short-term incentives due payment (based on 2023 performance) | 778,480 | 312,654 |
Gross shares delivered | - | 11,061 |
Performance share rights allocated (# of share rights) | 55,000 | 60,000 |
Restricted share rights allocated (# of share rights) | 17,170 | - |
Shareholding in Konecranes Plc (# of shares) | 324 | 51,075 |
Expense of statutory/voluntary pension plans | 296,565 | 60,818 |