Investors

Remuneration

Remuneration Principles applied in Purmo Group in accordance with Remuneration Policy aim to:

• Divide remuneration in elements such as fixed base salary, variable performance based incentives and other payments such as pension, and fringe benefits
• Define clear key performance indicators linked to strategy execution
• Attract and retain top talent
• Enhance employee engagement through clarity and understanding

The Company’s Remuneration Committee reviews annually the Remuneration Policy to ensure alignment with market practices, the Company strategy, and the long-term aspiration of the Company.

The table below presents the development of the Company’s Board member’s and CEO’s remuneration compared to the development of the average remuneration of Purmo Group employees and Purmo Group’s financial development. Comparable data is only available
for the previous four years.

1) Includes the previous CEO's salary and bonus until 31 August 2020 and the current CEO's salary and bonus from 1 July 2020.
2) Average Purmo Group Employee remuneration includes all wages and salaries, including short-term incentive payments divided by the average number of employees during the year. Remuneration excludes social security and other employer costs.
3) The remuneration for Board of Directors in 2022 has been revised.
Compensation	2023	2022	2021	2020	2019
Remuneration of BoD members, EUR	523,200	461,800³	503,172	761,000	195,000
% of net sales	0.1%	0.1%	0.1%	0.1%	0.0%
Remuneration of CEO, EUR	718,108	818,974	638,662	711,709¹	589,449
% of net sales	0.1%	0.1%	0.1%	0.1%	0.1%
Average Purmo Group employee, EUR²	38,405	37,130	38,835	36,526	36,655
Average number of personnel	3,228	3,476	3,360	3,287	3,297
Net sales, MEUR	743.2	904.1	843.6	671.2	696.8
Adjusted EBITDA, MEUR	92.3	92.9	103.9	85.1	65.4

Remuneration of Board of Directors

The Shareholders Nomination Board proposes to the Annual General Meeting the remuneration paid to the Board of Directors. In the Annual General Meeting on 9 April 2024, it was resolved that the fees are kept unchanged, and the members of the Board of Directors should be paid annual fees as follows:

EUR 92,000 for the Chair of the Board of Directors;
EUR 53,000 for the Vice Chair of the Board of Directors;
EUR 53,000 for each of the Chairs of the Committees of the Board of Directors; and
EUR 48,000 for each ordinary member of Board of Directors.

Approximately 40% of the annual fee will be paid in Purmo Group’s Class C shares.

The annual fee shall be paid to the members of the Board of Directors within two weeks after the publication of the first quarter interim report or as soon as legally possible thereafter. The Company will pay the costs and transfer tax related to the acquisition of shares. If a part of the fee cannot be paid in shares as required by law or other regulations or for reasons related to a member of the Board of Directors, the fee may be paid full in cash. If the term of office of a member of the Board of Directors would be shorter, the fee would be paid in proportion to the length of their term of office.

In addition to the annual fee, the members of Board of Directors should be paid a meeting fee for each meeting of the Board of Directors and its committees as follows:

EUR 800 per meeting held in the country of residence of member of the Board of Directors;
EUR 1,400 per meeting held outside the country of residence of the member of the Board of Directors but on the same continent as the country of residence of the member of the Board of Directors;
EUR 2,600 per meeting held on another continent than the country of residence of the member of the Board of Directors; or
EUR 800 per meeting held by telephone or through virtual communication channels.

In addition, an additional meeting fee of EUR 800 be paid to the Chair of the Board of Directors and the Chairs of the Committees of the Board of Directors for each meeting of the Board of Directors and its Committees.

In addition, compensation for reasonable travel, accommodation and other expenses related to the Board of Directors and committee work are to be reimbursed according to the applicable policies of the Company.

Each member of the Board of Directors shall have the right to abstain from receiving remuneration.

Board member	Fixed annual fee 2023	Meeting fees 2023	Total remuneration 2023	Remuneration in shares 2023	Total remuneration 2022
Tomas von Rettig, Chair	92,000	26,200	118,200	-	78,000
Matts Rosenberg	53,000	21,000	74,000	2,436	71,600
Carina Edblad	48,000	13,200	61,200	2,206	60,600
Catharina Stackelberg	48,000	13,400	61,400	2,206	58,200
Carlo Grossi	48,000	14,800	62,800	2,206	59,400
Alexander Ehrnrooth	48,000	20,200	68,200	2,206	63,600
Jyri Luomakoski	53,000	24,400	77,400	2,436	70,400
Total	390,000	133,200	523,200	13,696	461,800

The remuneration paid to the CEO for 2023, EUR

1) Earned based on performance in the financial year 2023, paid in Q1 2024.
2) The CEO is typically qualified to join the company's defined contribution pension plan. However, since the CEO has already reached the Life Time Pension Allowance limit, they are instead given a supplementary pension contribution. This contribution is equal in amount to what the regular pension contribution would have been. There is no predetermined retirement date set for the CEO.
Base salary	Short-term incentive¹	Long-term incentive in cash	Long-term incentive in shares	Benefits	Pension allowance²	Total
495,552	158,577	-	-	2,979	61,000	718,108

In accordance with the remuneration policy, CEO’s remuneration is built by elements, such as base salary, short-term and long-term incentive and other benefits so that the remuneration is attractive and linked to the strategy execution.

CEO’s Short-Term Incentive Programme

The payment of short-term incentive is based on the Company targets set forth by the Board of Directors and based on performance in the financial year.

Short-Term Incentive performance period 2022 (paid in 2023)

The CEO’s Short-Term Incentive for 2022 was based on the achievement of the pre-defined company targets for the financial year January–December 2022. In 2022 the amount of the annual short-term incentive (STI) plan was a maximum of 60% of the CEO’s annual base salary.

Purmo Group’s targets for 2022 resulted in a CEO’s STI achievement of 3.75% of annual base salary. The financial STI payment was paid in March 2023.

1) Converted from GBP using average exchange ratio in 2022.
Performance metrics for 2022	Weight	Result (0-100%)
Adjusted EBITDA	60%	between 0-50%
Free Cash Flow	30%	between 0-50%
ESG Targets	10%	between 50-100%
Pay-out		EUR 17,888¹

Short-Term Incentive performance period 2023 (paid in 2024)

The CEO’s Short-Term Incentive for 2023 was based on the achievement of the pre-defined company targets for the financial year January–December 2023. In 2023, the amount of the annual short-term incentive (STI) plan was a maximum of 80% of the CEO’s annual base salary.

Purmo Group’s targets for 2023 resulted in a CEO’s STI achievement of 32.0% of the annual base salary. The financial STI payment will be paid in March 2024

1) Converted from GBP using average exchange ratio in 2023.
Performance metrics for 2022	Weight	Result
Adjusted EBITDA	40%	between 0-50%
Accelerate PG Programme	40%	between 50-100%
Net Working Capital	10%	between 0-50%
ESG Targets	10%	between 0-50%
Pay-out		EUR 158,577¹

CEO’s Long-Term Incentive Programme

The CEO participated in long-term Performance-Based Matching Share Plan that was determined by the Board of Directors and launched in 6 July 2022. CEO invested a total of 32,258 of existing Purmo Group’s class C shares in in the programme. CEO is entitled to a similar pay-out with all other participants in the long-term incentive plan.

The performance criterion of the plan is Total Shareholder Return (TSR) of the Purmo Group class C share as set by the Board of Directors. Achievement of set TSR targets will determine the proportion of the maximum reward payable to participants. The minimum threshold for reward pay-out is a share price of EUR 16.00 per share. The maximum reward is earned at a share price of EUR 24.00 per share. Accumulated dividends and return of capital from reserves distributed during 2022-2027 are added to the share market price when calculating the TSR. The new Performance-Based Matching Share Plan comprises one performance period from the financial year 2022 to 2025. The performance period is followed by a pay-out period covering the financial years 2026 and 2027. The reward will be paid in both Purmo Group class C shares and in cash to cover taxes and statutory social security contributions arising from receipt of the reward.

Plan	Plan name	Performance period	Pay-out year	Performance metrics	Weight	Result
Matching Share Plan	LTIP 2022	2022-2025	2026-2027	Total Shareholder Return (TSR)	100%	-

Share-based incentive plan for management and key employees

On 20 July, 2022 the Board of Directors of Purmo Group decided to launch a new share-based incentive plan for key employees of the company. The incentive plan is for a maximum of approximately 50 key employees including the CEO and other members of the Management Team. The purpose of the Performance-Based Matching Share Plan 2022–2027 is to align targets of shareholders and key employees in order to increase the long-term value of the company, retain key employees and offer them a competitive incentive plan that is based on company share ownership and successful performance. Read more

Remuneration report 2023
Remuneration policy