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 previous CEO's salary and bonus until 31 August 2020 and current CEO's salary and bonus from 1 July 2020.
2) Compensation includes all wages and salaries, including short-term incentive payments excluding employer costs (social security, pension costs, other benefits) divided by the average number of employees during the year.
Compensation2022202120202019
Remuneration of BoD members, EUR562,489503,172761,000195,000
% of net sales0.1%0.1%0.1%0.0%
Remuneration of CEO, EUR818,974638,662711,7091589,449
% of net sales0.1%0.1%0.1%0.1%
Average Purmo Group employee, EUR237,13038,83536,52636,655
Average number of personnel3,4763,3603,2873,297
Adjusted EBITDA, MEUR92.9103.985.165.4

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 12 April 2023, 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 Chairman of the Board of Directors;
  • EUR 53,000 for the Vice Chairman of the Board of Directors;
  • EUR 53,000 for each of the Chairmen 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 Chairman of the Board of Directors and the Chairmen 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.

1) Paid in 2022 for Purmo Group Ltd Board.
2) No remuneration was paid when Rettig Group Ltd ownership was 100% in Purmo Group Ltd.
3) Tomas von Rettig used his right to abstain the share portion of the annual fee.
Board memberFixed annual fee 20211Meeting fees 20211Fixed annual fee 2022Meeting fees 2022Share award 2022
Tomas von Rettig, Chair-2-55,20022,800-3
Matts Rosenberg-2-53,00018,60021,194
Carina Edblad1,75080048,00012,60019,191
Catharina Stackelberg1,750-48,00010,20019,191
Carlo Grossi1,75080048,00011,40019,191
Alexander Ehrnrooth1,8001,75048,00015,60019,191
Jyri Luomakoski1,8001,75053,00017,40021,181
Total8,8505,100353,200108,600119,139

Remuneration of the CEO of Purmo Group Plc

1) Earned based on performance in the financial year 2021, paid in Q1 2022.
2) The CEO is normally eligible to become an active member of the company’s defined contribution pension scheme. However, the CEO has reached the Life Time Pension Allowance and therefore a supplementary payment equivalent to 15% of the base salary is paid in lieu of a pension contribution. There is no specified retirement date for the CEO.
Base salaryShort-term incentive1Long-term incentive in cashLong-term incentive in sharesBenefitsPension allowance2Total
486,308267,620--2,78962,257818,974

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 2021 (paid in 2022)

The CEO’s Short-Term Incentive for 2021 was based on the achievement of the pre-defined Purmo Group targets for the financial year January – December 2021. In 2021 the amount of the annual short-term incentive (STI) plan was a maximum of 60% of the CEO’s annual base salary.

The Purmo Group targets for 2021 resulted in CEO’s Short-Term Incentive achievement of 54% of annual base salary. The financial STI payment was paid in March 2022.

1) Converted from GBP 223,832 using exchange ratio for March 2022.
Performance metrics for 2021WeightResult
Adjusted EBITDA50%maximum
Free Cash Flow10%below target level
Achievement of Operational Excellence Programme40%maximum
Pay-outEUR 267,6201

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.

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

1) Converted from GBP 223,832 using exchange ratio for March 2022.
Performance metrics for 2022WeightResult
Adjusted EBITDA60%below target level
Free Cash Flow30%below target level
ESG Targets10%between target and maximum
Pay-outEUR 17,8881

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.

PlanPlan namePerformance periodPay-out yearPerformance metricsWeightResult
Matching Share PlanLTIP 20222022-20252026-2027Total 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

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