Remuneration

Board of Directors’ Fees

According to the Finnish Companies Act, the General Meeting of Shareholders decides on the fees payable to the members of the Company’s Board of Directors. 

On 4 April 2024, the Annual General Meeting of Sitowise decided to maintain the Board of Directors’ remunerations unchanged. The remuneration of the Chair of the Board is EUR 4,750 per month and the remuneration of other members of the Board is EUR 2,250 per month. In addition, an attendance allowance of EUR 1,000 will be paid for each meeting to the Chair of the Board and the Chairs of the Committees. An attendance allowance of EUR 400 will be paid for each meeting to the other members of the Board. The Board members’ travel expenses will be compensated according to the company’s travel guidance.

Remuneration of the CEO and Members of Group Management Team

The Board of Directors decides on the remuneration and its terms of the CEO and the members of the group management team. The remuneration of the group management team and the CEO consists of a monthly salary, customary fringe benefits and incentives as in force from time to time.

The pension benefits of the Company’s CEO and the other members of the group management team are determined in accordance with law and customary practice. The Company has not taken out additional pension insurance policies for the CEO or the group management team. The retirement age of the CEO is 64 years and six months.

The period of notice of the CEO is six (6) months for both parties. Besides salary for the period of notice, the CEO is not entitled to a separate severance payment upon resigning. If the Company terminates the CEO’s employment due to a reason other than the CEO’s severe misconduct, crime or similar reason, the CEO is, in addition to salary for the six­month period of notice, entitled to compensation amounting to a maximum of six (6) months’ salary, provided that the CEO has not entered into an employment or service relationship with a third party during the said period.

Incentive Programs

Short-­term Incentive Plan

Sitowise has a short-term incentive program in place, the purpose of which is to incentivize the employees in contributing towards achieving the strategic goals of Sitowise, reward the employees for reaching the targets and to increase the commitment of the employees. The short-term incentive program is divided in two parts: (i) performance bonus system and (ii) one-off rewards. All employees in Finland are part of the short-term incentive program.

The short­-term incentive of the CEO and members of the group management team is decided on by the Company’s Board of Directors. The short­-term incentive is comprised of an annual performance bonus. The Board of Directors annually confirms the conditions and reward criteria based on which performance bonuses are paid to the group management team. Any performance bonus is based on reaching the set financial objectives, such as EBITDA or other objectives, at the level of the Group and/or the business unit concerned. In addition to these, members of the management team may have personal or team­ specific objectives.

Long-term Incentive Plans

Stock option plan 2021

In March 2021, the Board of Directors of the company decided on the establishment of a new long-term incentive scheme. The target group of the option program includes the CEO and members of Sitowise's management team, and about 300 other Sitowise's key employees specifically invited to participate in the scheme. The goal of the scheme is to encourage Sitowise's key employees towards long-term shareholding in the company by requiring investment in the shares in order to receive options. In addition, the options are used to encourage the key employees in the target group towards long-term efforts in order to increase shareholder value and to retain the key employees.

Under the option program, a maximum of 1,463,400 options can be issued, each of which will give the right to subscribe for one new or treasury share. 

The option program has 636,750 class 2021A options and 826,650 class 2021B options. 2021A options have a three-year vesting period and 2021B options have a four-year vesting period. The subscription of shares with 2021A options takes place between 1 April 2024–31 March 2025, and with 2021B options between 1 April 2024–31 March 2026. The subscription price of shares subscribed with options is EUR 5.90 for 2021A options, and EUR 4.00 for 2021B options, minus the dividends and capital returns paid annually.

2021A and B options are divided into so-called matching options and performance options. In order to receive matching options, the recipient of the options must own shares s many as matching options have been allocated to them. The shares must be held until the subscription period for shares covered by options begins. With performance options, the vesting criteria related to the start of the share's subscription period is higher than with matching options.

In addition, a member of the group management team belonging to the option program must purchase shares with 50 percent of the net income received from the options, until the value of their share ownership in the company corresponds to the total value of his annual salary. This number of shares must be owned as long as the member of the group management team continues.

The options are forfeited and transferred back to the company free of charge if the option holder resigns or the option holder's employment or business relationship is terminated before the start of the subscription period for the shares covered by the options. Under certain conditions, the board has the option to decide that the option holder may still keep part of the options.

Share-based long-term incentive plan 

The Board of Directors of Sitowise resolved in March 2023 to establish a new share-based long-term incentive program.

The program consists of annually commencing individual three-year plans. The commencement of each individual plan and its terms, the length of the performance or retention period within the plan, the performance criteria, the eligible participants thereof and the earning opportunity is subject to a separate decision of the company’s Board of Directors in each case.

The purpose of the program is to align the interests of the management and key personnel with the interests of the shareholders and thereby increase the shareholder value in the long term, and to commit the management and key personnel to achieving Sitowise's strategic goals. Additionally, the purpose is to commit Sitowise's key resources to the company by offering competitive long-term incentive plans.

Performance Share Plan 2023-2025

The Board of Directors of Sitowise resolved in March 2023 to establish the Performance Share Plan 2023-2025 ("PSP 2023-2025"). PSP 2023-2025 is the first performance-based plan from the program commencing at the beginning of 2023, and it is targeted for the Group Management Team members in the first phase. PSP 2023-2025 comprises a three-year performance period followed by a possible reward payment. The performance targets applied to PSP 2023-2025 are the relative total shareholder return (TSR) and adjusted EBITA margin (%) for the year 2025.

The possible rewards under PSP 2023-2025 will be paid after the end of the performance period and the completion of the financial statements in the spring of 2026, provided that the performance targets set by the Board of Directors are achieved. As a main rule no reward is paid to an individual participant whose employment or service relationship ends or has ended before the delivery of the reward.

The possible reward is paid, according to the Board of Directors’ choice, either in Sitowise’s shares, in cash, or in a combination of these. Cash portion of the reward is intended to cover the taxes and related statutory payments arising from the paid reward. The Group Management Team member are entitled to participate in the PSP 2023-2025 plan. 

If the performance targets set for PSP 2023-2025 are achieved in full, the total amount of rewards to be paid based on the plan corresponds to a maximum of 232,000 of the company's shares.

Restricted Share Plan 2023-2025

The Board of Directors of Sitowise resolved in March 2023 to establish the Restricted Share Plan 2023-2025 ("RSP 2023-2025"). RSP 2023-2025 is the first restricted plan from the program and it commences at the beginning of 2023. It is intended as a supplementary share-based long-term incentive plan for separately nominated key persons of Sitowise and its group companies in special situations. RSP 2023-2025 comprises a retention period of three years followed by a possible reward payment. The Company can grant fixed share rewards to individually selected key persons during the retention period.

The possible reward under RSP 2023-2025 is paid, according to the Board of Directors’ choice, either in Sitowise’s shares, in cash, or in a combination of these. Cash portion of the reward is intended to cover the taxes and related statutory payments arising from the paid reward. The possible rewards under RSP 2023-2025 will be paid after the completion of the financial statements in the spring of 2026. As a main rule no reward is paid to an individual participant whose employment or service relationship ends or has ended before the delivery of the reward.

The total amount of rewards payable under RSP 2023-2025 corresponds to a maximum of 40,000 of the Company's shares.

Performance Share Plan 2024-2026

The Board of Directors of Sitowise resolved in March 2024 to establish the Performance Share Plan 2024-2026 ("PSP 2024-2026"). PSP 2024-2026 is targeted for the Group Management Team members and to other management and experts. PSP 2024-2026 comprises a three-year performance period followed by a possible reward payment. The performance targets applied to PSP 2024-2026 are profitability (adjusted EBITA margin, %), profitability compared to peers (adjusted EBITA margin, % compared to selected peers) and sustainability services revenue.

The possible rewards under PSP 2024-2026 will be paid after the end of the performance period and the completion of the financial statements in the spring of 2027, provided that the performance targets set by the Board of Directors are achieved. As a main rule no reward is paid to an individual participant whose employment or service relationship ends or has ended before the delivery of the reward.

The possible reward is paid, according to the Board of Directors’ choice, either in Sitowise’s shares, in cash, or in a combination of these. Cash portion of the reward is intended to cover the taxes and related statutory payments arising from the paid reward. 

If the performance targets set for PSP 2024-2026 are achieved in full, the total amount of rewards to be paid based on the plan corresponds to a maximum of 695,000 of the company's shares.

Restricted Share Plan 2024-2026

The Board of Directors of Sitowise resolved in March 2024 to establish the Restricted Share Plan 2024-2026 ("RSP 2024-2026"). RSP 2024-2026 commences at the beginning of 2024. It is intended as a supplementary share-based long-term incentive plan for separately nominated key persons of Sitowise and its group companies in special situations. RSP 2024-2026 comprises a retention period of three years followed by a possible reward payment. The Company can grant fixed share rewards to individually selected key persons during the retention period.

The possible reward under RSP 2024-2026 is paid, according to the Board of Directors’ choice, either in Sitowise’s shares, in cash, or in a combination of these. Cash portion of the reward is intended to cover the taxes and related statutory payments arising from the paid reward. The possible rewards under RSP 2024-2026 will be paid after the completion of the financial statements in the spring of 2027. As a main rule no reward is paid to an individual participant whose employment or service relationship ends or has ended before the delivery of the reward.

The total amount of rewards payable under RSP 2024-2026 corresponds to a maximum of 40,000 of the Company's shares.

Other terms

According to the Company’s share ownership rules, each member of the Company's management team and the CEO is expected to accumulate and, after achieving this, hold an amount of the Company's shares equal to his/her fixed gross annual salary. A member of the management team is expected to use 50 percent of the net reward received under the plan to accumulate his/her share ownership until his/her share ownership meets the level recommended above. Accumulation of share ownership takes place either by maintaining the ownership to the rewards received in the form of shares or by acquiring shares with a cash reward received under the plan.

Remuneration of the Management Team in 2023

Management Team

On 31 December 2023, the Company's Group Management Team consisted of nine people: the CEO, four Business area EVPs, EVP CFO, EVP Information Technology, EVP Sustainability, Brand & Communications, and EVP, Human Resources. More information about the Group Management Team can be found on the website https://www.sitowise.com/investors/governance/management-team

Decision-making

Sitowise’s Board of Directors decides on the salary, incentive schemes and related targets of the members of the Group Management Team based on the preparation of the Personnel Committee. 

Remuneration structure

As a rule, the remuneration of the Group's Management Team is subject to the same remuneration principles and practices (e.g. with regard to pension and fringe benefits) as to employees. The remuneration of the Group Management Team consists of a fixed base salary, fringe benefits, a short-term performance bonus and long-term performance-based bonuses. The retirement age of the members of the Group Management Team is statutory. In addition, some of the members of the Group Management Team are covered by country-specific group pension plans.  Fringe benefits include ordinary benefits in accordance with the Company's policy, such as telephone and car benefits.

Short-term incentive

The maximum amount of the annual performance bonus (STI) for the members of the Group Management Team is 25–60 per cent of the fixed annual salary in 2023.  In Finland, Sitowise offers its personnel the opportunity to utilize the funding option in the personnel fund in the payment of incentives. In 2023, the short-term incentive targets were mainly based on the Group's or the Group's and business unit's EBITA, organic growth and strategy execution.  In 2024, the maximum amounts of the short-term incentives (STI) are the same and the targets are mainly based on the Group's or the Group's and business unit's EBITA, organic growth and strategy execution.

Long-term incentives

The members of the Company's Management Team are part of three long-term incentive plans and, in addition, one business director has his own special long-term incentive related to growth. The incentive plans are described in more detail in the section: Long-term incentive plans. The members of the Management Team must accumulate their shareholdings at the level of the net salary for the year. 50% of the long-term incentive should be used for this until the target is achieved. In 2023, there was no payment due for long-term performance-based bonuses.

Notice periods and compensation

The notice periods for the members of the Management Team vary between 3-6 months. No separate compensation for resignation has been agreed.

Remuneration paid to the Group Management Team* in 2023 (EUR)

*Does not include CEO's salary information