Investors

Remuneration Statement

Due to exceptional circumstances surrounding the Company, the Company has for the time being abandoned the conventional key performance indicators and remuneration practices. The remuneration policies and schemes will be reconsidered once the situation of the Company stabilizes.
Decision making process and main principles of remuneration
Remuneration of the Board of Directors
The Annual General Meeting of Shareholders (“AGM”) decides on the remuneration payable for Board and Committee work, as well as the basis of its determination.
The AGM of 2013 resolved to establish a Shareholders’ Nomination Panel to prepare proposals for the election and remuneration of the members of the Board of Directors to General Meetings. According to the charter of Panel, the Shareholders' Nomination Panel comprises of four members nominated by shareholders, the Chairman of the Board of Directors and one other member of the Board of Directors appointed by the Board.The Panel shall have a quorum when at least half of its members are present. Decisions of the Panel shall be unanimous. If consensus cannot be reached, members of the Panel shall present their own proposals to the General Meeting individually or jointly with other members of the Panel.
Remuneration of the Chief Executive officer and the senior management of the Company
Traditionally the Remuneration Committee of the Board has supervised, checked and developed bonus and incentive schemes. The Committee has also made recommendations to the Board of Directors on Talvivaara’s remuneration principles and the implementation of senior management incentive schemes, and on the performance evaluations of senior management. However, due to the nature and scope of the Company's operations and the small number of Board members the Board of Directors has resolved that the efficient performance of Board duties does not require the Remuneration Committee, Nomination and Governance Committee or the Sustainability Committee to be established for the time being. Therefore, as of June 2015 the only Board committee continuing its work has been the Audit Committee. The duties previously delegated to the other committees, including the Remuneration Committee, have been attended to by the entire Board of Directors to the extent applicable in the current situation of the Company.
 
The Board of Directors appoints and dismisses the Chief Executive Officer (“CEO”) of the Company and decides on the remuneration of the CEO.
 
The CEO decides on the monthly salaries of members of the Executive Committee in accordance with the instructions drawn up by the Board of Directors. The CEO makes recommendations to the Board of Directors on the long-term remuneration and yearly bonuses of members of the Executive Committee. 
 
Chief Executive Officer’s service contract
The service contract entered into with CEO Pekka Perä is valid until further notice and may be terminated by the CEO upon six months’ notice. The Company may terminate the contract upon one months’ notice. Upon termination by the Company for reason other than substantial breach of the service agreement, the CEO will be entitled to an additional compensation equal to twelve months’ salary and fringe benefits for that period. The retirement age of the CEO is 63 years.
General information on employment terms of the Executive Committee members
The remuneration paid to Executive Committee members has traditionally been a combination of a base salary, an annual bonus scheme, and long-term, stock-based incentives.Due to exceptional circumstances surrounding the Company during the last couple of years the Company has temporarily abandoned the conventional key performance indicators and remuneration practices. The remuneration policies and schemes are to be reconsidered once the situation of the Company stabilizes.
 
The base salaries of the CEO and the members of the Executive Committee are based on each executive’s position, skills and experience, and an evaluation of personal performance.
 
Should there be short term incentive schemes in place the maximum amount of a discretionary annual bonus to the Executive Committee members ranges between 25 and 50 per cent of the individual’s annual base salary. The CEO’s annual bonus can, however, be a maximum of 75 per cent of his annual base salary. Bonus criteria should base on the Company’s financial and operative results, as well as on each individual’s performance targets.The performance targets for the senior management are decided by the Board of Directors.
 
The subscription periods for 2007A, 2007B and 2007C stock options expired on 31 March 2012, 31 March 2013 and 31 March 2014 respectively. Stock options 2011A, 2011B and 2011C will not vest, as the specified implementation criteria were not fulfilled. Therefore, in 2016 there were no stock options plans in force and no options were allocated to members of the Executive Committee.
 
The share ownership plan organized through Talvivaara Management Oy was dismantled in December 2014.
 
For the members of the Executive Committee, excluding the CEO, the notice period is six months for both the Company and the employee.
 
The retirement age of the Executive Committee members is between 63 and 65 years. The other pension benefits for members of Talvivaara’s Executive Committee are determined on the basis of statutory employment pension cover.
 
Members of the Executive Committee are entitled to a daily allowance for business trips in accordance with the Finnish Tax Administration’s guidelines and the maximum amounts decided by the Ministry of Finance. Other benefits usually consist of insurance, such as liability insurance and traveler’s insurance, as well as some other benefits related to mobile communications and associated devices.
Remuneration Report
The Board of Directors
As proposed by the Shareholders' Nomination Panel, the Annual General Meeting held on 15 June 2017 approved the annual fee payable to the members of the Board of Directors for the term until the close of the Annual General Meeting in 2018 to be as follows: Chairman of the Board of Directors: EUR 75,000/year (previously EUR 84,000/year) and other Non-Executive Directors: EUR 43,000/year (previously EUR 48,000/year). In addition, the Annual General Meeting approved the proposal of the Nomination Panel, according to which no separate meeting fees are paid for the Board or the Committee work. The remuneration of the Executive Directors is included in their base salary, and it is not paid out separately. Therefore, the CEO is not entitled to separate Board fees. The traveling expenses shall be reimbursed in accordance with the Company's travel policy.
 
Salaries, bonuses and other remuneration of the Board of Directors

Board of Directors

(EUR ‘000)

2017

2016         

2015

Tapani Järvinen

Chairman of the Board

75

84

93

Graham Titcombe(1)

Deputy Chairman of the Board

-

-

37

G. Edward Haslam(2)

Board Member

-

-

34

Stuart Murray

Board Member

43

48

63

Pekka Perä(3)

Board Member, CEO

 

315

315

Maija-Liisa Friman(4)

Board Member

-

-

35

Solveig Törnroos-Huhtamäki

Board Member

48

48

52

Kari Järvinen(5)

Board Member

-

22

24

Total

 

-

517

653

 
  1. Board member until 25 June 2015

  2. Board member until 25 June 2015

  3. The Board fees of the CEO are included in his base salary in accordance with his service agreement, and therefore no Board fees are paid out separately to the CEO.

  4. Board member until 25 June 2015

  5. Board member as of 25 June 2015 until 15 June 2016.

 
Shareholding of the members of the Board of Directors on 31 December 2016
 Member

Number of the shares

Tapani Järvinen, Chairman of the Board

123,620

Stuart Murray, Deputy Chairman of the Board

-

Solveig Törnroos-Huhtamäki, Board Member

5,180

Pekka Perä, Board Member and the CEO

124,899,827

 
 
 
The Executive Committee members
Remuneration of the Executive Committee members (1)  

EUR'000

 

2016

2015

Salaries and other short term employee benefits

775

954

 

 

775 

954

 
  1. Also including the salaries and remuneration paid to the CEO

 
Shareholding of the members of the Executive Committee on 31 December 2016
 Member

Number of the shares

Pekka Perä

       124,899,827

Pekka Erkinheimo

                196,500

Pertti Pekkala

-

Lassi Lammassaari

-

 
No traditional bonus program has been in place for the members of the Executive Committee in 2016. Discretionary project bonuses amounting to a maximum of an individual’s one month’s salary in total have been paid. In 2016 there were no long-term incentive schemes in place.