Corporate Governance

The Remuneration Policy is prepared by the Board’s Compensation Committee and approved by the Board for presentation to the General Meeting. Compliance with, and the performance and outcomes of, the remuneration model are monitored by the Compensation Committee appointed by the Board of Directors, and by the Board of Directors. The company’s internal audit conducts an annual audit of the remuneration.

The remuneration of members of Evli Group’s bodies is always decided by the body that has appointed them.

Evli’s AGM decides on the compensations payable to the members of the Board of Directors. The company’s major shareholders are responsible for preparing the remuneration proposal. The principles and elements of the remuneration of the CEO and any Deputy CEO are approved by Evli’s Board of Directors in accordance with this Remuneration Policy. The Compensation Committee, appointed by the Board of Directors, prepares proposals on matters related to remuneration for decision-making by the Board. All changes to the CEO’s salary and remuneration or executive contract are made by the Board of Directors based on a proposal by the Compensation Committee in accordance with the Remuneration Policy.

In all remuneration, Evli complies with applicable financial regulations and Evli Group’s overall remuneration model for all employees.

The Group’s remuneration model consists of the following elements:

• A competitive fixed basic salary constitutes a solid foundation for maintaining and constantly developing basic functions.
• A short-term variable remuneration, in accordance with the annual remuneration plan approved by the Board of Directors, is used to promote both Evli’s short-term growth objectives and the attainment of its strategic targets.
• Long-term variable remuneration is used to support the company’s strategic development and to commit key employees to the company’s business operations.

The objective of the Evli Group’s reward system is to support the implementation of the company’s strategy as well as promote its competitiveness and long-term financial success. A further aim is to contribute to a positive trend in Evli’s shareholder value, committing the company employees to the company’s objectives in the long run.

The remuneration model is made up of the following elements:

1. Fixed salaries and bonuses
   A competitive fixed basic salary constitutes a solid foundation for maintaining and constantly developing basic functions.
2. Varying remuneration
   To promote both Evli’s business growth objectives and the attainment of its strategic goals, the company has an annually adopted reward system based on annually varying salary elements. The remuneration model is tied to the company’s financial success, compliance with operating principles and guidelines, sustainability risks and solvency.
   a) Short-term remuneration: The purpose of the short-term remuneration is to support the company’s strategic development.
   b) Long-term incentive plans: The long-term incentive plans, decided by the Board of Directors, are in place to support the company’s strategic development and to commit the key persons to Evli’s operations.

Decision-Making Relating to Remuneration

The Compensation Committee, which is made up of members nominated from the Board of Directors, prepares a reward system in accordance with the targets set by the Board of Directors in which the criteria for determining the variable salary elements are determined. The Compensation Committee consists of at least two Board members and is chaired by an independent Board member. The Board reviews and adopts the reward system annually. The Board of Directors also decide on the long-term incentive systems and the issuing of options rights or share-based incentive systems.

The reward system must always comply with the valid legislation and guidelines issued by the authorities. The Compensation Committee monitors the functioning and results of the reward system. The Compensation Committee also monitors compliance with the reward system and the rewarding of the persons that are responsible for the company’s risk management and control functions. Evli’s internal audit function performs an annual audit of the reward system.

Evli Plc’s General Meeting will decide on the compensations payable to the Board members. The major shareholders of the company are responsible for preparing the proposal concerning the remuneration. Evli’s Board of Directors adopt the principles and elements of the remunerations for the CEO and Executive Group on an annual basis. To prepare the Board resolutions, the Board‘s Compensation Committee will draft the proposals related to remuneration. The CEO and Executive Group members are covered by the shared Evli Group reward system. All changes in the CEO’s salary and remuneration are subject to the Board’s approval.

Remuneration Principles in Evli Plc

Fixed salaries and bonuses

Evli’s fixed salaries play a significant role in remuneration. Evli seeks to offer a competitive level of salaries to keep its competent employees with the company. Fixed salaries rise either on the basis of increases based on the collective agreement or on the basis of a personal pay rise awarded by the employee’s supervisor. There are no significant separate fringe benefits in the Group.

Varying remuneration

The Group’s reward system covers its entire personnel. The objective of the reward system is to support the implementation of the company’s strategy and promote its competitiveness and long-term financial success. Remuneration payable in line with the reward system is linked to the financial success of the entire Group, compliance with the company’s operating principles and guidelines, and to ensuring solvency. When assessing individual and group performance, the model is built in a way that the sustainability risks are also taken into account and that does not encourage unhealthy risk-taking.

Under all circumstances, remuneration in line with the reward system is always subject to a Board resolution. Through a Board resolution, the company can decide, if appropriate, not to pay the variable remuneration element, either in part or in total. Moreover, the company always has the right to reclaim a paid variable remuneration element, should it later discover that the actions taken by the individual remunerated have jeopardized the financial position of the company, the individual has violated the regulations affecting the company or the company’s own operative principles and procedures, or has contributed to such an action through negligence.

The Evli Group’s reward system contains restrictions to ensure that the variable element of the remuneration is not paid out if the Group’s result does not show a favorable trend. The premise for bonus payments is a result that is sufficiently strong so that the company’s solvency is not jeopardized through variable remunerations. Under no circumstances can remuneration and bonuses exceed 25 percent of the company’s result before the profit distribution with employees. The reward system also contains restrictions to ensure that the variable element in the total remuneration does not grow excessively in relation to the fixed salary which would encourage risk-taking beyond the risk bearing capacity. In case of individuals, the share of the variable element must not exceed 100 percent of the total fixed salary element, unless the General Meeting decides otherwise. Nevertheless, the share of the variable element cannot exceed 200 percent of the total fixed salary of the individual in question.

To avoid conflicts of interest, the remuneration of persons in control functions does not depend on the financial success of the Group or any of its business units. The remuneration of those working in control functions will be tied to their individual performance and attainment of objectives. Allocating variable commissions to individuals considers both the level of work required and the individual’s performance. Both qualitative and quantitative indicators are used for assessing performance. The indicators are derived from Evli’s strategy and are taking into account also responsibility factors. The task of supervisors is to evaluate each individual’s performance at least once a year. Based on these, a performance-based reward per employee is calculated, which can be cut down if the model limits are compromised. The indicators and models are designed to account for long-term performance and compatibility of eventual bonuses with the company’s operations and related risks.

Under certain circumstances, the company will be obliged to postpone the payment of the variable remuneration element. In this case, the postponement will be three (3) years from the end of the respective earning period. The amount of the remuneration payable after the postponement depends on the company’s financial performance during the period of postponement, and it can also be zero. The company requires that employees do not take any personal action to protect themselves against risks related to the amount of their future variable remunerations or risks at the time of payment.

In addition to the above remuneration methods, the company may create separate long-term incentive plans that are part of variable remuneration. The aim with the share-based incentive plans is to support Evli’s strategy and align the objectives of the shareholders and the selected key employees to increase the value of Evli in the long-term. Moreover, the aim is to retain the selected key employees at the company and to offer them a competitive reward plan. 

Evli has five share-based incentive programs in place: 2021, 2021–2025, 2022, 1/2023–6/2026, and 9/2023–12/2026. The rewards based on the incentive program are given in Evli shares. The purpose of the share-based incentive plans is to support the implementation of Evli’s strategy and to align the interests of the company’s shareholders and selected key employees in order to increase the company’s value in the long term. The purpose is also to commit key employees to the company and to offer them a competitive incentive plan.

For the 2021 program, the shares will be issued free of charge four years after the launch of the program, provided that the individuals in question are still employed by the company. Under the 2021–2025 and 2022-2023 programs, members have the opportunity to earn shares for successful performance, in accordance with the terms of the program. Under the 1/2023-6/2026 and 9/2023-12/2026 share plans, plan members may earn shares based on performance. Under the 1/2023-6/2026 plan, awards are based on the annualized fund turnover from new investments in Sweden. The vesting criteria for the 9/2023-12/2026 plan are linked to the company’s operating profit (EBIT). The company’s Board of Directors decides upon the distribution of shares.

In general, the remuneration of the Board of Directors is decided by the General Meeting based on a proposal by the major shareholders. The decision on the remuneration of the members of the Board of Directors shall be based on the Remuneration Policy presented to the AGM and which is in force.

The remuneration of the members of the Board of Directors consists of a fixed monthly compensation and possible compensation for meeting attendance. The Chairman of the Board of Directors and the chairmen of the committees appointed by the Board of Directors may be paid an increased compensation.

The remuneration of the members of the Board of Directors consists of a fixed monthly compensation and possible compensation for meeting attendance. The Chairman of the Board of Directors and the chairmen of the committees appointed by the Board of Directors may be paid an increased compensation.

In situations in which a member of the Board of Directors participates in project-based activities to develop the company’s operations outside the work carried out by the Board of Directors, a separate compensation may be paid for such work at the Board’s discretion. In addition to the monthly compensation and possible compensation for meetings, the members of the Board of Directors are compensated for their travel expenses. In principle, the Board of Directors’ compensation and allowance are paid in cash.

Evli’s General Meeting decides on the compensations payable to the Board members. The Annual General Meeting of March 9, 2022 made the following resolution on the compensation for attendance at meetings payable to the Chairman of the Board and other members:

• Chairman of the Board EUR 7,500 per month
• Chairmen of the committees EUR 6,000 per month
• Members EUR 5,000 per month

The Board has established and appointed an Audit and Risk Committee and a Compensation Committee to prepare matters to be handled by the Board. In 2022, the total compensation paid to the Evli Group Board members amounted to EUR 399,000. This sum is made up of meeting participation fees related to the work carried out in the Board and its committees. In 2022, the Board members did not receive any shares or share based rights as compensation for their work, nor were they granted any other benefits.

Compensation paid to the Members of the Board 2022

The Board of Evli Group adopts the principles and elements of the remunerations for the CEO on an annual basis. The remuneration of the CEO follows Evli’s Remuneration Policy in force. All changes in the CEO’s salary and remuneration are subject to the Board’s approval.

The CEO’s remuneration is comprised, in principle, of a fixed salary and short-term and long-term variable remuneration. In addition, the CEO may be granted a separate, reasonable retirement plan or other benefits to ensure that a competent CEO is committed to the company’s development.

The amount of the CEO’s variable remuneration and the relative proportion to his fixed salary are within the limits set by financial regulations. The CEO’s short-term and long-term variable remuneration may not exceed 200 percent of the annual fixed salary.

The variable remuneration is linked to the company’s financial success and the achievement of its strategic goals. If deemed pertinent, the company may, by a decision of the Board of Directors, decide not to pay the variable bonus, in whole or in part. The Board decides on the long-term variable renumeration for the CEO on a case-by-case basis.

In certain circumstances, the company is obliged to defer payment of the variable bonus. In such case, the company will defer payment of the variable bonus in accordance with the regulations set by the financial market. The amount of the bonus payable after the deferral depends on the financial performance of the company during the deferral period and may even be zero. The company expects that the CEO will not hedge with his/ her personal actions against any risk related to the amount or timing of future variable remuneration. In certain circumstances, the company may also reclaim a variable bonus already paid.

The company shall also always have the right to reclaim a variable bonus already paid if, after such payment, it becomes apparent that the person receiving the bonus has endangered the financial position of the company, violated the company’s operating principles and practices, or contributed to such conduct through neglect. The CEO has a notice period consistent with current market practices. Similarly, in cases where the CEO’s contract is terminated by the company, he/she is entitled to severance pay in accordance with prevailing market practices.
Evli’s CEO in 2022 was Maunu Lehtimäki.

The CEO has no significant separate fringe benefits and is covered by the shared Evli Group reward system.

The CEO is covered by a six-month period of notice binding to both parties. The CEO is entitled to receive a severance pay corresponding to 12-months’ salary if the CEO’s contract is terminated by the company. The CEO’s retirement age is 63 years.

The Board of Evli Group adopts the principles and elements of the remunerations for the Executive Group on an annual basis. In addition to the CEO, there were six members in the Executive Group in 2022.

Presentation of the members of the Executive Group.

In 2022 the company’s Executive Group members’ salaries and remunerations, including fringe benefits – the CEO salary and remunerations excluded – amounted to a total of EUR 1,471,914. The members of the Executive Group have no significant separate fringe benefits and are covered by the shared Evli Group reward system.

The Executive Group members were issued 9,200 Evli shares as part of the share-based incentive plan established in 2017, 14,001 Evli shares as part of the share-based incentive plan established in 2018 and 140,000 Evli shares as part of the share-based incentive plan established in 2019. 
The pension liability of the Executive Group has been arranged through statutory pension insurance policies.

*Excluding the CEO