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Decision-making procedure

Remuneration at Kalmar is managed through clearly defined processes and involves the Annual General Meeting of Shareholders (AGM), the Shareholders’ Nomination Board, the Board of Directors  and the Board’s Personnel and Remuneration Committee. The AGM resolves annually on the remuneration of members of the Board of Directors, based on a proposal made by the Shareholders’ Nomination Board. 

 

The Personnel and Remuneration Committee is responsible for preparing a proposal to the Board of Directors regarding the terms of service of the President and CEO, and prepares the remuneration issues of other top management members as needed before board approval. The committee prepares the remuneration policy and remuneration report for Kalmar’s governing bodies. Furthermore, the Personnel and Remuneration Committee prepares Kalmar’s remuneration strategy and compensation systems to be used and follows their outcome and functionality.



Remuneration policy

The Remuneration Policy presents the remuneration framework for the members of the Board of Directors and the President and CEO of Kalmar. The Policy shall also be applied to any Deputy CEO, should such Deputy CEO be appointed.

 

In accordance with the implementation of the amended European Shareholder Rights Directive (SRD) in Finland, Kalmar’s Remuneration Policy has been presented and approved at the Annual General Meeting (AGM) of Cargotec on 30 May 2024. The AGM resolution is advisory, but all remuneration shall be in line with the  Remuneration Policy presented to shareholders. The Remuneration Policy is intended to remain in place for four years until the AGM of 2028.

 

Board remuneration

Based on the decision of the AGM of Cargotec (30 May 2024), the Board’s annual remunerations are as follows:

 

  • Chair of the Board: EUR 160,000
  • Vice Chair of the Board: EUR 95,000
  • Each member of the Board: EUR 80,000
  • Chair of the Audit and Risk Management Committee: EUR 20,000
  • Each member of the Audit and Risk Management Committee: EUR 10,000
  • Chair of any other committee possibly constituted by the Board in accordance with a separate decision by the Board: EUR 15,000 (maximum)
  • Each member of any other committee constituted by the Board: EUR 5,000 

 

Approximately 50 percent of the yearly remuneration will be paid in Kalmar’s class B shares and the rest in cash. Kalmar will cover the transfer taxes related to the remuneration paid in shares. In addition, the members of the Board of Directors will be paid EUR 3,000 per meeting held on a different continent than their domicile and EUR 1,500 for additional meetings held outside the regular board and committee meeting cadence. The expenses of Board members related to travel and accommodation as well as other costs directly related to board and committee work will be reimbursed in accordance with Kalmar’s policy.



Remuneration of the Leadership Team and the President and CEO

Kalmar follows a total remuneration approach, where all remuneration elements are taken into account when setting and reviewing compensation. The remuneration of the CEO and the Deputy CEO (if any) may consist of fixed salary, pension and other benefits and programmes, and of variable pay components. The variable pay includes both short- and long-term incentives.

 

Pursuant to the President and CEO’s contract of service with Sami Niiranen, Mr. Niiranen’s remuneration consists of an annual base salary, currently 550,000 EUR. Mr. Niiranen is also entitled to customary fringe benefits and to the company's short- and long-term incentive schemes.

 

The short-term incentive scheme earning opportunity for the President and CEO is at target level 65% and at maximum level 130% of annual base salary. In 2024, the short-term incentive scheme is based on comparable operating profit and cash flow (70% weight) as well as individual strategic targets (30% weight).

 

The long-term incentive scheme earning opportunity for the President and CEO is at target level 115% and at maximum level 230% of annual base salary, defined at the grant of each scheme. Mr. Niiranen currently participates in two long-term incentive schemes. Mr. Niiranen has been granted an opportunity to earn a maximum of 2,500 shares within the PSP 2023-2025 and a maximum of 15,000 shares within the PSP 2024-2026.

 

The President and CEO Sami Niiranen does not have a supplemental pension plan, the pension contributions are done according to the Finnish legislation (TyEL).

 

The President and CEO’s contract of service may be terminated on a six (6) months’ notice. Upon termination of the contract by the Company for reasons other than a breach of the contract, the President and CEO shall be entitled to receive severance payment equivalent to six (6) months’ salary in addition to the salary for the notice period.

 

The remuneration of the other members of the Leadership Team consists of a base salary, customary fringe benefits and incentives as in force from time to time. The short-term incentive earning opportunities for the Leadership Team members are at target level 40-50% and at maximum level 80-100% of the annual base salary. The long-term incentive earning opportunities for the Leadership Team members are at target level 50% - 80% and at maximum 100%-160% of the annual base salary defined at the grant of each scheme.

 

The pension benefits of the members of the Leadership Team are determined in accordance with applicable law or collective bargaining agreements.

 

Share-based incentive programmes

Kalmar intends to continue Cargotec’s existing share-based incentive programmes on substantially the same terms, but with the amendment that the rewards will be in Kalmar shares instead of Cargotec shares and the rewards payable, as expressed in number of Kalmar shares, will be adjusted accordingly. The Board of Directors of Kalmar will resolve on the details of the share-based incentive programmes separately, including with respect to determining the ratio for converting the share-based rewards under Cargotec’s current incentive programmes into rewards expressed in Kalmar shares.

 

The long-term incentive schemes in Kalmar are either performance share plans based on the company's financial performance or restricted share plans that are based on continuous employment. Schemes typically consist of a 3-year performance or restriction period. Company's practice is that one new performance and restriction period commences annually.


Remuneration Report 

The company shall publish its Remuneration Report on the company’s website in accordance with the Corporate Governance Code. The Remuneration Report sets out how Kalmar has implemented its Remuneration Policy. The report includes information concerning remuneration of the Board of Directors and the President and CEO of Kalmar. The shareholders will take an advisory vote on the approval of the Remuneration Report at the Company’s Annual General meeting in 2025.



Remuneration Policy