Kalmar follows a total remuneration approach, where all remuneration elements are taken into account when setting and reviewing compensation. As defined in the Company’s Remuneration policy, the remuneration of the CEO and the Deputy CEO (if any) may consist of fixed salary, pension, other benefits and short- and long-term incentives. The remuneration of the CEO is decided by the Board, based on the proposals by the Personnel and Remuneration Committee (PRC).
Fixed salary
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 in Finland, such as phone and car.
Short-term Incentives
The short-term incentive (STI) is a performance based bonus scheme that typically consists of a one-year performance period. For the CEO the earning opportunity is at target achievement level 65% and at maximum achievement level 130% of annual base salary.
The performance period is typically one calendar year, and the Board decides the performance criteria separately for each period. In 2025, the STI plan is based on comparable operating profit and cash flow (80% weight) as well as strategic targets related to safety and leadership development (20% weight).
The Board evaluates the performance after each performance period and approves the payments. The rewards based on the STI plan 2025 will be paid in Q1 / 2026.
Long-term Incentives
Long-term incentives (LTI) in Kalmar are share based performance or restricted share plans. The annual LTI earning opportunity for the CEO is at target level achievement 115% and at maximum level achievement 230% of annual base salary, defined at the grant of each plan.
Mr. Niiranen participates currently in three performance share plans (PSP) and the details of each plan are described in the table below.
|
LTI Plan |
Performance Criteria |
Target reward |
Maximum reward |
Reward payment |
|
PSP 2023-2025 |
2023: Earnings per share (EPS), 2024: Services Segment’s Gross Profit, 2025: Eco Portfolio share of order intake* |
2,780 ** |
5,560 ** |
Q1 / 2026 |
|
PSP 2024-2026 |
2024: Earnings per share (EPS), 2025-2026: Absolute Total Shareholder Return (40% weight), Services segment revenue growth (40%), CO2 emission reduction (15%), improving gender diversity in senior and leadership positions (5%) |
17,335 ** |
34,670 ** |
Q1 / 2027 |
|
PSP 2025-2027 |
Absolute Total Shareholder Return (40% weight), Services segment revenue growth (40%), CO2 emission reduction (15%), improving gender diversity in senior and leadership positions (5%) |
19,500 *** |
39,000 *** |
Q1 / 2028 |
* CEO is eligible for the rewards only based on the company’s performance during 2024-2025.
** Share allocations in PSP 2023-2025 and PSP 2024-2026 were defined as a net number of shares. The company will pay cash on top of the shares to cover the applicable taxes.
*** Share allocations in PSP 2025-2027 were defined as a gross number of shares and the number of shares here indicates the total gross number of shares granted. The final reward will be paid in a combination of shares and cash. Cash portion is aimed to cover the applicable taxes.
The currently active long-term incentive plans are described in more detail in the section Share-based incentive plans.
Other terms of service
The terms of the CEO's service are specified in writing in the service contract, which is approved by the Board of Directors.
The notice period for termination of service is six (6) months on the CEO’s and on the Company’s side. If the service agreement is terminated by the Company, the severance compensation equals to six (6) months’ fixed salary on top of the notice period. No severance compensation is paid if the contract is terminated by the CEO.
The company does not offer any supplementary pension to the CEO at the moment, and the pension contributions are based on the pension legislation (TyEL) in Finland. The retirement age is based on the legislation in Finland.