UPM Annual Report 2020
The most recent tendering process for auditing services was carried out in 2013. Following the stipulations of the Auditor Regulation, the last year that Pricewater houseCoopers Oy can act as the Company’s auditor is 2023.
meetings held elsewhere than in a direc tor’s place of residence were paid against invoice. Shares purchased for the Board members in 2020 may not be transferred
for two years from the purchase date (24 April 2020) or until the membership of the respective Board member ends, whichever occurs first.
The AGM further resolved that the audit fee would be paid against invoices, approved by the Board of Directors’ Audit Com mittee. The amounts paid to the auditor, as approved by the Audit Committee, are shown in the table below.
It is a long-standing customat UPMto remunerate Boardmembers in both shares and cash. Boardmembers are encouraged to ownCompany shares on a long-termbasis andmost of themhave substantial holdings, indicating a close alignment of the interests of Boardmembers with those of shareholders. Remuneration of executive management Remuneration at UPM is designed to encourage our value-based behaviour, encourage the achievement of ambitious strategic targets and compensate perfor mance accordingly. The aim of the remuneration process for the Company’s management team is to promote the Company’s long term financial success, competitiveness and favourable development of shareholder value. Remu neration comprises fixed and variable components. These components are shown in the table on the right. The variable components are linked to pre-determined and measurable perfor mance criteria, and thresholds have been
set for the payable amount. The payable amounts of incentives are linked to the management teammember’s position, as well as their achievement of performance measures and targets set on an annual basis. The Company has the right to reclaimany paid or due variable remuneration under cer tain circumstances, such as violation of law or other legal obligation or violation of the UPM Code of Conduct or other Company policies. Overall circumstances will be considered before exercising this right. The Company also has the right to cancel, recover or restate any paid or due variable remuneration in the event that financial or other calculations are found to be incorrect. Salaries, benefits and incentives earned by the President and CEO and members of the Group Executive Team are shown in the tables on the right. In 2020, costs under the Finnish statu tory pension scheme for the President and CEO amounted to EUR 349,000 (2019: EUR 465,000). Payments under the voluntary pension plan amounted to EUR 1,421,000 (2019: EUR 1,459,000). The President and CEO’s voluntary pension benefit was arranged through a defined benefit plan until the end of November 2020. The last contribution into the defined benefit plan was made in 2020. As of December 2020, the voluntary pension benefit is arranged through a defined contribution plan. First contribution to the defined contribution plan will take place in 2021. In 2020, costs under the Finnish and German statutory pension schemes for GET members (excluding the President and CEO) amounted to EUR 785,000 (2019: EUR 924,000). Payments under the voluntary pension plan amounted to EUR 964 000 (2019: EUR 947,000). Please see also Remuneration Report 2020 (subject to adoption in the AGM 2021) and Note 3.2 of the consolidated Financial Statements. Auditor and audit fees At the AGM 2020, PricewaterhouseCoopers Oy, a firm of Authorised Public Accountants, was re-elected as the Company’s statutory auditor for a one-year term, with Authorised Public Accountant Mikko Nieminen as the lead audit partner. Mr Nieminen has held this position since 4 April 2019. Mr Niemi nen is the CEO of PwC Finland.
BOARD REMUNERATION AND PAYMENT MECHANISM
COMPONENTS OF MANAGEMENT REMUNERATION
ANNUAL BASE FEE (EUR)
2020 2019
PAYMENT MECHANISM
COMPONENT
PAYABLE IN
BASIS OF PAYMENT TIME OF PAYMENT
Chair
190,000 190,000 •Approx. 40% in company shares, rest in cash to cover taxes. The Company paid costs and transfer tax related to the purchase of the Company shares. 135,000 135,000
Base salary
Cash
Service agreement/ Executive contract Service agreement/ Executive contract
Monthly
Deputy Chair
Fringe benefits
For example, company car and phone
Monthly
•Shares may not be transferred within two years from the purchase date or until the Director’s membership in the Board has ended, whichever occurs first.
Member
110,000 110,000
Short-term incentives Long-term incentives
Cash
Short-Term Incentive Plan Annually
Shares
Performance Share Plan (PSP)
Annually following a three-year earning period
COMMITTEE FEES AND PAYMENT MECHANISM
ANNUAL COMMITTEE FEES 2019-2020 (EUR)
CHAIR MEMBERS
PAYMENT MECHANISM
REMUNERATION OF THE PRESIDENT AND CEO
Audit Committee
35,000 20,000
15,000 10,000
Remuneration Committee Nomination and Governance Committee
SALARIES AND BENEFITS (EUR 1,000) Salary, paid during the financial year
2020
2019
cash
20,000
10,000
1,093
1,096
Short-term incentives, earned during the financial year
888 **)
708 *)
Share rewards, earned
1,902 ***)
2,734 ****)
BOARD REMUNERATION IN 2020
Benefits, paid during the financial year
31
29
ANNUAL BASE FEE (EUR) OF WHICH
ANNUAL COMMITTEE FEE (EUR)
TOTAL REMUNERATION (EUR)
NUMBER OF SHARES PURCHASED AS PART OF ANNUAL BASE FEE 2)
*) Paid in February 2021 **) Paid in February 2020
40% FOR SHARES (EUR)
60% IN CASH (EUR)
***) PSP 2018-2020 (shares delivered in February 2021) ****) PSP 2017-2019 (shares delivered in February 2020)
DIRECTOR 1)
190,000
Björn Wahlroos
20,000
210,000
3,123
76,000 114,000
135,000
REMUNERATION OF THE GROUP EXECUTIVE TEAM (EXCLUDING THE PRESIDENT AND CEO)
Berndt Brunow
10,000
145,000
2,219
54,000 81,000
110,000
Henrik Ehrnrooth
10,000
120,000
1,808
44,000 66,000
SALARIES AND BENEFITS (EUR 1,000) Salaries, paid during the financial year Short-term incentives, earned during the financial year
2020
2019
110,000
4,132
4,242
Emma FitzGerald
15,000
125,000
1,808
44,000 66,000
1,530 **)
2,054 *)
110,000
Piia-Noora Kauppi
Share rewards, earned
35,000
145,000
1,808
5,979 ***)
8,231 ****)
44,000 66,000
Benefits, paid during the financial year
134
123
110,000
Marjan Oudeman
15,000
125,000
1,808
44,000 66,000
*) Paid in February 2021 **) Paid in February 2020
110,000
Martin á Porta
10,000
120,000
1,808
44,000 66,000
***) PSP 2018-2020 (shares delivered in February 2021) ****) PSP 2017-2019 (shares delivered in February 2020)
110,000
Ari Puheloinen
10,000
120,000
1,808
44,000 66,000
110,000
AUDITOR’S FEES
Veli-Matti Reinikkala
20,000
130,000
1,808
44,000 66,000
110,000
Kim Wahl
EUR MILLION
2020
2019
2018
15,000
125,000
1,808
44,000 66,000
3.8 0.1 0.4 0.2 4.5
Audit fee
3.1 0.2 0.5 0.2 4.0
2.4 0.0 0.3 0.5 3.2
1,205,000
Total
160,000
1,365,000
19,806
Audit-related services
482,000 723,000
Tax services Other services
1) In AGM 2020 Jussi Pesonen and Suzanne Thoma’s terms ended due to their announcement that they were not available for re-election. No Board fees were payable to them during financial year 2020. 2) Purchase date 24 April 2020.
Total
108
109
UPM ANNUAL REPORT 2020
UPM ANNUAL REPORT 2020
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