Other operating income Other operating income mainly includes gains on the disposal of non- current assets and rental income. Further, other operating income includes foreign exchange gains and losses in respect of UPM’s normal business activities. Gains and losses on derivatives not qualifying hedge accounting are also recognised in other operating income. Emission rights The group participates in the European Emissions Trading Scheme aimed at reducing greenhouse gas emissions. Emission rights received from governments free of charge to emit a fixed tonnage of carbon dioxide in a fixed period of time give rise to an intangible asset for the emission rights, a government grant and a liability for the obligation to deliver emission rights equal to the emissions that have been made during the compliance period. Emission rights are initially recognised as intangible assets based on market value at the date of initial recognition. Emission rights are not amortised. If the market price of emissions rights at the balance sheet date is less than the recognised costs, any surplus emission rights that are not required to cover actual and estimated emissions during the financial year, are impaired to the market price. Government grants are recognised as deferred income in the balance sheet at the same time as emission rights and are recognised in other operating income in the income statement, systematically, over the compliance period to which the corresponding emission rights relate. The liability to deliver emission rights is recognised based on actual emissions. The emissions realised are expensed under other operating costs and expenses in the income statement and presented as a provision in the balance sheet. The liability is settled using emission rights on hand, measured at the carrying amount of those emission rights. Emission rights and associated provisions are derecognised when disposed. Any profit or loss represents the costs of purchasing additional rights to cover excess emissions, the sale of unused rights in the case realised emission are under emission rights received free of charge or the impairment of unused emission rights. 2.4 Earnings per share and dividend According to UPM dividend policy, the company aims to pay an attractive dividend amounting to 30-40% of the group annual operating cash flow per share. The dividend paid in 2020 were EUR 693 million (EUR 1.30 per share) which is 38% of the operating cash flow per share and in 2019 EUR 693 million (EUR 1.30 per share). The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 693 million, EUR 1.30 per share, will be paid in respect of 2020. The proposed dividend represents 69% of UPM’s operating cash flow per share for the year 2020.
Earnings per share
Profit attributable to owners of the parent company, EURm Weighted average no. of shares (1,000)
Basic earnings per share, EUR Diluted earnings per share, EUR
Salaries and fees
Pension and other post-employment benefits, defined benefit plans Pension costs, defined contribution plans
13 89 94
Other indirect employee costs 1)
1,188 1,214 1) Other indirect employee expenses primarily include other statutory social expenses, excluding pension expenses.
Earnings per share Earnings per share (EPS) is the amount of profit for the period attributable to each ordinary share. The basic earnings per share are computed using the weighted average number of shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of shares outstanding during the period plus the dilutive effect of share options. The group did not have share- option schemes at the end of 2020 and 2019. Dividend Dividend distribution to the owners of the parent company is recognised as a liability in the group’s consolidated financial statements in the period in which the dividends are approved by the parent company’s shareholders.
3.2 Key management personnel The Annual General Meeting 2020 resolved that the remuneration of the members of the Board of Directors remain unchanged. No changes have taken place in the directors' remuneration since 2017. In 2020 and 2019, the Chair of the Board of Directors received an annual base fee of EUR 190,000, the Deputy Chair of the Board EUR 135,000 and other members of the Board EUR 110,000. The annual base fee was paid in company shares and cash so that approximately 40% of the fee was paid in the company shares to be purchased on the Board members’ behalf, and the rest in cash. The company paid any costs and transfer tax related to the purchase of the company shares.
The Chair of Audit Committee received annual committee fee of EUR 35,000 and Chair of Remuneration Committee as well as Chair of Nomination and Governance Committee EUR 20,000. The members of Audit Committee received annual committee fee of EUR 15,000 and members of other committees EUR 10,000. The annual committee fees were paid in cash. In 2020, 3,123 (2,911) company shares were purchased to the Chair, 2,219 (2,068) to the Deputy Chair and 1,808 (1,685) to other members of the Board.
Earnings and dividend per share
0.00 0.50 1.00 1.50 2.00 2.50 3.00
Shareholdings (no. of shares) and fees of the Board of Directors
Annual committee fee (EUR 1,000)
Shareholdings 31 December
Annual base fee (EUR 1,000)
Board members Björn Wahlroos, Chair
268,317 314,752 11,314
190 135 110 110 110 110 110 110 110 —
190 135 110
20 10 10 15 35 15 10 10 20 —
20 10 10
Berndt Brunow, Deputy Chair
Henrik Ehrnrooth Emma FitzGerald 2) Piia-Noora Kauppi Marjan Oudeman
Earnings per share Dividend per share (2020: proposal)
Jussi Pesonen, President and CEO 1)
Martin à Porta 2) Ari Puheloinen
110 110 110 110
10 20 10 15
Veli-Matti Reinikkala Suzanne Thoma 1)
1) Suzanne Thoma and Jussi Pesonen stepped down from the Board in 2020 2) Emma FitzGerald and Martin à Porta were elected as new directors to the Board in 2020