Remuneration

Other remuneration information

Decision-making procedures and main principles of remuneration

The aims of the remuneration system for Orion Corporation’s Board of Directors and executive management are to enhance the Company’s competitiveness and long-term financial success, to achieve the Company’s targets and strategy, and to increase shareholder value.

Remuneration principles concerning the Board of Directors

The remuneration of the members of the Board of Directors is decided on by the Annual General Meeting of the shareholders. The remuneration recommendation to be presented in the invitation to the Annual General Meeting is prepared by the Nomination Committee. The Board of Directors’ remuneration is for work carried out within the Board and its committees.

Remuneration of the Board of Directors in 2022

According to the decision by the AGM 2022 as an annual fee, the Chairman shall receive EUR 90,000, the Vice Chairman shall receive EUR 55,000 and the other members shall receive EUR 45,000 each. However, if a member of the Board acts as the Chairman of the Audit Committee or the R&D Committee, her/his annual fee shall be EUR 55,000.

In addition, as a fee for each meeting attended, the Chairman shall receive EUR 1,200, the Vice Chairman shall receive EUR 900 and the other members shall receive EUR 600 each. The travel expenses of the Board members shall be paid in accordance with the previously adopted practice. The aforementioned meeting attendance fees shall also be paid to the Chairmen and to the members of the committees established by the Board. The meeting attendance fees of Board members permanently resident outside Finland shall be doubled if the meeting is held outside the country of residence of such a member and the person attended the meeting at the place of the meeting.

Of the annual fee, 60% shall be paid in cash and 40% in Orion Corporation B-shares, which shall be acquired for the members over the period 29 April - 5 May 2022 from the stock exchange in amounts corresponding to EUR 36,000 for the Chairman, EUR 22,000 for the Vice Chairman and for the board members acting as the Chairmen of the Audit Committee and the R&D Committee and EUR 18,000 for each of the other members. The part of the annual fee that is to be paid in cash corresponds to the approximate sum necessary for the payment of the income taxes on the fees and shall be paid no later than 31 May 2022. The annual fees shall encompass the full term of office of the Board of Directors.

In addition, the AGM decided that the Company shall pay the transfer tax related to the part of the annual fee of the Board of Directors paid in shares. Potential statutory social security and pension costs incurring to Board members having permanent residence outside Finland shall be borne by Orion Corporation as required by the applicable national legislation.

Board members are required to retain ownership of the Orion Corporation B shares paid as fees for a period of two years from the date of payment of the fees. However, if the person's membership of the Board of Directors of the company were to end before the expiry of the restriction on transfer, the restriction on
transfer shall expire at the end of the membership of the Board of Directors.

Remuneration principles concerning the President and CEO

The remuneration of the President and CEO is based on the remuneration policy approved by the Annual General Meeting 2020 in accordance with the Board of Directors’ proposal. The remuneration of the President and CEO is decided by the Board of Directors. The Personnel and Remuneration Committee of the Board of Directors is responsible for preparing the remuneration. The remuneration of the President and CEO consists of a monthly salary with fringe benefits, an annual performance-based bonus (STI) and long-term share-based incentive plans (LTI). The use of a share-based incentive scheme as part of the President and CEO’s remuneration is in principle in the interest of the company and its shareholders because it merges the objectives of the shareholders and the President and CEO to promote the company’s strategy and its long-term financial success. The President and CEO’s variable remuneration components (an annual performance-based bonus and long-term incentive plans) are based on predefined targets that are confirmed annually by the Board of Directors. The targets are set so that they promote implementation of the company’s strategy and its financial success over the short and long terms. The Board of Directors assesses and confirms the achievement of the objectives annually, or in case of earning periods longer than a year, at the end of each earning period.

The President and CEO Liisa Hurme’s fixed annual salary including fringe benefits is EUR 667,980.

The annual performance-based bonus (STI) of the President and CEO can be no more than twelve (12) months’ salary. Regarding the long-term share-based incentive plan (LTI), the Board of Directors will decide the maximum share reward opportunity for the earning period commencing in 2023 later. The criteria and upper limits of the share-based incentive plans in force for key persons of the Group are determined as described in section Share-based incentive plans. In the case of the President and CEO, the principle of owning the company's shares is that her shareholding in the company corresponds to at least her fixed gross annual salary.

Notice period of the service agreement of President and CEO is 6 months, both for the company and for the President and CEO. The company has the right to immediately discharge the President and CEO from her duties. In certain situations, if the President and CEO has breached the service agreement, the company has also the right to terminate the service agreement with immediate effect. With the exception of such agreement breach situations, if the company has terminated the service agreement, the President and CEO shall be entitled to a severance pay equalling to her base salary for 18 months. The prerequisite for the severance pay is also that the company and the President and CEO enter into a separate agreement. If the President and CEO terminates the service agreement, no severance pay is paid.

The President and CEO’s pension is determined by the law applicable to employees (i.e., she has no supplementary pension arrangement).

Remuneration principles concerning other executives

The remuneration of the other members of the Group’s Executive Management Board is decided by the Board of Directors or its Chairman. For the other executive management, the President and CEO and the Personnel and Remuneration Committee of the Board of Directors are responsible for preparing the remuneration. The remuneration system for these persons comprises a monthly salary including fringe benefits, an annual performance-based bonus (STI) and long-term share-based incentive plans (LTI). An annual performance-based bonus and long-term incentive plan are based on predefined targets that are confirmed annually by the Board of Directors. The targets are set so that they promote implementation of the company’s strategy and its financial success over the short and long terms. The Board of Directors assesses and confirms the achievement of the objectives annually, or in case of earning periods longer than a year, at the end of each earning period.

The maximum performance-based bonus of a member of the Executive Management Board cannot exceed the aforementioned maximum performance-based bonus of the President and CEO. The upper limits of the share-based incentive plans in force for key persons of the Group are determined as described in section Share-based incentive plans. The notice periods of an employment agreement of members of the Executive Management Board are 2-3 months, if a member of the Executive Management Board resigns herself/himself. If the employment agreement is terminated by the employer, the notice period is six months. In addition, the members of the Executive Management Board have the right to a severance pay of six months salary if the employer terminates the employment agreement.

The pensions of the members of the Executive Management Board are determined by the law applicable to employees (i.e., they have no supplementary pension arrangements).

Remuneration of other executives in 2021

The salaries, fees, fringe benefits and performance-based bonuses paid for 2021 to the members of the Executive Management Board, excluding the President and CEO, totalled EUR 4,102,583 (4,854,763) comprising EUR 1,483,765 (1,597,264) in salaries and fringe benefits and EUR 2,618,818 (3,257,499) in performance-based bonuses. The total number of Executive Management Board members was 7 (7) at year end 2021, including also the President and CEO.