President and CEO’s remuneration

President and CEO´s remuneration

As a rule, the same remuneration principles and practices (with regard to employee benefits, for example) are applied to the remuneration of the President and CEO as to that of the other employees. However, considering the special status and demanding nature of the President and CEO position as well as the responsibilities inherent to the role of the President and CEO, certain benefits that deviate from those offered to the rest of personnel (such as the pension benefit) may be offered to the President and CEO.

Compensation paid to the President and CEO consists of a fixed monthly salary and a performance bonus. The performance bonus is based on annual operational and profit targets set by the Board of Directors Ponsse Plc’s Board of Directors decides on the President and CEO’s salary, the content and targets of the performance bonus, and ultimately, the payments of the compensation. The annual performance bonus of the President and CEO cannot exceed 50% of their salary in the previous year. Earning criteria for short-term incentives (performance bonus) are the operating profit rate, cash flow from business operations and the working capital rate. In 2020, EUR 145,805 were paid in performance bonuses.

Juho Nummela has been President and CEO since 1 June 2008. Under the contract of service concluded between the Company and its President and CEO, both parties may terminate the agreement by giving twelve (12) months’ notice. The contract will end without any period of notice when the President and CEO retires.

The President and CEO can retire at the age of 60 and is entitled to an earnings-related pension in accordance with the Employees Pensions Act. The President and CEO’s additional pension benefit will be determined in accordance with practices decided on by the Company’s Board of Directors and valid at the time. When the President and CEO’s contract of service ends, the additional pension benefit will also accrue during the period of notice in accordance with practices valid at the time.


  Period Base Salary Benefits Short-term incentives Long-term incentives Paid remunerations total
Nummela Juho 1.1.-31.12.2020 484,800.00 15,600.00 375,358.93 0 875,758.93
Share of remuneration element   55 % 2 % 43 % 0 % 100 %


Incentive Schemes

The President and CEO’s long-term compensation plan consists of a share-based incentive scheme established for key personnel in 2018. The scheme’s restriction period ends on 12 December 2021. Long-term incentives issued before 2021 have not included any earning criteria. Long-term incentives have included a vesting period and, therefore, are engaging incentives.  Participation in the scheme required that the President and CEO owned a certain number of shares determined by the Board or acquired them from the market or via a special issue of shares. Receiving the compensation was also tied to the President and CEO’s existing service contract at the time of payment.

In December 2018, the scheme’s compensation was paid partly in company shares and partly in cash. The monetary component covered taxes and tax-like fees arising from the bonuses to the President and CEO. Shares given as bonuses may not be transferred during the restriction period ending on 12 December 2021. If the President and CEO’s service contract ends during the restriction period, they will be obligated to return the shares given as a bonus in full or in part to the company, without any compensation.

In addition, the President and CEO has participated in a separate matching arrangement, in which the company committed to carrying out a 50 per cent matching arrangement against shares acquired by the CEO. The short-term incentive scheme included EUR 228,352 of fees related to the share-based incentive scheme.

The company also uses another long-term incentive scheme, a group pension insurance plan. The company pays an annual premium to the President and CEO amounting to 45 per cent of the annual earnings of the policyholder on which their statutory pension is based. The additional premium expenses for the group pension insurance agreement amounted to EUR 315,336. The lowest possible retirement age under the group pension insurance plan is 60 years. The arrangement allows for the company to determine its payment plan and duration.