Remuneration of the President and CEO in 2024

The President and CEO’s remuneration principles

The remuneration of the President and CEO typically includes the following elements: 

• A fixed monthly salary (including fringe benefits and other financial benefits) in accordance with the President and CEO’s skills, knowledge and experience.  
• A short-term performance bonus, the purpose of which is to provide encouragement and remuneration for the achievement of the goals  set out in the annual business strategy, and on a non-recurring basis for any other particularly good performance (paid annually).
• A long-term performance bonus, which is usually a share-based bonus. Its purpose is to align the objectives of the shareholders and the
• CEO to increase the company’s long-term value, to engage the CEO in the company, and to offer them a competitive share-based incentive plan based on earnings and the accrual of shares in the company.
• Supplementary pension, which is a pension benefit in addition to the statutory pension.

Juho Nummela has been the company’s President and CEO since 1 June 2008. Under the contract signed between the company and the President and CEO, both parties may terminate the contract with a six-month notice period. If the company terminates the contract, the company pays a remuneration equalling 12 months’ salary in addition to the salary and other benefits that have been determined for the period of notice. The contract ends without any period of notice when the President and CEO retires.

The President and CEO may retire at the age of 60, with the pension determined in accordance with the Employees Pensions Act.

The President and CEO's remuneration in 2024

In 2024, the President and CEO’s fixed monthly salary was EUR 43,267.00 from 1 to 31 January 2024, EUR 44,322.00 from 1 February to 31 August 2024, and EUR 44,323.21 from 1 September to 31 December 2024. Telephone, car, and bicycle benefits were included in the salary as fringe benefits, along with other one-off personnel benefits of negligible value. 

The fixed annual salary paid to the President and CEO in 2024 accounted for 44% of total remuneration, while the short- and long-term performance bonuses constituted 36%. The supplementary pension benefit paid to the President and CEO accounted for around 20% of total remuneration. No other remuneration was paid to the President and CEO in 2024. 

Performance

Short-term remuneration of the President and CEO 

During the 2024 financial year, the President and CEO was paid a performance bonus for the achievement of the targets set for 2023 in accordance with the Board of Directors’ assessment and decision. The targets set for the performance bonus were based on indicators related to the efficiency of working capital in 2023 (WoCa %, with a weighted value of 30%, and cash flow from operating activities (EUR), with a weighted value of 30%, in total a weighted value of 60%), the company’s profitability (EBIT %, with a weighted value of 30%), and personnel satisfaction (eNPS, with a weighted value of 10%). The annual performance bonus cannot exceed 50% of the salary paid in the previous year.

In 2024, a total performance bonus of EUR 72,983.51 was paid based on the achievement of the targets of the 2023 performance bonus, representing 29% of the maximum amount of the performance bonus. 

During the 2024 financial year, the President and CEO continued to be covered by the short-term incentive scheme, in which the targets set for the performance bonus were based on indicators related to the efficiency of working capital in 2024 (WoCa %, with a weighted value of 20%, and cash flow from operating activities (EUR), with a weighted value of 30%, in total a weighted value of 50%), the company’s profitability (EBIT %, with a weighted value of 30%), personnel satisfaction (eNPS, with a weighted value of 10%) and the accident frequency rate (LTIF, with a weighted value of 10%). The annual performance bonus cannot exceed 50% of the salary paid in the previous year. 

The performance bonus to be paid based on the 2024 financial year is based on the Board of Directors’ assessment and decision regarding the achievement of the targets set for 2024. The performance bonus is expected to be paid to the President and CEO in March 2025. 

Long-term remuneration of the President and CEO

In 2023, the company’s Board of Directors decided on a performance-based shareholding plan for the CEO for 2023–2027. The aim of the plan is to align the objectives of the shareholders and the President and CEO to increase the company’s long-term value, to retain the President and CEO at the company, and to offer them a competitive incentive scheme based on earning and accumulating shares in the company. In June 2024, the Board of Directors of Ponsse Plc decided on the targets of the President and CEO's share-based incentive scheme for the performance period that began in 2024.

The President and CEO’s shareholding scheme consists of five performance periods: the calendar years 2023, 2023–2024, 2023–2025, 2024–2026 and 2025–2027. The 2023 and 2023–2024 performance periods include a restriction period, starting from the payment of the reward and ending on 31 December 2025. The conditional rewards will be paid by the end of May 2024, 2025 and 2026. Shares received as conditional rewards may not be transferred during the restriction period ending on 31 December 2025, 31 December 2026 and 31 December 2027. The performance-based rewards will be paid by the end of the May following the end of each performance period. Shares received as remuneration for the 2023 and 2023–2024 earnings periods may not be transferred during the restriction period; that is, before 31 December 2025. 

The earning criteria for the earnings periods beginning in 2023 are Ponsse Group’s operating result, net sales growth and personnel satisfaction.  The portion of the maximum reward to be paid to the President and CEO is determined based on the achievement of the targets set for the earning criteria in relation to the investment made by the President and CEO.

In May 2024, a total of 11,457 shares worth EUR 282,226 were paid for the 2023 performance period, with a cost impact of EUR 0.4 million for the company. A stock exchange release concerning these was issued on 30 May 2024. From the 2023–2024 and 2023–2025 performance periods, it is possible to earn a total of 42,612 shares, including the cash portion (gross reward). The conditional rewards for the 2023–2024 performance period will be paid by the end of May 2025.

For the 2024–2026 performance period of the President and CEO’s performance-based shareholding plan, the rewards will be based on the Group’s operating result, net sales, employee satisfaction and accident frequency rate (LTIF). The rewards to be paid for the 2024–2026 performance periods are estimated to correspond to the value of no more than 50,000 Ponsse Plc shares in total, including the cash portion (gross reward). Shares received as conditional rewards may not be transferred during the restriction period ending on 31 December 2026. The performance-based reward will be paid by the end of May 2027.

The payment of rewards under both the conditional and performance-based shareholding plans requires that the person’s employment relationship continues.