The Finnish Corporate Governance Code 2015 requires that Fortum issues a remuneration statement regarding the salaries and other remuneration paid by the company. Furthermore, the Cabinet Committee on Economic Policy, representing the State owner, issued a statement in August 2012 on the remuneration of executive management and key individuals in companies with State ownership. Fortum’s remuneration principles follow the Finnish Corporate Governance Code. They also comply with the recommendations on the remuneration and retirement benefits of executive management and key individuals in companies with state ownership.
When determining remuneration, the company’s financial performance and external market data, particularly the remuneration for similar positions among peer companies, are taken into consideration.
Remuneration at Fortum is directed by the Group’s remuneration principles and Fortum’s general compensation and benefits practices.
The Shareholders’ Nomination Board, the Annual General Meeting of Shareholders (AGM), the Board of Directors and the Nomination and Remuneration Committee are all involved in the preparations and decision-making regarding remuneration at Fortum.
At Fortum, we strive for a performance-focused culture where our people understand:
- the company, its strategy and performance targets,
- how they as individuals can impact the results,
- the link between business performance and remuneration, and
- the importance of delivering sustainable business results.
This philosophy underpins our remuneration principles which are designed to encourage and recognise high performance and behaviour in line with Fortum’s values.
Decision-making relating to remuneration
The Shareholders’ Nomination Board, the Annual General Meeting of Shareholders (AGM), the Board of Directors and its Nomination and Remuneration Committee are involved in the discussions and decision-making regarding remuneration at Fortum. The Shareholders’ Nomination Board is responsible for presenting a proposal for remuneration of the members of the Board of Directors to the AGM. The decision on the remuneration of the members of the Board of Directors is made in the AGM.
The Board of Directors decides, based on the proposals made by the Nomination and Remuneration Committee, on remuneration principles and remuneration for senior management (President and CEO and the other members of Fortum Executive Management). Similarly, the Board of Directors approves all company-wide incentive arrangements for senior management and other key personnel.