Short-term incentives (STI)
Fortum’s STI programme is designed to support the achievement of the company’s financial and other relevant targets on an annual basis. As a main principle, all employees are covered by the programme or alternatively by a business specific or a comparable local variable pay arrangement.
The Board of Directors determines the performance criteria and award levels for the Fortum Executive Management. The awards are based on the achievement of Group financial performance, divisional targets, and individual targets. The target incentive opportunity is 20% and the maximum incentive opportunity is 40% of the annual base salary. The Board of Directors assesses the performance of the President and CEO and the members of the Fortum Executive Management on a regular basis.
Awards for other employees are based on a combination of Group, divisional or functional, and personal targets. The targets are set in annual performance discussions held at the beginning of the year. Awards under the STI programme are paid solely in cash.
In addition to the STI programme, other variable pay mechanisms may be used to reward employees for limited specific purposes, e.g. projects with significant importance and impact on Fortum level or to reward for extraordinary commitment and effort.