Remuneration and Terms of the Service Contract of the President and CEO
The terms of the service agreement of President and CEO Markus Rauramo are in line with Fortum’s Remuneration policy for the governing bodies. The malus and clawback provisions for the President and CEO were not utilised in 2022.
Fixed compensation
The fixed compensation includes a company car and phone as fringe benefits. In addition, the President and CEO received an electric vehicle subsidy of 25% of the taxable value of the full car benefit in accordance with Fortum’s Global Company Car Instructions. In line with the Solidium bridge financing facility with the Finnish State, Markus Rauramo’s salary will not increase in 2022 (as of the signing date of the agreement) and 2023.
Incentives
As resolved by the Board of Directors, the variable elements in total (STI and LTI pay-outs) are limited to a maximum of 120% of the individual’s annual fixed compensation. The maximum STI is limited to 40% of the annual fixed compensation.
In accordance with the Solidium bridge financing facility with the Finnish State, Markus Rauramo will not be paid the short- or long-term incentives (STI and LTI programmes) that accumulated in 2022 and 2023.
Pension
The retirement age of the President and CEO is determined in accordance with the Finnish Employees’ Pension Act. In addition to the statutory pension, the President and CEO is entitled to participate in the supplementary group pension plan for the members of the Fortum Executive Management. The annual defined contribution premium is 20% of the annual fixed compensation. If Markus Rauramo’s contract is terminated before the retirement age, the President and CEO is entitled to retain the funds that have accrued in the pension arrangement up to that time.
Other benefits and programs
Other benefits currently include insurance for permanent total disability and critical illness, life insurance, and voluntary participation in the sickness fund and in the Employee Share Savings (ESS) programme.
Termination of Contract
The notice period for both parties is 6 months. If the company terminates the contract, the President and CEO is entitled in addition to the 6 months’ notice period compensation to a severance pay corresponding to 6 months’ base salary.
Supplementary information
In addition to the information provided in the tables below, President and CEO Markus Rauramo has received compensation for serving as the Chair of the Supervisory Board of Uniper SE. The compensation for serving on Uniper’s Supervisory Board is paid according to the policies in force at Uniper. The fee for the service as the Chair until 21 December 2022 was EUR 204,247. In connection with the change in this Supervisory Board role in 2021, the Board of Directors of Fortum resolved that Markus Rauramo’s total compensation would not increase due to the changing role, and therefore the excess of the compensation paid based on the Deputy Chair role will be decreased from the Fortum incentive payments. In accordance with the terms of the Solidium bridge financing facility with the Finnish State, the President and CEO will not be paid any short- or long-term incentives that are accumulated in 2022 and 2023. Therefore the Board of Directors resolved that the agreed deduction will be done from the LTI payment in the spring 2024.