Remuneration

The Annual General Meeting decides on the remuneration to the members of the Metso Board for one term of office at a time.

The Annual General Meeting 2024 confirmed the annual remunerations to the Board members as follows:

• Chair - EUR 171,000
• Vice Chair - EUR 87,000
• Other members - EUR 70,500

Additional annual remuneration:

• Chair of the Audit and Risk Committee (ARC) - EUR 25,500
• Chair of the Remuneration and HR Committee (RHRC) - EUR 13,000
• Committee members (ARC) - EUR 10,700
• Committee members (RHRC) - EUR 5,350

The annual fees shall be paid to the Board members of Metso in proportion to the actual length of their term of office.

Meeting fees (including committee meetings):

• EUR 900 for meetings requiring travel within the Nordic countries
• EUR 1,800 for meetings requiring travel within a continent
• EUR 3,000 for meetings requiring intercontinental travel
• EUR 900 for meetings with remote attendance

The Board members of Metso could choose to receive either 40% or 20% of their annual fixed fee in shares of Metso. Board members shall be reimbursed the direct costs arising from the board work.

A condition for receiving the annual remuneration is that Board members are obliged, based directly on the AGM’s decision, to use 20 or 40 percent of their annual fixed fee for the purchase of Metso’s shares from the market at a price formed in public trading.

Remuneration and employment terms of Metso’s President and CEO

The remuneration paid to the President and CEO is determined by the Metso Board. Metso’s President and CEO is entitled to participate in short- and long-term incentive programs. The terms and conditions of these programs are decided by the Board.

Employment terms and conditions of Metso’s President and CEO Sami Takaluoma:

Annual Salary

Total annual salary EUR 840,000 including fringe benefits.

Short-term incentive (annual performance bonus)

The annual bonus can be earned in accordance with terms approved by the Board. The maximum bonus is 100% of the total annual salary.

Long-term incentives

According to the Long-term Performance Share Plan, the maximum share allocation for the President and CEO corresponds to 200% of the total annual salary. The purpose of the plan is to align the interests of Metso’s management and shareholders in creating shareholder value. 

Pension

The retirement age is according to Finnish statutory pension system. In addition, the President and CEO is entitled to participate in a supplementary defined contribution pension plan. The supplementary pension contribution is equivalent to 20% of the annual salary.

Termination of assignment

The notice period for both parties is six (6) months. Severance pay is the full monthly salary multiplied by twelve (12) if the agreement is terminated by the company.

Remuneration for Leadership Team members

The Board’s Remuneration and HR Committee reviews the compensation and benefits of the other Leadership Team members based on the President and CEO’s proposal. The total remuneration comprises a total annual salary, customary fringe benefits, pension as well as short and long-term incentives.

Participation in variable incentive programs is based on the respective terms and conditions of the program. The Board evaluates the achievement of the targets for the Leadership Team members. Metso’s Leadership Team members residing in Finland also benefit from a supplementary defined contribution pension plan.

Management remuneration in 2023

The following remuneration details of Metso’s Leadership Team members, excluding President and CEO, amounted to a total of EUR 8,710,498 during 2023. The table below illustrates the remuneration elements paid to the Leadership Team members during 2023. President and CEO’s remuneration is illustrated in a separate Remuneration report.

Leadership Team benefits also include a supplementary defined contribution pension plan. In 2023, pension insurance premium payments totaled EUR 548 thousand.

The short-term incentive plan, Metso Bonus, covers approximately 9,000 employees globally, including the Leadership Team. The Board approves the Group-level terms and targets for the Metso Bonus annually. In addition, the Board annually sets and approves the President and CEO’s short-term incentive plan.

The Bonus payout, if any, is mainly based on the achievement of predefined financial targets. For 2023, the financial targets used were sales, adjusted EBITA and customer satisfaction on the Group and Business Area levels. In addition to the financial targets, individual, team and business bonus performance targets are used.

Maximum Metso Bonus payout, % of annual salary:

In addition to the Metso Bonus, local productivity plans are designed to drive and support the performance of various production units. Targets for local productivity plans are mainly based on productivity, quality, and safety KPIs. Local mandatory bonus plans are defined by local legislative requirements and are typically profit-sharing plans. An employee can participate in one bonus plan at a time.

The Board decides on and implements Metso’s long-term incentive plans. The purpose of these plans is to align the interests of operative management and shareholders in driving the company’s performance and success. The plans also aim to ensure long-term commitment of management and offer them a competitive reward scheme.

Any shares to be potentially paid as reward in these incentive plans will be acquired through public trading, and therefore will have no diluting effect on the share value. Share repurchase and share issue authorizations are obtained from the Annual General Meeting. The current valid authorizations are presented on our website. There are no options outstanding or available from any of the prior option programs.

The company applies a share ownership recommendation policy for the members of the Leadeship Team and for the President and CEO. In accordance with this policy, at least 50 percent of the share rewards (net shares after deduction of the applicable payroll tax) received by these individuals under the performance-based share plans shall be retained until the share ownership of the individual participant amounts to his/her annual gross base salary.

If the participant’s employment or service ends for reasons relating to the participant before the reward payment, no reward will be paid from the long-term incentive plans.

Long-term incentive plans at Metso

On July 1, 2020, Metso announced new share-based long-term incentive programs for the Company’s management and selected key employees. The programs include a Performance Share Plan (also “PSP”) and a Restricted Share Plan (“RSP”) as a complementary structure for specific situations. 

Status of the ongoing Metso PSP and RSP plans as of December 31, 2023

*) Maximum number of gross shares, taxes included, payable if the performance criteria are achieved in full.

Performance Share Plan

The Performance Share Plan consists of annually commencing individual performance share plans, each comprising a three-year performance period, followed by the payment of the potential share reward in listed shares of Metso. The commencement of each new individual Plan is subject to a separate Board approval.

Performance Share Plan 2024-2026

PSP 2024-2026 commenced in 2024 and the potential share rewards thereunder will be paid in spring 2027, provided that the performance targets set by the Board of Directors for the Plan are achieved.

The performance measures based on which the potential reward under PSP 2024-2026 will be paid are the absolute total shareholder return of Metso’s share, earnings per share and sales growth of the company’s Metso Plus offering.

The ESG metric drives the Company performance towards developing a broader and more sustainable product and service offering to our customers and ensures that the share of overall sales that comes from Metso Plus offering increases yearly. The set ambition level is high with the PSP 2024-2026 threshold set at group sales growth +3 percentage points.

Approximately 200 key employees of Metso, including the Leadership Team are eligible to participate in PSP 2024-2026. If all the performance targets set for PSP 2024–2026 are fully achieved, the aggregate maximum number of shares to be paid based on this Plan is approximately 2.2 million shares (referring to gross earning before the withholding of the applicable payroll tax).

Performance Share Plan 2023-2025

PSP 2023-2025 commenced in 2023 and the potential share rewards thereunder will be paid in spring 2026, provided that the performance targets set by the Board of Directors for the Plan are achieved.

The performance measures based on which the potential reward under PSP 2023-2025 will be paid are the absolute total shareholder return of Metso’s share, earnings per share and sales growth of the company’s Metso Plus products.

Approximately 200 key employees of Metso, including the Leadership Team are eligible to participate in PSP 2023-2025. If all the performance targets set for PSP 2023–2025 are fully achieved, the aggregate maximum number of shares to be paid based on this Plan is approximately 2.1 million shares (referring to gross earning before the withholding of the applicable payroll tax).

Performance Share Plan 2022-2024

PSP 2022-2024 commenced in 2022 and the potential share rewards thereunder will be paid in spring 2025, provided that the performance targets set by the Board of Directors for the Plan are achieved.

The performance measures based on which the potential reward under PSP 2022-2024 will be paid are the absolute total shareholder return of Metso’s share, earnings per share and sales growth of the company’s Metso Plus products.

Approximately 200 key employees of Metso, including the Leadership Team are eligible to participate in PSP 2022-2024. If all the performance targets set for PSP 2022–2024 are fully achieved, the aggregate maximum number of shares to be paid based on this Plan is approximately 1.8 million shares (referring to gross earning before the withholding of the applicable payroll tax).

Performance Share Plan 2021-2023

PSP 2021-2023 commenced in 2021 and the potential share rewards thereunder will be paid in spring 2024, provided that the performance targets set by the Board of Directors for the Plan are achieved.

The performance measures based on which the potential reward under PSP 2021-2023 will be paid are the absolute total shareholder return of Metso’s share, earnings per share and an ESG measure linked to sustainable development of Metso.

Approximately 190 key employees of Metso, including the Leadership Team are eligible to participate in PSP 2021-2023. If all the performance targets set for PSP 2021–2023 are fully achieved, the aggregate maximum number of shares to be paid based on this Plan is approximately 2.8 million shares (referring to gross earning before the withholding of the applicable payroll tax).

Restricted Share Plan

The Restricted Share Plan consists of annually commencing restricted share plan, each comprising a three-year retention period and followed by the payment of the share rewards granted within the Plan in listed shares of Metso. The commencement of each new individual Plan is subject to a separate Board approval.

The purpose of the Restricted Share Plan is to serve as a complementary long-term retention tool for individually selected key employees of Metso in specific situations.

Restricted Share Plan 2024-2026

In December 2023, the Board of Directors decided to commence a new plan period for the complementary Restricted Share Plan. The share rewards potentially granted thereunder will be paid in spring 2027.

The aggregate maximum number of shares to be paid based on RSP 2024-2026 is approximately 434,000 shares (referring to gross earning before the withholding of the applicable payroll tax).

Restricted Share Plan 2023-2025

In December 2022, the Board of Directors decided to commence a new plan period for the complementary Restricted Share Plan. The share rewards potentially granted thereunder will be paid in spring 2026.

The aggregate maximum number of shares to be paid based on RSP 2023-2025 is approximately 425,000 shares (referring to gross earning before the withholding of the applicable payroll tax).

Restricted Share Plan 2022-2024

In December 2021, the Board of Directors decided to commence a new plan period for the complementary Restricted Share Plan. The share rewards potentially granted thereunder will be paid in spring 2025.

The aggregate maximum number of shares to be paid based on RSP 2022-2024 is approximately 368,000 shares (referring to gross earning before the withholding of the applicable payroll tax).

Restricted Share Plan 2021-2023

In December 2020, the Board of Directors decided to commence a new plan period for the complementary Restricted Share Plan. The share rewards potentially granted thereunder will be paid in spring 2024.

The aggregate maximum number of shares to be paid based on RSP 2021-2023 is approximately 280,000 shares (referring to gross earning before the withholding of the applicable payroll tax).