Remuneration at Terveystalo is based on the principles of performance, fairness and competitiveness. These remuneration principles apply to all Terveystalo employees and the purpose is to ensure that Terveystalo as an employer attracts motivated and competent professionals. Remuneration shall support the achievement of Terveystalo´s strategic goals, align management’s priorities with the interests of Terveystalo´s shareholders, encourage behavior consistent with Terveystalo’s values, and reward excellent performance.
Remuneration decision-making process
The Company’s Annual General Meeting decides on the remuneration of the members of the Board of Directors each year. The Remuneration Committee of the Board of Directors prepares remuneration-related matters and proposals regarding the CEO and the Executive team for the Board. The Board of Directors approves the remuneration of the CEO and the other Executive team members. Terveystalo’s remuneration policy describes the decision-making procedure in more detail.
Short-term incentive scheme (STI)
Terveystalo’s Board of Directors decides on the targets related to the short-term incentive schemes for the CEO and other members of the Executive Team. For 2022, the STI performance targets for the CEO were based on the Company’s adjusted EBITA and eNPS. In addition to these measures, she STI performance targets for the other members of the Executive Team were based on business specific targets.
For 2023, the STI performance targets for the CEO and the other members of the Executive Team are based on the Company’s adjusted EBITA and profit improvement program, as well as eNPS and business specific targets.
The maximum STI payable to the CEO is equivalent to 120 % of the annual base salary. The STI payable to the other members of the Executive Team for achieving the set targets is equivalent to five months’ salary, and the STI payable for exceeding the set targets to an exceptional extent is equivalent to at most 7.5 months’ salary.
Long-term incentive scheme (LTI)
The long-term incentive scheme is based on a rolling 3-year plan structure, with a new plan starting at the beginning of each year if so decided by the Board. The Board decides on the participants, performance measures and targets as well as earning opportunities on an annual basis. The purpose of the program is to align the objectives of shareholders and key personnel to increase the company's value in the long term, and to commit key personnel to implementing Terveystalo's strategy by offering them a competitive, share-based incentive program.
Remuneration of the Board of Directors
Terveystalo’s Annual General Meeting, held on April 7, 2022, resolved in accordance with the proposal of the Shareholders’ Nomination Board that the Chair of the Board of Directors be paid an annual remuneration of EUR 87,500, the Vice Chair an annual remuneration of EUR 52,000, the members an annual remuneration of EUR 41,500, and the Chair of the Audit Committee EUR 52,000. In addition, an attendance fee of EUR 650 will be paid for members of the Board of Directors and Committee members residing in Finland, EUR 1,350 for members residing elsewhere in Europe, and EUR 2,700 for members residing outside of Europe for each Board and Committee meeting that they attend. For Board and Committee meetings that are held by telephone or other electronic means, the attendance fee is EUR 650. Travel costs are reimbursed based on the company’s travel policy. The annual remuneration of the Board is paid as a combination of company shares (40%) and cash (60%). The Company will reimburse the transaction costs and capital transfer tax related to trading. Attendance fees are paid in cash.
Remuneration of the CEO
The fixed remuneration of the CEO consists of a fixed monthly salary and fringe benefits. The total remuneration of the CEO includes short-term incentives and long-term incentives. Remuneration of the CEO, as well as other key terms applicable to the service contract, are described in more detail in Terveystalo’s remuneration report.
Remuneration of the other members of the Executive Team
The fixed remuneration of the Executive team members consists of a fixed monthly salary and fringe benefits. Executive team members are also entitled to holiday bonus. The total remuneration of the Executive Team members includes short-term incentives and long-term incentives.