The Board of Directors decides on the Group CEO’s remuneration and other terms of the service relationship. The remuneration of the Group CEO is evaluated annually and is based on the Remuneration Policy for Governing Bodies and the remuneration principles applied by the company.
Mandatum plc's Remuneration Policy for Governing Bodies
The remuneration of the Group CEO includes a fixed salary, benefits (fringe benefits and other benefits) and possible short- and long-term incentives. Furthermore, the Group CEO has a defined contribution pension plan. More detailed information on the remuneration of the Group CEO in 2023 is presented in the Remuneration Report for Governing Bodies.
The Group CEO is paid a fixed monthly salary, which is compensation for the responsibilities of the job based on the demand level, taking into account the Group CEO’s experience in the job and the market practices for remuneration. In addition, when determining the fixed salary level, the Group CEO’s supplementary pension agreement has been taken into consideration, and market data consisting of the remuneration of CEOs in peer companies in the financial sector has been examined.
The monthly fixed salary paid to the Group CEO, Petri Niemisvirta, is EUR 32,500 as of 1 October 2023. In addition to the monthly salary, the Group CEO is entitled to fringe benefits (such as phone and meal benefit) and other financial benefits (such as health, travel and accident insurance). Fringe benefits are processed in the salary in accordance with the company's general practice.
The Group CEO is entitled to reimbursement of travel costs in line with the company’s travel policy.
The Board of Directors decides on one-year short-term incentive programs separately each year and the cash payouts the following year. The Group CEO participates in a one-year short-term incentive program where the payout is based on financial and non-financial performance criteria. In 2024, the Group CEO's targets in the short-term incentive program consist of Mandatum Group's key targets and results as well as qualitative metrics of the business. A threshold level has been set for the payments from the program.
The maximum amount that can be paid to the Group CEO from the short-term incentive program corresponds to 12 months' fixed salary. Part of the payout shall be deferred for at least three (3) years as required in the regulatory framework applicable to Mandatum.
The Group CEO may transfer part of the short-term incentive payout to the personnel fund under the same terms as for Mandatum personnel.
The Board of Directors decides on long-term incentive schemes and the share payouts from the schemes. The Board of Directors of Mandatum plc has on 19.3.2024 decided to establish a new performance- and share-based long-term incentive scheme in which the Group CEO participates. In addition, the Group CEO was previously a member of Sampo Group Executive Committee and therefore participates in the long-term incentive scheme 2020:1 for Sampo Group’s key employees, to which the Group CEO was invited to participate in 2020.
More information on the long-term incentive scheme and the Group CEO's shares in them can be found here on the website.
In addition to Finland’s statutory pension system, the Group CEO is entitled to a supplementary defined contribution pension plan, which commences at the age of 63. The premium paid by the company into the supplementary pension plan in 2023 was EUR 62,500. The payment for the year 2023 was based on the earning period from 1 October to 31 December 2023. The premium will be increased annually in accordance with the index specified in the agreement.
The notice period for terminating the service contract of the Group CEO is six months for the company, and three months when the Group CEO terminates the contract. Salary shall be paid during the notice period.
The company is also entitled to terminate the service contract immediately without a notice period so that the salary for the notice period is paid to the Group CEO as a lump-sum compensation. If the company has a weighty cause to cancel the service contract as stipulated in the Employment Contracts Act, chapter 8, section 1, the service contract can be terminated with immediate effect without a period of notice. In this case, no salary for the notice period or other severance compensation shall be paid.
If the service contract is terminated by the company without a reason that constitutes grounds for cancellation as stipulated in the Employment Contracts Act, chapter 8, section 1, the Group CEO shall be paid a compensation corresponding to 18 months’ fixed monthly salary in addition to the salary for the notice period.
The employment contract of the Group CEO ends without notice when the Group CEO turns 63.