The Board of Directors is responsible for deciding the terms of employment and remuneration of the Company’s President and CEO, together with the remuneration principles observed in respect of senior management. The Personnel and Remuneration Committee is responsible for making proposals in this area and for monitoring and evaluating the performance of the President and CEO and top management.
The terms of service contract of President and CEO Peter Vanacker
|Salary and fringe benefits||A base salary, including fringe benefits, of EUR 75,020 per month.|
|Short-term incentive program (STI)||The annual short-term incentive based on performance is equivalent to a maximum of 40% of the President and CEO’s annual salary including fringe benefits. The Board sets targets and earning criteria annually.|
|Long-term share-based incentive program (LTI)||
The President and CEO is entitled to participate in the long-term incentive plan approved in 2015. The combined maximum amount of performance-based incentives in the program approved in 2015 and started in 2016 cannot exceed 120% of a person’s fixed annual salary, and the maximum amount payable annually under the short-term incentive program is 40% of a person’s fixed salary.
The retirement age of the President and CEO is according to the Finnish Employee’s Pension Act (TyEL).
Both parties have a six-month period of notice. Should the Company terminate the President and CEO’s agreement, the Company is required to pay six month’s salary and a separate severance pay equivalent to six month’s salary.
Agreements and pension arrangements for the other members of Neste Executive Board
Neste Executive Board members are paid a base salary and are entitled to fringe benefits. In addition, they can receive annual short-term performance-based remuneration equivalent to a maximum 40% of their annual salary including fringe benefits. Their director agreements specify a typical termination period of six months and possibly six months of severance pay.
The members of the Neste Executive Board come within the scope of the Finnish national pension and supplementary pension system. Pensionable age is 60, 62, 63 or according to the Finnish pension legislation. Under the terms of the oldest defined benefit plans, pensions can be a maximum of 60% of a person’s pensionable salary. Pensions are calculated on the basis of the average annual monthly salary paid in accordance with the Finnish national pension system during the 10 years preceding retirement. Neste's Board of Directors has outlined that newer supplementary pension plans agreed after 1 January 2009 take the form of defined contribution plans. Director agreements agreed after 1 January 2009 specify a retirement age of 62, director agreements agreed after 1 July 2012 a retirement age of 63 and director agreements agreed after 1 January 2016 retirement age according to the Finnish pension legislation.
Both defined benefit and contribution plans are insured by a pension company.