Our approach to remuneration
The four guiding principles that underpin the remuneration programs across the Company are:
• Ensure the execution of Neste’s strategy: Neste aims to chart a clear path forward by executing its strategy and sharing its business objectives.
• Drive performance and value based behavior: Neste aims to drive results by rewarding excellence, development and value based behavior.
• Encourage individual and team accountability: Neste promotes clear targets and a focus on continuous performance improvement. Neste enables this by maintaining an ongoing dialogue with employees and by encouraging employee feedback.
• Be fair and transparent: Neste runs performance and total rewards processes ethically and with integrity, and supports this with clear communication.
Remuneration principles for the Neste Executive Committee and senior management
Based on proposals submitted by the Personnel and Remuneration Committee, the Board takes into account the following objectives in determining the remuneration for the ExCo and senior managers:
• Rewards should be appropriate to attract and retain senior management with the requisite skills and experience to ensure that Neste meets its strategic goals, but remuneration also has to make financial sense from the company’s point of view to maintain its competitive cost structure.
• To operate effectively in a global context, remuneration should be fair and competitive within the international markets Neste operates in. Salaries and other components of pay should be based on local market conditions and be sufficient to attract key management talent.
• Remuneration should maintain appropriate proportions of fixed and performance-related pay to help to drive performance and sustainable results over the short-and long-term, to maintain a flexible cost base, and to avoid creating incentives for excessive risk-taking.
• In support of Neste’s pay for performance approach, senior managers should be rewarded for value-based behavior and achievement of challenging strategic, operational and financial targets.
• Senior management interests should align with those of Neste and its broad base of domestic and international shareholders/ stakeholders.
• The senior management remuneration policy should be consistent with the global pay principles applied to Neste employees worldwide.
• Neste will always endeavor to treat senior managers and key personnel equally and impartially, regardless of their gender, nationality, age, religious beliefs, political opinions, or other similar factors.
• Remuneration is set according to the “grandparent principle” whereby the pay of any individual is subject to the approval of a manager’s manager. No individual may decide or participate in decision-making in matters relating to their own remuneration.