Remuneration of CEO - Jouko Karvinen 

Remuneration and pension in 2010

* The CEO previous housing allowance was, as of 1 March 2010, converted to basic salary and is as of then included in the amount under annual salary.
** The Short Term Incentive result for performance year in 2008 and 2009 (originally payable 2009 and 2010) was converted to Restricted Share Awards and deferred one to three years.
*** The Long Term Incentive 2010, includes settlement of deferred Short Term Incentive from performance year in 2007 and 2008.

The CEO has been employed since 1 January 2007 and took office following the 2007 Annual General Meeting on 29 March 2007. His contract was approved by the Board on his appointment. It has a notice period of six months with a severance payment of twelve months salary on termination by the Company but with no contractual payments on any change of control. Benefits include a car allowance and pension provision under a Company defined contribution plan that has acceptance from the UK Inland Revenue (RPS).
During 2010 a complementary scheme was introduced (EFRBS). Both schemes are
defined contribution: the pension depends on the contribution paid and the investment result. The Company and CEO contribute to both schemes in total a fixed contribution of 40% of the CEO’s basic salary, of which the Company contributes 35% of the basic salary and the CEO contributes 5% of the basic salary. An additional pension contribution was made in 2007 as compensation for pension benefits lost by the CEO on leaving his former employment. The CEO retires at sixty.

Short Term Incentive (STI) programme for CEO
The CEO is entitled to a STI programme decided by the Board each year giving a maximum of 75% of annual fixed salary. The STI for 2010 was based 70% on financial measures and 30% on Individual Key Targets. The 2010 deferred payout, relating to performance year
2009, to be delivered in shares (restricted shares) in March 2011 was EUR 404 505.

Option programmes for CEO
No options have been awarded since year 2007. In 2007 the CEO was granted 157 646 options on joining Stora Enso with the estimated value at the grant date of 2 January 2007 as calculated by the option pricing model being EUR 365 000. During 2010 the CEO did not exercise any of these options.

Long Term Incentive (LTI) programmes for CEO
The CEO participates in a number of share based LTI programmes. As of 2007 the CEO participates in the Senior Executive section of the Performance Share Plan. The shares granted under this programme will vest over a four-year period (2009-2012). Vesting date is 1 March each year. The CEO received an Award under the Performance Share Plan 2010 of 80 000 shares with the valuation at the grant date of 1 March 2010 being EUR 369 600 based on the share price at the grant date of EUR 4.62 and assuming targets will be met. All programmes can vest up to an absolute maximum vesting level of 150% of the number of shares awarded provided that the result of the performance criteria exceeds the target. The performance criteria for 2010 was based solely on financial measures.

During the year the number of shares settled on the CEO from earlier awards derived from Restricted Share Programmes and Performance Share Programmes amounted to 66 913 having a cash value of EUR 309 138 at the 1 March 2010 settlement date based on the share price of EUR 4.62 at that date.

The CEO did not receive any new Restricted Share Award other than the 2010 deferred STI payout, relating to performance year 2009 (described on page 65). The aggregated number of outstanding shares derived from restricted share programmes of previous years to be
settled in 2011 is 108 946. The corresponding number to be settled in 2012 is 9 415.

The CEO has a cap on total variable pay components that will be applicable for STI and LTI payments made in 2013 and onwards, i.e. should the aggregated outcome of STI and LTI exceed 100% of the CEO’s annual basic salary the LTI outcome will then be reduced
accordingly.

The Company has no formal policy requirements for the CEO or other executives to retain shares received as remuneration.