Stora Enso aims to provide a level of remuneration that motivates, encourages, attracts and retains employees of the highest calibre. To maximise the effectiveness of remuneration within Stora Enso, careful consideration is taken to ensure the remuneration elements drive the business strategy of the company and its long-term financial interests.
The Remuneration Policy describes Stora Enso’s main principles and the decision-making process of remuneration for the members of the Board, President and Chief Executive Officer (CEO) and Deputy CEO, and the remuneration elements for them.
Remuneration in the past year is described in detail in the Remuneration Report. It includes the main principles of Stora Enso’s remuneration for the members of the Board of Directors, President and CEO, and Deputy CEO, its remuneration decision-making procedure; a description of Stora Enso’s current policy and details of how remuneration arrangements were implemented during the year.
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Remuneration of the Board is decided annually by the shareholders at the AGM or a possible extraordinary shareholders’ meeting. The remuneration of the members of the Board may depend on their respective roles as Chair, Vice Chair, and Members of the Board or its committees.
The AGM in 2024 approved the proposal by the Shareholders' Nomination Board on the annual remuneration for the Board of Directors as follows:
Chair EUR 215,270 (2023: 209,000)
Vice Chair EUR 121,540 (2023: 118,000)
Members EUR 83,430 (2023: 81,000)
The AGM also approved the proposal that the annual remuneration for the members of the Board of Directors, be paid in Company shares and cash so that 40% will be paid in Stora Enso R shares and the rest in cash.
The AGM approved the annual remuneration for the Board committees as follows:
Financial and Audit Committee
Chair EUR 23,278 (2023: 22,600)
Members EUR 16,377 (2023: 15,900)
People and Culture Committee (previously Remuneration Committee)
Chair EUR 11,639 (2023: 11,300)
Members EUR 7,004 (2023: 6,800)
Sustainability and Ethics Committee
Chair EUR 11,639 (2023: 11,300)
Members EUR 7,004 (2023: 6,800)
More information about the remuneration of the Board of Directors is presented in the Remuneration Report.
The total remuneration to the President and CEO consists of annual base salary, variable pay components as short-term incentives (cash) and long-term incentives (shares), long-term benefits (pension, medical and health benefits), and other benefits (car, housing, etc.).
The compensation for the new President and CEO Hans Sohlström, appointed on 18 September 2023, is presented in the table below.
| Annual base salary | EUR 1,000,000 from 18 September 2023 (EUR 289,613 paid in 2023). |
|---|---|
| Short-term incentive | As of 18 September 2023 for the next 12 + 12 months, the CEO is entitled to an STI programme with a maximum opportunity of 100% of the annual fixed salary. |
| Long-term incentive | As of 18 September 2023 there is a two-year CEO Performance Plan initiated with vesting date in Q4/2025. The CEO has the potential to receive a value corresponding to a maximum of 169,420 shares before taxes. The performance targets are related to balance sheet, capital expenditure, strategy and sustainability. The CEO is not eligible to participate in LTI 2023-25 or other potential LTI programmes starting during 2024. |
| Other benefits | All benefits are included in the annual base salary. |
| Pension | The retirement age and pension according to Finnish statutory pension plan. Pension contributions amounted to EUR 48,000 during 2023. |
| Termination of assignment | There is 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. |
| Total remuneration | Total remuneration earned (paid) in 2023 amounted to EUR 338,000. |
| Earned proportion of fixed to variable remuneration | Fixed compensation 100% |
| Share ownership guideline | The company recommends and expects the CEO and GLT members to hold Stora Enso shares at a value corresponding to at least one annual base salary. Stora Enso shares received as remuneration are therefore recommended not to be sold until this level has been reached. |
Former CEO's remuneration in 2023
The former President and CEO Annica Bresky left her position at Stora Enso on 18 September 2023.
| Annual base salary | Former CEO Annica Bresky: EUR 1,006,809 as of 1 April 2023 (EUR 668,516 paid in 2023). |
|---|---|
| Short-term incentive | In 2023, the CEO was entitled to an STI programme with a maximum opportunity of 100% of the annual fixed salary. Earned STI related to 2022, paid in 2023, amounted to 88.1% of the annual salary, with a corresponding value of EUR 845,000. |
| Long-term incentive | The former CEO Annica Bresky participated in 2020, 2021 and 2022 share based LTI programmes. The 2020 LTI programme (performance period 2020–2022), was paid in 2023. The programme resulted in a 100% performance outcome with a corresponding value of EUR 987,0001. The performance criteria included Economic Value Added (EVA) and Earnings per Share (EPS). |
| Other benefits | Benefits include holiday pay, mobile phone, car, and insurance amounted to EUR 26,000 in 2023. |
| Pension | The retirement age is 65. The President and CEO’s pension plan consisted of a defined contribution pension plan with contributions of 30% of pensionable salary. Pension contributions amounted to EUR 428,000 during 2023. |
| Termination of assignment | There is 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. |
| Severance payment | EUR 933,000 payable in 2024 |
| Total remuneration | Total remuneration earned (paid) in 2023 amounted to EUR 2,955,0003 (2,110,000 in 2022). |
| Earned proportion of fixed to variable remuneration | The proportion of fixed compensation earned was 38% (69% in 2022), while the proportion of variable compensation earned was 62% (31% in 2022). |
For more information about President and CEO remuneration, please see the Remuneration Report.
| Total compensation | EUR 8,548,000 in 2023 (EUR 12,178,000 in 2022) |
|---|---|
| Short term incentive (STI) programmes | In 2023, GLT members have STI programmes with up to a maximum of 70% or 80% of their annual fixed salary, payable the year after the performance period. 80–100% of the STI for 2023 was based on financial measures and 0–20% on individual strategic key targets. |
| Long term incentive (LTI) programmes for management | At the end of 2023, the performance period for the 2021 programme ended, and will be settled in one portion after three years in March 2024, dependent on Economic Value Added (EVA) for the Stora Enso Group and Earnings Per Share (EPS) for the Stora Enso Group. The Performance Share programme resulted in a 89% performance outcome. The number of shares due for executives (GLT members at year end) from programmes that ended during 2023 amounted to 115,580 shares. |
| Share ownership guideline | The company recommends and expects the CEO and GLT members to hold Stora Enso shares at a value corresponding to at least one annual base salary. Stora Enso shares received as remuneration are therefore recommended not to be sold until this level has been reached. |
| Pension | In accordance with their respective pension arrangements, GLT members may retire at sixty-five years of age with pensions consistent with local practices in their respective home countries. Contracts of employment provide for six months’ notice prior to termination with severance |