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Rapala VMC Oyj Remuneration Information 2024
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Remuneration Information
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REMUNERATION REPORT
CONTENTS
2 | RAPALA VMC CORPORATION
| REMUNERATION REPORT 3 | |
|---|---|
| DEVELOPMENT OF FINANCIAL PERFORMANCE | |
| AND REMUNERATION 4 | |
| REMUNERATION IN 2023 6 |
REMUNERATION REPORT
INTRODUCTION
This Remuneration Report sets out how Rapala VMC Corporation (hereinafter the "Rapala VMC" or the "Company") has in 2023 implemented its Remuneration Policy adopted in Rapala VMC's General Meeting on March 26, 2020.
The report includes information concerning the remuneration of the Board of Directors, the President and CEO(s) and the Deputy CEO during the financial year 2023 along with historical development of the same during the last five years.
The Report has been reviewed by the Remuneration Committee of Rapala VMC's Board of Directors and approved by the Board of Directors on 7th of March, 2024. Further Rapala VMC's auditor Ernst & Young Oy has audited this Report confirming it fulfils the requirements set in law, the Decree 608/2019 of the Ministry of Finance and the Corporate Governance Code 2020 of Finnish Securities Market Association.
The Annual General Meeting 2024 makes a consultative decision as to whether it approves this Remuneration Report. In the previous Annual General Meeting 2023 74.40% of all shares and votes in the Company participated in the advisory vote and 19.45% of those voted against accepting the provided remuneration report.
This Remuneration Report along with additional information regarding the remuneration in Rapala VMC are available on Rapala VMC's website at www.rapalavmc.com.
OVERVIEW OF THE REMUNERATION IN 2023
In line with the Remuneration Policy, remuneration in 2023 has aimed to contribute to positive development of shareholder value, enhance competitiveness and long-term financial success and the fulfilment of the Company's strategy. Remuneration is integral to Rapala-VMC Corporation's long-term financial success, incentivizing top talent and aligning their goals with the company's vision. The 2023 remuneration emphasizes fair compensation practices based on performance and value creation. This approach fosters innovation, operational excellence, and accountability throughout the organization, ensuring sustained growth and competitive advantage for Rapala VMC in the market.
The remuneration of the members of the Board of Directors consisted of fixed annual fees and meeting fees. Paid fees are disclosed under the section "Remuneration of the Board of Directors".
Rapala VMC announced the change of President and CEO on April 4, 2023. Lars Ollberg succeeded Louis d'Alançon, who acted as the interim President and CEO since November 16, 2022. The Company also announced the appointment of Cyrille Viellard as the Deputy CEO on April 4, 2023.
The remuneration of the President and CEO(s) and the Deputy CEO consisted of base salary, benefits and variable remuneration. A more detailed disclosure of the remuneration and the basis for variable remuneration can be found under the section "Remuneration of the President and CEO(s) and Deputy CEO".
According to the Remuneration Policy of the Company, the Company may deviate from the Remuneration Policy if such deviation is considered necessary to ensure the long-term interests of the Company. The Board resolved to temporarily deviate from the Remuneration Policy concerning the remuneration of interim President and CEO Louis d'Alançon. Further information on the deviation can be found under the section "Remuneration of the President and CEO(s) and Deputy CEO".
DEVELOPMENT OF FINANCIAL PERFORMANCE AND REMUNERATION 2019-2023
NET SALES, € million
COMPARABLE EBIT, € million
ROCE, %
SHARE PRICE DEVELOPMENT 2019-2023, €*
* Dividends per share 0,04 € in total in 2023
DEVELOPMENT OF REMUNERATION 2019-2023
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Board | |||||
| Chairman ann. Fee | 80 000 | 80 000 | 80 000 | 80 000 | 80 000 |
| Development | 0% | 0% | 0% | 0% | 0% |
| Board member ann. fee | 30 000 | 30 000 | 30 000 | 30 000 | 30 000 |
| Development | 0% | 0% | 0% | 0% | 0% |
| President and CEO | |||||
| Base salary + benefits* | 287 6971 | 292 8972 | 359 378 | 403 1403 | 314 7274 |
| Short-term incentive (STI) | 133 925 | - | 230 000 | 240 000 | 40 333 |
| Long-term incentive (LTI) | - | - | - | - | - |
| Total compensation | 421 622 | 292 897 | 589 378 | 643 140 | 355 060 |
| Development | |||||
| Base salary + benefits | 2% | 2% | 23% | 12% | -22% |
| Total compensation | 23% | -31% | 101% | 9% | - 45% |
| Deputy CEO | |||||
| Base salary + benefits** | N/A | N/A | N/A | N/A | 175 4885 |
| Short-term incentive (STI) | N/A | N/A | N/A | N/A | 15 7505 |
| Long-term incentive (LTI) | N/A | N/A | N/A | N/A | - |
| Total compensation | N/A | N/A | N/A | N/A | 191 2385 |
| Development | N/A | N/A | N/A | N/A | |
| Base salary + benefits | N/A | N/A | N/A | N/A | N/A |
| Total compensation | N/A | N/A | N/A | N/A | N/A |
| Average employee | |||||
| Total salary *** (kEUR) | 66 836 | 65 054 | 71 466 | 71 420 | 61 587 |
| Avg. number of employees | 1 631 | 1 595 | 1 763 | 1 703 | 1 436 |
| Average salary cost | 41 000 | 41 000 | 41 000 | 42 000 | 43 000 |
| Development | 4% | 0% | -1% | 3% | 2% |
* Including possible supplementary pension policies
** Including possible supplementary pension policies
*** Excluding Indonesia manufacturing unit discontinued at the end of 2020
1 In 2019, 235 897 € was paid to Jussi Ristimäki and 51 800 € to Louis d'Alançon
2 In 2020, 61 323 € was paid to Louis d'Alançon and 231 273 € to Nicolas Cederström Warchalowski
3 In 2022, 370 900 € was paid to Nicolas Cederström Warchalowski and 32 240 € to Louis d'Alançon
4 in 2023, 86 300 € was paid to Louis d'Alançon from January 1st to April 30th and 228 427 to Lars Ollberg from May 1st to December 31st
5 Compensation paid during the full financial year.
REMUNERATION IN 2023
REMUNERATION OF THE BOARD OF DIRECTORS
Shareholders resolved on the Board remuneration in the Annual General Meeting of 2023 as follows.
Annual Fees:
- 80 000 € for chairman and
- 30 000 € for members.
Meeting Fees (board & committee meetings):
■ 1 000 € per meeting
FEES PAID TO THE BOARD DURING CALENDAR YEAR 2023
| € | Annual Fee, EUR | Board Meeting Fees, EUR | Committee Meeting Fees, EUR | Total Remuneration |
|---|---|---|---|---|
| Louis d'Alançon (chair) | 46 667 | 5 000 | - | 51 667 |
| Jorma Kasslin | 30 000 | 10 000 | 2 000 | 42 000 |
| Emmanuel Viellard | 30 000 | 10 000 | 2 000 | 42 000 |
| Marc Speeckaert (until 29.3.2023) | - | 7 000 | 1 000 | 8 000 |
| Alexander Rosenlew (as of 29.3.2023) | 30 000 | 3 000 | - | 33 000 |
| Julia Aubertin | 30 000 | 10 000 | - | 40 000 |
| Vesa Luhtanen | 30 000 | 10 000 | 1 000 | 41 000 |
| Total | 252 667 |
tive programs.
REMUNERATION OF THE PRESIDENT AND CEO(S) & DEPUTY CEO
INTRODUCTION
During the financial year 2023, Rapala VMC was led by two President and CEO(s). Louis d'Alançon acted as the interim President and CEO from November 16, 2022 up to the appointment of Lars Ollberg as the President and CEO of Rapala VMC on May 1, 2023. The Company also announced the appointment of Cyrille Viellard as the Deputy CEO of the Company on April 4, 2023.
As stated in the Remuneration Policy, the remuneration of the President and CEO and Deputy CEO may comprise base salary and benefits as well as variable remuneration components, such as short-term incentives and long-term incentives.
During 2023, the remuneration of the President and CEO's comprised of base salary, benefits and a short-term incentive. The Deputy CEO's remuneration comprised of base salary, benefits, a short-term incentive and a long-term incentive.
President and CEO Lars Ollberg was paid a total remuneration of EUR 228 427, including base salary and benefits. The interim President and CEO Louis d'Alançon was paid a total remuneration of EUR 126 633, including base salary, benefits and a short-term incentive bonus. The Deputy CEO was paid a total remuneration of EUR 191 238, including base salary, benefits and a short-term incentive bonus based on the financial year 2022. Neither the President and CEO nor the Deputy CEO are entitled to supplementary pensions.
SHORT-TERM INCENTIVES
of the President & Deputy CEO" below.
According to the Rapala VMC Remuneration Policy, President and CEO's short-term incentive plan may be based on the result of the Group or other criteria decided by the Board.
Board Remuneration is paid fully in cash and does not include pension payments or reimbursement for expenses. Members of the Board of Direc-tors are not included in Rapala VMC's short- or long-term incen-
Chairman of the Board Louis d'Alançon acted as the interim President and CEO of Rapala VMC until April 30, 2023. As he was in a service relation-ship with the Company, he was not entitled to board fees during his tenure as the President and CEO. Remuneration for him for the role of Presi-dent and CEO has been reported in the section "Remuneration
During 2023, the President and CEO Lars Ollberg and the Deputy CEO Cyrille Viellard participated in the Company's performance-based shortterm incentive plan (STI 2023). For the President and CEO, the rewards were based on financial and strategy related criteria. The Deputy CEO's criteria additionally included business unit related performance criteria. The maximum remuneration payable to the President and CEO under the STI 2023 was EUR 191 667 and for the Deputy CEO EUR 175 000.
The achievement of the criteria for the President and CEO was 51%, corresponding to a pay-out of EUR 98 229. The achievement of the criteria for the Deputy CEO was 39%, corresponding to a pay-out of EUR 67 445. The rewards from STI 2023 will be paid during the financial year 2024.
During 2023, the Deputy CEO Cyrille Viellard was paid a bonus of EUR 15 750 based on the short-term incentive from 2022. The bonus was based on a period preceding his appointment as the Deputy CEO.
During 2023 it was noted, that Louis d'Alançon's foregoing loss of board fees was not taken into account when determining his salary and thus his salary as the President and CEO was set too low. As a result, the Board of Directors agreed to award d'Alançon a bonus of EUR 40 333. The amount of bonus corresponded to the board fees he for-feited during his tenure as the interim President and CEO of the Com-pany. The bonus was paid in connection with the payment of board fees, on July 17, 2023.
SHORT-TERM INCENTIVES 2023
| Criteria | Weight | Achievement | Total outcome | Max. reward | Earned reward | Payment year | ||
|---|---|---|---|---|---|---|---|---|
| Net Sales | 15% | 0% | 191 667 € | 98 229 € | 2024 | |||
| Group Results | Comparable EBIT | 30% | 0% | 51% | ||||
| President and CEO | Average Inventory | 15% | 75% | |||||
| Strategy execution | 40% | 100% | ||||||
| Deputy CEO* | Group Results | Net Sales | 7% | 0% | 39% | 175 000 € | 67 445 € | 2024 |
| Comparable EBIT | 7% | 0% | ||||||
| Average Inventory | 7% | 50% | ||||||
| Strategy execution | 20% | 25% | ||||||
| BU/Regional Performance |
Net Sales | 13% | 0% | |||||
| E2E Gross Profit | 26% | 100% | ||||||
| Free Cash Flow | 13% | 18% | ||||||
| Average Inventory | 7% | 0% | ||||||
| Strategy execution | 30% | % |
* Short-term incentive concerning full financial year, including pre-Deputy CEO nomination criteria.
LONG-TERM INCENTIVES
According to the Remuneration Policy the objectives of the Company's long-term incentive plans are to achieve the targets and strategy set by the Company and to promote the Company's long-term financial success and competitiveness.
President and CEO or the Deputy CEO did not participate in the Company's long-term incentive plans during 2023.
The Deputy CEO participated in the Key Employees Performance Share Plan 2021-2023 (PSP 2021-2023), which consisted of one performance period, covering the financial years 2021-2023. The aim of the PSP 2021- 2023 was to align the objectives of the shareholders and the participants for increasing the value of the company in the long-term, to retain the participants at the company and to offer them competitive incentive schemes that are based on earning and accumulating shares.
The Deputy CEO's allocation corresponded to a value of an approximate maximum total of 42 500 Rapala VMC shares (including the proportion to be paid in cash to cover tax withholding). The performance criteria were based on the Rapala VMC's Group Product Sales, Comparable EBIT and Average Working Capital to sales ratio in financial year 2023, and the Company's average share price during a measurement period of any forty (40) consecutive trading days during 2023.
The achievement of the performance criteria for the Deputy CEO was 10.7%, corresponding to a pay-out of equivalent to 4 548 shares (approximately EUR 13 644 based on the share price on December 30, 2023, effective share price to be confirmed based on the plan terms). The reward will be paid during the financial year 2024.
LTI
| Criteria | Weight | Achievement | Total | Max. Allocated shares | Earned shares | Payment | ||
|---|---|---|---|---|---|---|---|---|
| outcome | Deputy CEO (gross) | Deputy CEO (gross) | year | |||||
| Share Price 20% 0% |
||||||||
| PSP 2021-2023 | Financial Performance |
Group Product Sales | 20% | 40% | 10.7% | 42 500 | 4 548 | 2024 |
| Comparable EBIT | 20% | 0% | ||||||
| Average Working Capital |
20% | 0% |
TOTAL PAID REMUNERATION 2023
| Base Salary + Benefits | Short-term Incentive | Long-term Incentive | Total Paid Compensation | |
|---|---|---|---|---|
| Lars Ollberg | ||||
| President and CEO 1 May 2023 - |
228 427 € | - | - | 228 427 € |
| Proportional Share | 100% | 0% | 0% | |
| Louis d'Alançon | ||||
| Interim President and CEO 16 November 2022 - 3 April 2023 |
86 300 € | 40 333 € | - | 126 633 € |
| Proportional Share | 68% | 32% | 0% | |
| Cyrille Viellard | ||||
| Deputy CEO 4 April 2023 - |
175 488 € | 15 750 € | - | 191 238 € |
| Proportional Share | 92% | 8% | 0% |
