
At Metso we support, develop and encourage our people as individuals and as team members to perform and help us to achieve our vision and targets through successful execution of our strategy. This can be accomplished with excellent performance of our motivated, innovative and customer-oriented people. Total remuneration structures may vary by country and are aligned with the interests of Metso and with internal and external references. We monitor remuneration levels for similar positions among peer companies.
Decision-making process for remuneration at Metso
Decisions on remuneration related matters at Metso follow clear governance. The process for remuneration is designed to ensure fairness and transparency by involving multiple governing bodies, each with distinct roles and responsibilities.
Remuneration policy
Remuneration policy for Metso, approved in Metso’s Annual General Meeting on April 25, 2024, describes remuneration principles and framework for the President and CEO and for the members of the Board of Directors of Metso. The remuneration policy will also be applied to any deputy CEO should such deputy be appointed.
Remuneration policy is in line with Metso’s remuneration principles, Finnish Corporate Governance Code 2025 issued by Finnish Securities Market Association, and the requirements set forth by the amended EU Shareholders’ Rights Directive, which has been implemented in Finland mainly into the Limited Liability Companies Act, Securities Markets Act, Decree of the Ministry of Finance.
Remuneration report
Metso’s remuneration report is developed in line with the Finnish Corporate Governance Code 2025 issued by the Securities Market Association. Remuneration report is a way for Metso to transparently and openly illustrate how the Board of Directors and President and CEO were rewarded during the reporting period.
The Annual General Meeting decides on the remuneration to the members of the Metso Board for one term of office at a time.
The Annual General Meeting 2025 confirmed the annual remunerations to the Board members as follows:
Board remuneration |
EUR |
Chair |
176,500 |
Vice Chair |
88,300 |
Other Members |
71,500 |
Committee memberships (additional fee) |
|
Chair of Audit and Risk Committee |
26,300 |
Member of Audit and Risk Committee |
10,850 |
Chair of Remuneration and HR Committee |
13,200 |
Member of Remuneration and HR Committee |
5,430 |
Meeting fees (including committee meetings) |
|
Meetings requiring travel within the Nordic countries |
900 |
Meetings requiring travel within continent |
1,800 |
Meetings requiring intercontinental travel |
3,000 |
Meetings with remote attendance |
900 |
The Board members of Metso could choose to receive either 40% or 20% of their annual fixed fee in shares of Metso. Board members shall be reimbursed the direct costs arising from the board work.
A condition for receiving the annual remuneration is that Board members are obliged, based directly on the AGM’s decision, to use 20 or 40 percent of their annual fixed fee for the purchase of Metso’s shares from the market at a price formed in public trading.
Remuneration and employment terms of Metso’s President and CEO Sami Takaluoma
The remuneration paid to the President and CEO is determined by the Metso Board. Metso’s President and CEO is entitled to participate in short- and long-term incentive programs. The terms and conditions of these programs are decided by the Board.
Annual Salary |
EUR 840,000 including fringe benefits |
Short-term inventive (annual performance bonus) |
The maximum bonus is 100% of the total annual salary. |
Long-term incentive |
The maximum share allocation corresponds to 200% of the total annual salary and the maximum payable reward can correspond to 350% of total annual salary. |
Pension |
The retirement age is according to Finnish statutory pension system. In addition, the President and CEO is entitled to participate in a supplementary defined contribution pension plan. The supplementary pension contribution is equivalent to 20% of the annual salary. |
Termination of assignment |
The notice period for both parties is six (6) months. Severance pay is the full monthly salary multiplied by twelve (12) if the agreement is terminated by the company. |
Remuneration for Leadership Team members
The Board’s Remuneration and HR Committee reviews the compensation and benefits of the other Leadership Team members based on the President and CEO’s proposal. The total remuneration comprises a total annual salary, customary fringe benefits, pension as well as short and long-term incentives.
Participation in variable incentive programs is based on the respective terms and conditions of the program. The Board evaluates the achievement of the targets for the Leadership Team members. Metso’s Leadership Team members also benefit from a supplementary defined contribution pension plan.
Management remuneration in 2024
The following remuneration details of Metso’s Leadership Team members, including President and CEO, amounted to a total of EUR 13,873,567 during 2024. The table below illustrates the remuneration elements paid to the Leadership Team members during 2024.
Management remuneration |
|||||
EUR |
Salary (including customary fringe benefits) |
Short-term incentive payment |
Share-based incentive payment |
Supplementary pension |
Total compensation |
President and CEO Sami Takaluoma* |
140,248 |
- |
- |
28,000 |
168,248 |
President and CEO Pekka Vauramo** |
777,684 |
807,937 |
2,736,437 |
193,646 |
4,515,704 |
Other Leadership Team members |
2,769,483 |
1,230,575 |
4,634,490 |
555,067 |
9,189,615 |
Total Compensation |
3,687,415 |
2,038,512 |
7,370,927 |
776,713 |
13,873,567 |
*) President and CEO between November 1 and December 31, 2024
**) President and CEO between January 1 and October 31, 2024
Short-term incentives
The short-term incentive plan, Metso Bonus, covers approximately 10,000 employees globally, including the Leadership Team. The Board approves the Group-level terms and targets for the Metso Bonus annually. In addition, the Board annually sets and approves the President and CEO’s short-term incentive plan.
The Bonus payout, if any, is mainly based on the achievement of predefined financial targets. For 2024, the main financial targets used were sales, orders received and adjusted EBITA, on the Group and Business Area levels. In addition to the financial targets, individual, team and business bonus performance targets are used.
Maximum Metso Bonus payout, % of annual salary:
Maximum bonus payout |
|
President and CEO |
100% |
Other leadership team members |
60% |
Other employees |
55% (at highest, maximum varies based on role) |
In addition to the Metso Bonus, local productivity plans are designed to drive and support the performance of various production units. Targets for local productivity plans are mainly based on productivity, quality, and safety KPIs. Local mandatory bonus plans are defined by local legislative requirements and are typically profit-sharing plans. An employee can participate in one bonus plan at a time.
Long-term incentives
The Board decides on and implements Metso’s long-term incentive plans. The purpose of these plans is to align the interests of operative management and shareholders in driving the company’s performance and success. The plans also aim to ensure long-term commitment of management and offer them a competitive reward scheme.
Any shares to be potentially paid as reward in these incentive plans will be acquired through public trading and therefore will have no diluting effect on the share value. Share repurchase and share issue authorizations are obtained from the Annual General Meeting. The current valid authorizations are presented on our website. There are no options outstanding or available from any of the prior option programs.
The company applies a share ownership recommendation policy for the members of the Leadership Team and for the President and CEO. In accordance with this policy, at least 50 percent of the share rewards (net shares after deduction of the applicable payroll tax) received by these individuals under the performance-based share plans shall be retained until the share ownership of the individual participant amounts to their annual gross base salary.
If the participant’s employment or service ends for reasons relating to the participant before the reward payment, no reward will be paid from the long-term incentive plans. Long-term incentive payments cannot exceed 350% of the participant’s annual base salary at the time of payment.
Long-term incentive plans at Metso
On July 1, 2020, Metso announced new share-based long-term incentive programs for the Company’s management and selected key employees. The programs include a Performance Share Plan (also “PSP”) and a Restricted Share Plan (“RSP”) as a complementary structure for specific situations.
Performance Share Plan
The Performance Share Plan consists of annually commencing individual performance share plans, each comprising a three-year performance period, followed by the payment of the potential share reward in listed shares of Metso. The commencement of each new individual Plan is subject to a separate Board approval.
Performance Share Plan 2025-2027
PSP 2025-2027 commenced in 2025 and the potential share rewards thereunder will be paid in spring 2028, provided that the performance targets set by the Board of Directors for the Plan are achieved.
The performance measures based on which the potential reward under PSP 2025-2027 will be paid are the absolute total shareholder return of Metso’s share, cumulative earnings per share and sales growth of the company’s Metso Plus offering.
Approximately 200 key employees of Metso, including the Leadership Team are eligible to participate in PSP 2025-2027. If all the performance targets set for PSP 2025–2027 are fully achieved, the aggregate maximum number of shares to be paid based on this Plan is approximately 2.25 million shares (referring to gross earning before the withholding of the applicable payroll tax).
Restricted Share Plan
The Restricted Share Plan consists of annually commencing restricted share plan, each comprising a three-year retention period and followed by the payment of the share rewards granted within the Plan in listed shares of Metso. The commencement of each new individual Plan is subject to a separate Board approval.
The purpose of the Restricted Share Plan is to serve as a complementary long-term retention tool for individually selected key employees of Metso in specific situations.
Restricted Share Plan 2025-2027
In December 2024, the Board of Directors decided to commence a new plan period for the complementary Restricted Share Plan. The share rewards potentially granted thereunder will be paid in spring 2028.
The aggregate maximum number of shares to be paid based on RSP 2025-2027 is approximately 450,000 shares (referring to gross earning before the withholding of the applicable payroll tax).
Status of the ongoing Metso PSP and RSP plans as of December 31, 2024
|
|
Maximum number of gross shares to be paid |
|
||||
Plan |
Current number of participants |
CEO |
Other Leadership Team members |
Other participants |
Total maximum number of gross shares to be paid* |
Performance criteria (weighting) |
Share delivery year |
PSP 2024-2026 |
185 |
140,000 |
206,000 |
1,293,534 |
1,639,534 |
· Absolute TRS (40%) · Earning per share (40%) · ESG measure linked to sales growth of Company's Metso Plus products (20%) |
2027 |
PSP 2023-2025 |
177 |
97,000 |
212,700 |
1,428,734 |
1,738,434 |
· Absolute TRS (40%) · Earning per share (40%) · ESG measure linked to sales growth of Company's Metso Plus products (20%) |
2026 |
PSP 2022-2024 |
164 |
39,000 |
178,000 |
1,198,094 |
1,415,094 |
· Absolute TRS (40%) · Earning per share (40%) · ESG measure linked to sales growth of Company's Metso Plus products (20%) |
2025 |
RSP 2022-2024 |
18 |
- |
- |
75,700 |
75,700 |
|
2025 |
*) Maximum number of gross shares, taxes included, payable if the performance criteria are achieved in full