Cargotec’s governance and management are based on the Finnish Limited Liability Companies Act and Securities Markets Act, as well as the company’s Articles of Association and Code of Conduct. Cargotec class B share is listed at Nasdaq Helsinki and the company complies with the rules and guidelines of Helsinki Exchange and the Finnish Financial Supervision Authority. In 2019, Cargotec complied with all the recommendations of the Finnish Corporate Governance Code 2015, published by the Securities Markets Association and as of 1 Jan 2020, Cargotec complies with the Corporate Governance Code 2020 (www.cgfinland.fi).
Remuneration at Cargotec is managed through clearly defined processes and involves the Annual General Meeting of Shareholders (AGM), the Board of Directors (Board) and the Board’s Nomination and Compensation Committee (NCC). The AGM resolves annually on the remuneration of members of the Board of Directors, based on a proposal made by the Board’s Nomination and Compensation Committee (NCC). In determining such remuneration, the committee takes account of the Board members’ responsibilities and obligations towards the company. Furthermore, the committee compares the Board’s remuneration packages to those paid by other companies of the same size operating in a comparable business environment.
Cargotec’s remuneration policy is applied in determining the total remuneration of the CEO and the Deputy CEO (if any). The remuneration policy is approved by the Board of Directors and the AGM. Based on a proposal by the NCC, the Board also decides on the Leadership Team salaries, as well as their short-term incentive programmes and benefits. In addition, the Board of Directors decides on long-term incentive programmes and on the target group and allocation of such programmes based on a proposal by the NCC.
Based on the decision of the AGM of 27 May 2020, the Board’s annual remunerations are as follows:
• Chairman: EUR 85,000
• Vice Chairman: EUR 60,000
• Chairman of the Audit and Risk Management Committee: EUR 60,000
• Other Board members: EUR 45,000
In addition, a fee of EUR 1,000 is paid for attendance of meetings of the Board and its committees.
To ensure Cargotec’s business performance, successful execution of the merger, and shareholder value creation in 2021, Cargotec has extended a retention incentive program to the CEO. The value of the retention program is EUR 1,500,000, and the payment under the program will be paid as a one-off payment to the CEO’s supplemental pension plan under the new pension agreement after the completion of the merger. The payment is subject to the following preconditions: the merger is completed, the CEO continues in the service of the company, he has not served a notice of termination prior to the completion of the merger and has performed his duties according to his contract.