Proposals of the Shareholders’ Nomination Board to Neste’s Annual General Meeting
Neste Corporation, Stock Exchange Release, 27 January 2023 at 9:30 a.m. (EET)
The Shareholders' Nomination Board, established by Neste Corporation's Annual General Meeting (AGM) on 4 April 2013, has forwarded to the Board of Directors of the Company its proposals to the 2023 AGM.
Board Members
The Nomination Board proposes that Matti Kähkönen shall be re-elected as the Chair of the Board of Directors. In addition, the current members of the Board, John Abbott, Nick Elmslie, Martina Flöel, Just Jansz, Jari Rosendal, Eeva Sipilä and Johanna Söderström are proposed to be re-elected for a further term of office. The Nomination Board proposes that Eeva Sipilä shall be elected as the Vice Chair of the Board.
Further, the Nomination Board proposes that the Board shall have ten members and that Heikki Malinen and Kimmo Viertola shall be elected as new members.
All persons proposed for Board service have given their consent to serving on the Board and are considered to be independent of the Company and its major shareholders, with the exception of Director General Kimmo Viertola of the Ownership Steering Department in the Prime Minister’s Office of Finland, who is, based on his employment/service relationship, non-independent of the company’s significant shareholder (the State of Finland). A brief presentation of the proposed new members is attached to this release. More information on the persons proposed by the Nomination Board for Board service can be found at www.neste.com.
As regards the selection procedure for the members of the Board of Directors, the Shareholders’ Nomination Board recommends that shareholders take a position on the proposal as a whole at the AGM. This recommendation is based on the fact that at Neste, in line with the Nordic governance model, the Shareholders' Nomination Board is separate from the Board of Directors. The Nomination Board, in addition to ensuring that individual nominees for membership of the Board of Directors possess the required competences, is also responsible for making sure that the proposed Board of Directors as a whole has the best possible expertise and experience for the Company and that the composition of the Board of Directors also meets other requirements of the Finnish Corporate Governance Code for listed companies.
Marco Wirén, who has been a Board member of the Company as of 2015, has informed that he will not be available for re-election for the next period of office. “Marco’s long-standing contribution as the Vice Chair and as a member of the Board and as a Chair of the Audit Committee has been strong and valuable. I wish to warmly thank him for the work done for Neste,” says Maija Strandberg, Chair of the Nomination Board.
Board Remuneration
The Shareholders’ Nomination Board concludes that the present remuneration proposal is part of a program for bringing Board remuneration to market level by 2026 as part of a long-term bringing of Board remuneration to a level comparable to those of peer companies. The Nomination Board annually brings proposals to this effect to the AGM in accordance with the Charter of the Nomination Board.
The proposal by the Nomination Board for remuneration to be paid to the Board members for the next term is as follows (remuneration for 2022 in brackets):
Annual fees:
The Board members are paid the following fixed annual fees for the term starting at the end of the 2023 AGM and ending at the end of the 2024 AGM:
- Chair: EUR 95,000 (78,100);
- Vice Chair: EUR 60,000 (54,400);
- Chair of Audit Committee: EUR 60,000 (54,400) if he or she does not simultaneously act as Chair or Vice Chair of the Board; and
- Member: EUR 45,000 (37,900).
Committee fees:
In addition to the above-mentioned fixed annual fees, the following annual fees for committee work will be paid:
- other members of the Audit Committee than its Chair will, for such position, be paid EUR 5,000 (3,000);
- the Chair of the Personnel and Remuneration Committee will, for such position, be paid EUR 6,000 (5,000), and its members will, for such position, be paid EUR 2,500 (2,000); and
- the Chair of another committee established based on Board decision will, for such position, be paid EUR 6,000 (5,000), and its members will, for such position, be paid EUR 2,500 (2,000).
Meeting fees:
In addition to the above-mentioned annual fees, the Board members will be paid as follows for participation in Board or committee meetings:
- EUR 1,000 (800) for meetings held in the member’s home country;
- EUR 2,000 (1,600) for meetings held in the same continent as the member’s home country; and
- EUR 3,000 (2,400) for meetings held outside the same continent as the member’s home country.
- The meeting fee for meetings held over the telephone or through other means of data communication is paid according to the fee payable for meetings held in each member's home country.
- In addition, compensation for expenses is paid in accordance with the Company's travel guidelines.
Payment in the form of shares:
Part of the fixed annual fees will be paid in the form of shares in Neste Corporation to be purchased from the markets as follows:
A portion of 40% of the fixed annual fee will be paid in the form of shares and the remainder in cash. Committee and meeting fees will be paid in cash. The shares will be purchased directly on behalf of the Board members within two weeks as of the first trading day of the Helsinki Stock Exchange following the publication of the interim report for the period 1 January to 31 March 2023. If the shares are not purchased and/or delivered based on a reason pertaining to the Company or the Board member, the fee will be in cash in its entirety. The Company is responsible for any transfer tax potentially levied on the purchase.
Composition of and Decision-Making by the Shareholders’ Nomination Board
The Shareholders' Nomination Board was appointed on 6 September 2022 and a new Chair was elected on 22 December 2022. In accordance with a decision made by the AGM, the Nomination Board consists of representatives of the Company's three largest shareholders, as of the first weekday in September: Senior Ministerial Adviser, Financial Affairs Maija Strandberg of the Ownership Steering Department in the Prime Minister’s Office of Finland, as the Chair of the Nomination Board as well as Senior Vice President, Investments Timo Sallinen of Varma Mutual Pension Insurance Company; President and CEO Jouko Pölönen of Ilmarinen Mutual Pension Insurance Company and Matti Kähkönen, the Chair of Neste's Board of Directors.
The Nomination Board made the above-mentioned proposals unanimously. As the Chair of the Board of Directors, Matti Kähkönen did not take part in the decision-making on the Nomination Board's proposal relating to the Chair of the Board or the Board remuneration.
The proposals by the Nomination Board will be included in the notice convening the 2023 AGM which will be announced later.
Neste Corporation
Susanna Sieppi
Vice President, Communications
Additional information: Chair of the Nomination Board, Senior Ministerial Adviser, Financial Affairs Maija Strandberg, tel. +358 (0)295 160981.
Neste in brief
Neste (NESTE, Nasdaq Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. We refine waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. We are the world’s leading producer of sustainable aviation fuel and renewable diesel and developing chemical recycling to combat the plastic waste challenge. We aim at helping customers to reduce their greenhouse gas emissions with our renewable and circular solutions by at least 20 million tons annually by 2030. Our ambition is to make the Porvoo oil refinery in Finland the most sustainable refinery in Europe by 2030. We are introducing renewable and recycled raw materials such as liquefied waste plastic as refinery raw materials. We have committed to reaching carbon-neutral production by 2035, and we will reduce the carbon emission intensity of sold products by 50% by 2040. We also have set high standards for biodiversity, human rights and supply chain. We have consistently been included in the Dow Jones Sustainability Indices and the Global 100 list of the world’s most sustainable companies. In 2021, Neste's revenue stood at EUR 15.1 billion. Read more: neste.com
