Proposals to the Annual General Meeting
Proposals of the Shareholders’ Nomination Board to Neste’s Annual General Meeting
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 2024 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, Just Jansz, Heikki Malinen, 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 Conrad Keijzer, Pasi Laine and Sari Mannonen shall be elected as new members.
Kimmo Viertola, who has been a Board member of the Company as of 2023, has informed that he will not be available for re-election for the next period of office. “We would like to thank Kimmo for his contributions in the Board and the Audit Committee”, says Maija Strandberg, Chair of the Nomination Board.
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. 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 also 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.
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.
In addition to an increase of the fixed annual fees, the Nomination Board proposes that the committee fees previously in use shall no longer be payable in order to simplify the remuneration structure, as set out below.
The proposal by the Nomination Board for remuneration to be paid to the Board members for the next term is as follows (remuneration for 2023 in brackets):
Annual fees: The Board members are paid the following fixed annual fees for the term starting at the end of the 2024 AGM and ending at the end of the 2025 AGM:
Chair: EUR 135,000 (95,000);
Vice Chair: EUR 75,000 (60,000);
Chair of Audit Committee: EUR 75,000 (60,000) if he or she does not simultaneously act as Chair or Vice Chair of the Board; and
Member: EUR 60,000 (45,000).
Meeting fees: In addition to the above-mentioned fixed annual fees, the Board members will be paid as follows for participation in Board or committee meetings:
EUR 1,000 (1,000) for meetings held in the member’s home country;
EUR 2,000 (2,000) for meetings held in the same continent as the member’s home country; and
EUR 3,000 (3,000) 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 the 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. 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 2024. 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 2023. 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.
31 January 2024
Shareholders' Nomination Board
Proposals of the Board of Directors to Neste's Annual General Meeting
Use of the profit shown on the Balance Sheet and deciding on the payment of dividend
The Board of Directors proposes to the AGM that a dividend of EUR 1.20 per share be paid on the basis of the approved balance sheet for 2023. The dividend shall be paid in two installments.
The first installment of the dividend, EUR 0.60 per share, will be paid to shareholders registered in the shareholders' register of the Company maintained by Euroclear Finland Oy on the record date for the first installment of the dividend, which shall be Tuesday, 2 April 2024. The Board proposes to the AGM that the first installment of the dividend would be paid on Tuesday, 9 April 2024.
The second installment of the dividend, EUR 0.60 per share, will be paid to shareholders registered in the shareholders' register of the Company maintained by Euroclear Finland Oy on the record date for the second installment of the dividend, which shall be Wednesday, 2 October 2024. The Board proposes to the AGM that the second installment of the dividend would be paid on Wednesday, 9 October 2024.
The Board of Directors is authorized to set a new dividend record date and payment date for the second installment of the dividend, in case the rules and regulations on the Finnish book-entry system would be changed, or otherwise so require.
Remuneration Report
The Board of Directors proposes that the Remuneration Report for the Company's governing bodies for 2023 be approved. The resolution is advisory in accordance with the Finnish Companies Act.
The Remuneration Report is available on the Company's website www.neste.com/agm on 6 March 2024 at the latest.
Remuneration Policy
The Board of Directors proposes that the Remuneration Policy for the Company's governing bodies be approved. The resolution is advisory in accordance with the Finnish Companies Act.
The Remuneration Policy is available on the Company's website www.neste.com/agm on 6 March 2024 at the latest.
Deciding the remuneration of the Auditor
The Board proposes, on the recommendation of the Audit Committee, to the AGM that the Auditor's fee shall be paid as invoiced and approved by the Company.
Election of the Auditor
The Board proposes, on the recommendation of the Audit Committee, that the AGM would re-elect KPMG Oy Ab, Authorized Public Accountants, as the Company's Auditor. KPMG Oy Ab has announced that it will appoint Mrs. Leenakaisa Winberg, Authorized Public Accountant, as the principally responsible auditor. The Auditor's term of office shall end at the closure of the next AGM.
Deciding the remuneration of the Sustainability Reporting Assurer
The Board proposes, on the recommendation of the Audit Committee, to the AGM that the fee of Sustainability Reporting Assurer shall be paid as invoiced and approved by the Company.
Election of the Sustainability Reporting Assurer
In accordance with the EU's Corporate Sustainability Reporting Directive (CSRD) and complementary national legislation, Neste will publish a Sustainability Report for the first time as regards the financial year 2024.
The Board proposes, on the recommendation of the Audit Committee, that KPMG Oy Ab, Authorized Sustainability Audit Firm, be elected as the Sustainability Reporting Assurer for the term of office which shall end at the closure of the next AGM. KPMG Oy Ab has announced that it will appoint Mrs. Leenakaisa Winberg, Authorized Public Accountant, Authorized Sustainability Auditor as the principally responsible sustainability reporting assurer, if KPMG is elected as the Sustainability Reporting Assurer.
Authorizing the Board of Directors to decide the buyback of Company shares
The Board proposes that the AGM should authorize the Board to purchase Company shares ("Buyback authorization") under the following terms:
Under this Buyback authorization, the Board shall be authorized to decide the purchase of and/or take as security a maximum of 23,000,000 Company shares using the Company's unrestricted equity. The number of shares shall be equivalent to approximately 2.99% of the Company's total shares.
Shares may be purchased in one or more lots. The purchase price shall be at least the lowest price paid for Company shares in regulated trading at the time of purchase and no more than the highest price paid for Company shares in regulated trading at the time of purchase. In connection with the buyback of Company shares, derivative, share lending, or other agreements that are normal within the framework of capital markets may take place in accordance with legislative and regulatory requirements and at a price determined by the market. The authorization shall allow the Board to decide to purchase shares otherwise than in proportion to shareholders' current holdings (directed buyback).
Shares so purchased can be used as consideration in possible acquisitions or in other arrangements that are part of the Company's business, to finance investments, as part of the Company's incentive program, or be retained, conveyed, or cancelled by the Company.
The Board of Directors shall decide the other terms related to the buyback of Company shares. The Buyback authorization shall remain in force for eighteen (18) months from the decision taken by the AGM. The authorization is proposed to revoke the buyback authorization granted to the Board of Directors by the AGM on 28 March 2023.
Authorizing the Board of Directors to decide on share issue
The Board proposes that the AGM would authorize the Board to decide on share issue under the following terms:
Under the authorization, the Board shall be authorized to take one or more decisions on the issuance of new shares and/or the conveyance of treasury shares held by the Company, provided that the number of shares thereby issued and/or conveyed totals a maximum of 23,000,000 shares, equivalent to approximately 2.99% of all the Company's shares.
The new shares may be issued and/or the treasury shares held by the Company may be conveyed to the Company's shareholders in proportion to the shares they already own or through a directed share issue that bypasses shareholders' pre-emptive rights if the Company has a weighty financial reason for doing so, such as using the shares in question as consideration in possible acquisitions or in other arrangements that are part of the Company's business, to finance investments, or as part of the Company's incentive program.
The new shares may be issued and/or the treasury shares held by the Company may be conveyed against payment or free of charge. A directed share issue may only be made free of charge if there is a particularly weighty financial reason, in respect of the Company's interests and those of all of its shareholders, for doing so. The new shares may also be issued free of charge to the Company itself.
The Board shall decide on other terms and conditions of share issue. The authorization shall remain in force for eighteen (18) months from the decision taken by the AGM. The authorization shall revoke the authorization granted by the AGM on 28 March 2023 to the Board to decide on share issue.
Amendment of the Articles of Association
The Board proposes to the AGM that due to new legislation concerning sustainability reporting assurer, a new Article 10 regarding sustainability reporting assurer would be added to the Articles of Association, and as a result, current Articles 10 and 11 will become Articles 11 and 12, correspondingly.
Further, the Board proposes that the forthcoming Article 12 (current Article 11) would be amended so that to the items on the agenda of the AGM, a reference of the fee of the sustainability reporting assurer would be added (supplement to the current sub-item 8), and that a new reference to the election of the sustainability reporting assurer would be added at the end of the article (new sub-item 12).
According to the proposal, Article 10 would in its entirety read as follows:
"10 § Sustainability Reporting Assurer
One Authorized Sustainability Audit Firm shall be elected as the Company's sustainability reporting assurer, and the principally responsible sustainability reporting assurer designated by it shall be Authorized Sustainability Auditor (ASA).
The term of office of the sustainability reporting assurer expires at the end of the next Annual General Meeting of Shareholders following the election."
According to the proposal, Article 12 (current Article 11) would in its entirety read as follows:
"12 § Annual General Meetings of Shareholders
The Annual General Meeting shall be held annually by the end of June.
The following shall be presented at the Annual General Meeting of Shareholders:
1. the Financial Statements, which also include the Consolidated Financial Statements, and the Review by the Board of Directors,
2. the Auditor's Report,
The following matters resolved:
3. the adoption of the Financial Statements, including also the adoption of the Consolidated Financial Statements,
4. the distribution of the profit shown in the Balance Sheet,
5. discharging the members of the Board of Directors, and the President and CEO from liability,
6. if necessary, the approval of the Remuneration Policy,
7. the approval of the Remuneration Report,
8. the remuneration to be paid to the members of the Board of Directors, the auditor and the sustainability reporting assurer,
9. the number of members of the Board of Directors,
And the following persons elected:
10. the Chairman, Vice Chairman, and the members of the Board of Directors,
11. the auditor, and
12. the sustainability reporting assurer."
Amendment of the Charter for the Shareholders' Nomination Board
The Board proposes that the Charter for the Shareholders' Nomination Board would be amended.
The proposal for the new Charter for the Shareholders' Nomination Board is available on the Company's website www.neste.com/agm.
7 February 2024
Board of Directors
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