Remuneration

Decision-making procedure

Remuneration at Kalmar is managed through clearly defined processes and involves the Annual General Meeting of Shareholders (AGM), the Shareholders’ Nomination Board, the Board of Directors  and the Board’s Personnel and Remuneration Committee. The AGM resolves annually on the remuneration of members of the Board of Directors, based on a proposal made by the Shareholders’ Nomination Board. 

The Personnel and Remuneration Committee is responsible for preparing a proposal to the Board of Directors regarding the terms of service of the President and CEO, and prepares the remuneration issues of other top management members as needed before board approval. The committee prepares the remuneration policy and remuneration report for Kalmar’s governing bodies. Furthermore, the Personnel and Remuneration Committee prepares Kalmar’s remuneration strategy and compensation systems to be used and follows their outcome and functionality.

Remuneration policy

The Remuneration Policy presents the remuneration framework for the members of the Board of Directors and the President and CEO of Kalmar. The Policy shall also be applied to any Deputy CEO, should such Deputy CEO be appointed.

In accordance with the implementation of the amended European Shareholder Rights Directive (SRD) in Finland, Kalmar’s Remuneration Policy has been presented and approved at the Annual General Meeting (AGM) of Cargotec on 30 May 2024. The AGM resolution is advisory, but all remuneration shall be in line with the  Remuneration Policy presented to shareholders. The Remuneration Policy is intended to remain in place for four years until the AGM of 2028.

Board remuneration

Based on the decision of the AGM of Cargotec (30 May 2024), the Board’s annual remunerations are as follows:

• Chair of the Board: EUR 160,000
• Vice Chair of the Board: EUR 95,000
• Each member of the Board: EUR 80,000
• Chair of the Audit and Risk Management Committee: EUR 20,000
• Each member of the Audit and Risk Management Committee: EUR 10,000
• Chair of any other committee possibly constituted by the Board in accordance with a separate decision by the Board: EUR 15,000 (maximum)
• Each member of any other committee constituted by the Board: EUR 5,000 

Approximately 50 percent of the yearly remuneration will be paid in Kalmar’s class B shares and the rest in cash. Kalmar will cover the transfer taxes related to the remuneration paid in shares. In addition, the members of the Board of Directors will be paid EUR 3,000 per meeting held on a different continent than their domicile and EUR 1,500 for additional meetings held outside the regular board and committee meeting cadence. The expenses of Board members related to travel and accommodation as well as other costs directly related to board and committee work will be reimbursed in accordance with Kalmar’s policy.

Remuneration of the Leadership Team and the President and CEO

Kalmar follows a total remuneration approach, where all remuneration elements are taken into account when setting and reviewing compensation. The remuneration of the CEO and the Deputy CEO (if any) may consist of fixed salary, pension and other benefits and programmes, and of variable pay components. The variable pay includes both short- and long-term incentives.

Pursuant to the President and CEO’s contract of service with Sami Niiranen, Mr. Niiranen’s remuneration consists of an annual base salary, currently 550,000 EUR. Mr. Niiranen is also entitled to customary fringe benefits and to the company's short- and long-term incentive schemes.

The short-term incentive scheme earning opportunity for the President and CEO is at target level 65% and at maximum level 130% of annual base salary. In 2024, the short-term incentive scheme is based on comparable operating profit and cash flow (70% weight) as well as individual strategic targets (30% weight).

The long-term incentive scheme earning opportunity for the President and CEO is at target level 115% and at maximum level 230% of annual base salary, defined at the grant of each scheme. Mr. Niiranen currently participates in two performance share programmes (PSP). Mr. Niiranen has been granted an opportunity to earn a maximum of 5,560 shares within the PSP 2023-2025 and a maximum of 34,670 shares within the PSP 2024-2026.

Share-based incentive programmes

The long-term incentive schemes in Kalmar are either performance share plans based on the company's performance or restricted share plans that are based on continuous employment. Schemes typically consist of a 3-year performance or restriction period. Company's practice is that one new performance and restriction period commences annually.

Performance Share Programmes

Performance Share Programmes consist of 3-year performance periods that the Board of Directors can decide on annually. Kalmar currently has three active Performance Share Programmes (PSP) that are presented in the table below.

In the PSPs, participants are given an opportunity to earn Kalmar shares. The rewards are based on the company’s performance against the criteria set by the Board of Directors and will be paid to the participants after the performance period, given that the participants’ employment continues without termination at the time of payment. In addition to the rewards payable in shares, the rewards include a cash portion which is intended to cover the taxes and tax-like payments arising to the key employees from the reward.

(*) The number of shares converted into Kalmar B-class shares after the Cargotec Corporation demerger on 30.6. 2024. Status of the programmes on 7 August 2024.

Restricted Share Plans

Restricted Share Plans consist of 3-year restriction periods that the Board of Directors can decide on annually. Kalmar currently has three active Restricted Share Plans that are presented in the table below. The rewards will be paid to the participants, given that the employment continues without termination at the time of payment. In addition to the rewards payable in shares, the rewards include a cash portion which is intended to cover the taxes and tax-like payments arising to the participants from the reward.

(*) The number of shares converted into Kalmar B-class shares after the Cargotec demerger on 30.6.2024. Status of the programmes on 7 August 2024.

Remuneration Report 

The company shall publish its Remuneration Report on the company’s website in accordance with the Corporate Governance Code. The Remuneration Report sets out how Kalmar has implemented its Remuneration Policy. The report includes information concerning remuneration of the Board of Directors and the President and CEO of Kalmar. The shareholders will take an advisory vote on the approval of the Remuneration Report at the Company’s Annual General meeting in 2025.

Remuneration Policy