Remuneration

The Annual General Meeting decides on the remuneration to the members of the Metso Outotec Board for one term of office at a time.

The Annual General Meeting 2022 confirmed the annual remunerations to the Board members as follows:

• Chair - EUR 156,000
• Vice Chair - EUR 82,500
• Other members - EUR 67,000

Additional annual remuneration:

• Chair of the Audit and Risk Committee (AC) - EUR 23,800
• Chair of the Remuneration and HR Committee (RHRC) - EUR 12,400
• Committee members (ARC) - EUR 10,300
• Committee members (RHRC) - EUR 5,150

The annual fees shall be paid to the Board members of Metso Outotec in proportion to the actual length of their term of office.

Meeting fees (including committee meetings):

• EUR 900 for meetings requiring travel within the Nordic countries
• EUR 1,800 for meetings requiring travel within a continent
• EUR 3,000 for meetings requiring intercontinental travel
• EUR 900 for meetings with remote attendance

The Board members of Metso Outotec could choose to receive either 40% or 20% of their annual fixed fee in shares of Metso Outotec. Board members shall be reimbursed the direct costs arising from the board work.

Remuneration and employment terms of Metso Outotec’s President and CEO

The remuneration paid to the President and CEO is determined by the Metso Outotec Board. Metso Outotec’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.

Employment terms and conditions of Metso Outotec’s President and CEO Pekka Vauramo:

Annual Salary

Total annual salary EUR 859,000 including fringe benefits.

Short-term incentive (annual performance bonus)

The annual bonus can be earned in accordance with terms approved by the Board. The maximum bonus is 100% of the total annual salary.

Long-term incentives

According to the Long-term Performance Share Plan, the maximum share allocation for the President and CEO corresponds to 200% of the total annual salary. The purpose of the plan is to align the interests of Metso Outotec’s management and shareholders in creating shareholder value. In addition, the President and CEO is entitled to participate in a share matching program.

Pension

It has been agreed that Mr. Pekka Vauramo will continue as the President and CEO of Metso Outotec until the end of 2023. The President and CEO is entitled to participate in a supplementary defined contribution pension plan. The supplementary pension contribution is equivalent to 25% 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 Executive Team members

The Board’s Remuneration and HR Committee reviews the compensation and benefits of the other Executive 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 Executive Team members. Metso Outotec’s Executive Team members residing in Finland also benefit from a supplementary defined contribution pension plan.

Management remuneration in 2021

The following remuneration details of Metso Outotec’s Executive Team members, excluding President and CEO, amounted to a total of EUR 5,849,154 during 2021. The table below illustrates the remuneration elements paid to the Executive Team members during 2021. President and CEO’s remuneration is illustrated in a separate Remuneration report.

Executive Team benefits also include a supplementary defined contribution pension plan. In 2021, pension insurance premium payments totaled EUR 561 thousand.

The short-term incentive plan, Metso Outotec Bonus, covers approximately 9,000 employees globally, including the Executive Team. The Board approves the Group-level terms and targets for the Metso Outotec 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 2021, the financial targets used were sales, adjusted EBITA and the progress of integration activities on the Group and Business Area levels. In addition to the financial targets, individual, team and business bonus performance targets are used.

Maximum Metso Outotec Bonus payout, % of annual salary:

In addition to the Metso Outotec 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.

The Board decides on and implements Metso Outotec’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 Executive 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 his/her 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 plans at Metso Outotec

On July 1, 2020, Metso Outotec 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”), a Deferred Share Plan (“DSP”) and a Restricted Share Plan (“RSP”) as a complementary structure for specific situations. On December 17, 2020, Metso Outotec announced to continue the existing PSP and RSP structures with new plan period for 2021-2023.

Status of the ongoing Metso Outotec PSP and DSP plans as of December 31, 2021

*) Maximum number of gross shares, taxes included, payable if the performance criteria are achieved in full.

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 Outotec. The commencement of each new individual Plan is subject to a separate Board approval.

Performance Share Plan 2022-2024

PSP 2022-2024 commenced in 2022 and the potential share rewards thereunder will be paid in spring 2025, 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 2022-2024 will be paid are the absolute total shareholder return of Metso Outotec’s share, earnings per share and sales growth of the company’s Planet Positive products.

Approximately 200 key employees of Metso Outotec, including the Executive Team are eligible to participate in PSP 2022-2024. If all the performance targets set for PSP 2022–2024 are fully achieved, the aggregate maximum number of shares to be paid based on this Plan is approximately 1.8 million shares (referring to gross earning before the withholding of the applicable payroll tax).

Performance Share Plan 2021-2023

PSP 2021-2023 commenced in 2021 and the potential share rewards thereunder will be paid in spring 2024, 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 2021-2023 will be paid are the absolute total shareholder return of Metso Outotec’s share, earnings per share and an ESG measure linked to sustainable development of Metso Outotec.

Approximately 190 key employees of Metso Outotec, including the Executive Team are eligible to participate in PSP 2021-2023. If all the performance targets set for PSP 2021–2023 are fully achieved, the aggregate maximum number of shares to be paid based on this Plan is approximately 2.8 million shares (referring to gross earning before the withholding of the applicable payroll tax).

Performance Share Plan 2020-2022

PSP 2020–2022 commenced in 2020 and the potential share rewards thereunder will be paid in spring 2023, 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 2020–2022 will be paid are the absolute total shareholder return of Metso Outotec’s share and the achievement of the synergy targets set in connection with the combination of Metso Minerals and Outotec.

Executive Team members were eligible to participate in the PSP 2020–2022 plan. If all the performance targets are fully achieved, the aggregate maximum number of shares to be paid based on this Plan is approximately one million shares (referring to gross earning before the withholding of the applicable payroll tax).

Deferred Share Plan

The Deferred Share Plan consists of annually commencing share-based incentive plans, which comprise a performance period and approximately two-year retention period after the confirmation of the potential share reward, followed by the payment of the share reward in listed shares of Metso Outotec. In December 2020, Board of Directors decided not to commence a new plan period for the Deferred Share Plan.

Deferred Share Plan 2020–2022

The potential rewards will be paid in spring 2023, 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 the Deferred Share Plan will be paid, are based on the performance measures applied to the annual bonus plan.

If all the performance targets set for the plan are fully achieved, the aggregate maximum number of shares to be paid is approximately 2.2 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 Outotec. 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 Outotec in specific situations.

Restricted Share Plan 2022-2024

In December 2021, 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 2025.

The aggregate maximum number of shares to be paid based on RSP 2022-2024 is approximately 368,000 shares (referring to gross earning before the withholding of the applicable payroll tax).

Restricted Share Plan 2021-2023

In December 2020, 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 2024.

The aggregate maximum number of shares to be paid based on RSP 2021-2023 is approximately 280,000 shares (referring to gross earning before the withholding of the applicable payroll tax).

Restricted Share Plan 2020-2022

Potentially granted reward from the plan will be paid in spring 2023.

The aggregate maximum number of shares to be paid based on RSP 2020–2022 is approximately 320,000 shares (referring to gross earning before the withholding of the applicable payroll tax).

Performance and restricted share plans 2019-2021

Board of Directors on February 9, 2022 approved a share delivery to be made on February 24, 2022 on the following plans, which started either in Metso or Outotec: Metso Performance Share Plan 2019-2021, Metso Restricted Share Plan 2019-2021 and Outotec Performance Share Plan 2019-2021.

METSO DEFERRED SHARE UNIT PLAN 2019-2021

Deferred Share Unit Plan (DSUP) is a long-term share value-based incentive plan that aligns and rewards from employee’s performance and Metso Outotec share value development during a performance period. The reward will be payable after three years of the commencement of the program, if the terms of payment are being met. No new plan periods will be started under Metso Deferred Share Unit Plan structure.

At the end of 2021, there were 86 participants in the DSUP 2019-2021 plan. Potential cash reward will be paid in 2022.

President and CEO’s matching share plan

Metso Outotec has one active Matching Share Plan for President and CEO Pekka Vauramo. The plan requires personal investment to the company shares. According to the Matching Share Plan, President and CEO Vauramo is entitled to receive in total 117,075 gross Metso Outotec shares in three equal instalments. Each instalment is subject to fulfill the performance criterion measured as adjusted EBITA.

First and second installments have been made to the President and CEO, February 2021 and February 2022 respectively, as the set performance criterions were met.