Harvia’s remuneration principles apply to the entire personnel of the company. Key principles of remuneration at Harvia are that remuneration is transparent, market-oriented, and that it rewards good performance.
The company’s remuneration policy aims to encourage and reward the management for operating in accordance with the set strategy and rules, and to motivate them to contribute to the success of the company. Well-functioning and competitive remuneration is an essential tool for engaging competent directors and executives for the Company. This, in turn, contributes to the financial success of the Company and the implementation of good corporate governance.
Remuneration supports the execution of the company’s strategy and promotes long-term profitability and the company’s competitiveness.
Remuneration policy
Remuneration report 2022
Remuneration report 2021
Remuneration report 2020
Remuneration report 2019
Remuneration report 2018
In accordance with the Limited Liability Companies Act, the shareholders decide on the remuneration of the members of the Board of Directors in the Annual General Meeting. The task of drafting the proposal for the remuneration of the members of the Board of Directors has been assigned to the Shareholders’ Nomination Board, established following the decision of the Annual General Meeting 2020.
Harvia’s Annual General Meeting held on 20 April 2023 resolved that a monthly remuneration of the members of the Board of Directors is paid as follows: The Chair of the Board of Directors is paid EUR 4,500 and members of the Board of Directors are each paid EUR 2,500. Additionally, the Chair of the Audit Committee is paid EUR 1,300 a month and members of the Audit Committee are paid EUR 750 a month.
Further, the monthly remuneration of the Board members will be paid in company shares and in cash in such a way that approximately 40 per cent of the total monthly remuneration will be paid in company shares purchased at a price determined in public trading on Nasdaq Helsinki Ltd and approximately 60 per cent will be paid in cash. The shares will be acquired within two weeks from the day following the publication of the company’s interim report for the period 1 January–31 March 2023. The company will pay any costs and transfer tax related to the purchase of company shares. In case the remuneration cannot be paid in company shares due to legal or other regulatory restrictions or due to other reasons related to the company or a member of the Board of Directors, the remuneration will be paid in cash.
A member of the Board of Directors may not transfer the shares received as remuneration for Board membership in 2023 until two years has passed since the date of transfer of the shares.
The remuneration for the members of the Audit Committee will be paid fully in cash.
The members of Board of Directors who live outside Finland will be paid EUR 900 for each meeting if the member travels to Finland only for that meeting. The fee will be paid in cash. When the member of Board of Directors attends the meeting by telephone or other electronic means, no fee will be paid for that meeting. No fee is paid for decisions made without convening a meeting.
The travel expenses of the members of the Board of Directors are compensated in accordance with the company’s travel rules.
Read more about remuneration of the Board of Directors in Remuneration report 2022.
The Board of Directors determines the salary, bonuses and other benefits of the CEO. The remuneration of the CEO consists of a fixed monthly salary, fringe benefits, and performance-based incentive programs.
The fixed monthly salary of CEO Järnefelt is EUR 35,000. If certain conditions are met, the Board of Directors may decide to increase the CEO’s fixed monthly salary to EUR 40,000 starting from 1 April 2024. In accordance with the company’s car policy, the CEO is entitled to a company car and a company mobile phone.
The CEO’s performance targets are set by the company’s Board of Directors. The performance period for the CEO’s short-term incentive program is one year. The purpose of the short-term incentive program is to support the achievement of the company’s short-term financial and strategic objectives.
The bonus payable to CEO Järnefelt based on the short-term incentive program for 2023 can account for a maximum of 50 percent of his fixed salary. Bonus payment is based on achieving the targets set related to the Group’s consolidated adjusted operating profit as well as the personal targets. The start time of the service of the CEO, 1 June 2023, will be taken into account in the payment of a possible bonus.
In addition, the CEO is part of a performance bonus system that covers the entire personnel of Harvia’s companies in Finland. In the system, the performance bonus is a maximum of six percent of the annual salary, based on the achievement of certain profitability targets.
The CEO is covered by the 2023–2025 performance period of the share-based long-term incentive program for Harvia’s CEO, Management Team and selected key personnel. The number of Harvia shares payable to the CEO for the performance period can be no more than 13,835 shares (gross). The program is explained below in the section Share-based incentive program.
Read more about remuneration at Harvia in the Remuneration Report 2022.
The CEO’s contract contains a mutual six-month period of notice, and a 12-month non-compete period upon its termination. If the company terminates the contract of employment, the CEO is entitled to a severance payment corresponding to six months’ full salary.
The CEO’s retirement age is subject to the applicable legislation.
The Board of Directors determines the salary, bonuses and other benefits of the other Management Team members. The remuneration of the Management Team members consists of a fixed monthly salary, fringe benefits, and performance-based incentive programs.
Under the 2022 program, the performance bonuses of Harvia’s Management Team are based on personal targets and certain profitability targets set for the financial year. The fulfilment of these conditions supports Harvia’s long-term financial success.
The maximum performance bonus payable to the other Management Team members for the financial year 2022 is equivalent to a maximum of two months’ full salary, and the personal target bonus is equivalent to one month’s full salary. In addition, members of the Management Team employed by Harvia Plc, Harvia Group Oy or Harvia Finland Oy are part of a performance bonus system where the performance bonus is a maximum of six percent of annual salary, based on the achievement of certain profitability targets.
The table below shows the total salaries and bonuses paid to the Management Team members, other than CEO, in 2022.
Remuneration paid to the management team members in 2022, EUR
| Fixed salaries1 | Bonuses paid for 2020 2) | Long-term incentive program 3) | Total |
| 1,177,155 | 311,259 | 1,949,319 | 3,437,733 |
1) Including fringe benefits. In September–December 2022, the Management Team was only paid a partial salary based on a voluntary decision by Harvia’s Management Team to lower the Management Team members’ salaries during said period.
2) The maximum incentive bonus for the financial year 2021 is equivalent to a two months’ full salary, and a maximum personal target bonus is equivalent to one month’s full salary.
3) Gross value of the rewards. The other management team members were paid 67,594 shares (gross), and the value of the shares on the date of payment was EUR 1,949,319. Withholding tax and possible other applicable contributions were deducted from the gross earning, and the remaining net amount was paid in shares.
The period of notice for other members of the Management Team varies between three to six months. Members of the Management Team are entitled to a salary from their period of notice. Management Team members are entitled to a statutory pension and their retirement age is determined within the framework of the work pensions system.
The Board of Directors of Harvia Plc decided on 21 May 2018 to establish a new share-based long-term incentive program. The purpose of the long-term incentive program is to support the implementation of the company’s strategy, to align the objectives of the management and the company’s shareholders to increase the value of the company, to improve the performance of the company and to strengthen the commitment of the management to the company.
For each performance period, the Board of Directors will separately decide the program participants, performance criteria and related targets, as well as the minimum, target and maximum reward potentially payable to each participant based on target attainment. The payment of rewards based on the performance criterion concerning organic growth requires that Harvia achieves a certain EBIT margin in the performance period.
If the targets of the incentive program are reached, the rewards will be paid in shares or in some situations in cash during the spring following the end of the given performance period. The program has no commitment period or terms and conditions associated with the number of shareholdings.
The total number of shares for the performance periods represents gross earning, from which withholding tax and possible other applicable contributions are deducted, and the remaining net amount is paid in shares. However, the company has the right to pay the reward fully in cash under certain circumstances.
Summary
| Performance period | Targets | Gross earning, total | Payment date |
| 2018–2020 | Total shareholder return, organic revenue growth, EBIT margin | 89,727 | Spring 2021 |
| 2019–2021 | Total shareholder return, organic revenue growth, EBIT margin | 101,390 | Spring 2022 |
| 2020–2022 | Total shareholder return, organic revenue growth, EBIT margin | 35,809 | Spring 2023 |
| 2021–2023 | Total shareholder return, organic revenue growth, EBIT margin; sustainability (sustainability strategy and metrics) | 33,500 | Spring 2024 |
| 2022–2024 | Total shareholder return, organic revenue growth, EBIT margin; sustainability (reducing CO2 emissions) | 73,600 | Spring 2025 |
| 2023–2025 | Total shareholder return, organic revenue growth, reducing CO2 emissions, EBIT margin | 61,600 | Spring 2026 |
