Remuneration

• Remuneration report 2023
• Remuneration report 2022
• Remuneration report 2021
• Remuneration report 2020
• Remuneration report 2019
• Remuneration report 2018

In accordance with the Finnish Limited Liability Companies Act, the shareholders decide on the remuneration of the members of the Board of Directors in the Annual General Meeting. The Shareholders’ Nomination Board is responsible for drafting the proposal for the remuneration of the members of the Board of Directors and presenting it to the General Meeting.

Remuneration of the Board

Harvia’s Annual General Meeting, held on 8 April 2025, resolved that a monthly remuneration be paid to the members of the Board of Directors as follows:

• the Chair of the Board of Directors EUR 5,000
• Deputy Chair of the Board EUR 3,500
• other members of Board of Directors EUR 3,000.

The remuneration of the Board committee members is paid as meeting fees as follows: EUR 1,000 per meeting for the chair of the committee and EUR 600 per meeting for the other members. The remuneration for the Board committee work is paid fully in cash.

The monthly remuneration of the Board members will be paid in company shares and in cash in such a way that 40 percent of the total monthly remuneration will be paid in company shares purchased at a price determined in public trading on Nasdaq Helsinki Ltd or via a share issue and 60 percent will be paid in cash. The company will pay any trading costs and transfer tax related to the purchase of the remuneration shares. In case the remuneration cannot be paid in the company’s 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 or if the payment of the remuneration in shares would prove to be unreasonably difficult in practice, the remuneration will be paid in cash.

The Nomination Board has recommended that a member of the Board of Directors does not assign the shares received as remuneration for Board membership in 2025 until two years have passed since the date of receiving the shares.

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 policy.

The members of the Board of Directors are not included in Harvia’s short- or long-term incentive programs. The Board members have not received any rewards from other Harvia Group companies.

Read more about remuneration of the Board of Directors in the Remuneration report 2024.

Decisions concerning the remuneration of the company’s CEO and the terms of the CEO’s service contract are made by the company’s Board of Directors within the limits of the valid remuneration policy presented to the General Meeting.

The remuneration of the CEO consists of a monthly salary and other taxable benefits provided in compliance with the local market practice, which may include, for example, car and telephone benefits and performance-based incentive systems. The remuneration of the CEO may also include supplementary pension arrangement and severance payment. As of 1 January 2025, the monthly salary of CEO Järnefelt is EUR 43,250.

The CEO’s performance-based incentive systems consist of an annual short-term incentive scheme and a long-term share-based incentive scheme. The target and maximum levels of the variable remuneration are based on the long-term strategic objectives defined by the Board of Directors.

Short-term incentive scheme

The CEO can be paid an annually determined performance bonus based on the short-term incentive scheme. The CEO’s performance criteria and objectives are set by the company’s Board of Directors annually to reflect business priorities and may include a balanced combination of financial, strategic and non-financial targets.

The performance period for the CEO’s short-term incentive scheme is one year. The purpose of the short-term incentive scheme is to support the achievement of the company’s short-term financial and strategic objectives.

The payment is based on achieving the criteria predefined annually by the Board of Directors. If the criteria are met, the CEO may be entitled to a bonus amounting to a maximum of 70% of the fixed annual salary.

The criteria defined for the CEO by the Board of Directors can vary from year to year to reflect business priorities and may take into account, for instance, the company’s revenue, operating profit, customer retention, efficiency of operations, sustainability, the CEO’s personal targets, employee satisfaction, the progress of product development and product group-specific growth. In any given year, the majority of the criteria will be based on financial indicators.

Long-term incentive scheme

The purpose of the long-term incentive scheme is to support the implementation of the company’s strategy, align the objectives of the CEO and the company’s shareholders to increase the value of the company, as well as improve the performance of the company and commit the CEO to the company. The CEO may be eligible for a share or stock option incentive scheme as decided by the company.

The long-term incentive scheme consists of performance periods of at least three years long. For each performance period, the Board of Directors will separately decide the performance criteria, the related targets and weightings, as well as the minimum, target, and maximum reward potentially payable based on achieving the targets. At target level, the maximum reward is 70% of the fixed annual salary, with upper range at 140% of the fixed annual salary, calculated based on the market value of shares at the date of issue.

If the targets of the incentive scheme are reached, the rewards will be paid during the spring following the end of the given performance period. The possible reward may be paid in the form of shares or in cash after the performance period has ended.

The criteria defined by the Board of Directors can vary from year to year to reflect business priorities and include elements related to Harvia’s growth, profitability and sustainability to support the company’s long-term business strategy and financial success. The criteria may take into account, for instance, the total shareholder return (TSR) of the share, growing net sales and EBIT, and the reduction of CO₂ emissions or another ESG metric. Rewards on revenue growth are subject to achieving minimum EBIT margins during the performance periods. In any given year, the majority of the criteria will be based on financial indicators.

The CEO is covered by the long-term share-based incentive program for Harvia’s CEO, Management Team and selected key personnel for the 2023–2025, 2024–2026 and 2025−2027 performance periods. The program is described in the section Share-based incentive program.

Read more about the remuneration of Harvia’s CEO in the Remuneration report 2024.

Key terms of service of the CEO

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. The remuneration of the CEO is described above.

Under the 2024 short-term incentive program, the performance bonuses of Harvia’s Management Team are based on personal targets and the Management Team’s shared profitability target set for the financial year. The fulfillment of these conditions supports Harvia’s long-term financial success.

The maximum performance bonus potentially payable to the other Management Team members for the financial year 2024 is equivalent to three to four months’ full salary, depending on the member in question. Of the maximum amount, the weight of personal targets is one third and that of the profitability target is two thirds. In addition, members of the Management Team employed by Harvia Plc, Harvia Group Oy or Harvia Finland Oy were part of a personnel-wide performance bonus system in the financial year 2024, where the performance bonus is a maximum of six percent of annual salary, based on the achievement of certain profitability targets.

Remuneration paid to the Management Team members in 2024, EUR

1) Including fringe benefits.

2) For the financial year 2023, the other Management Team members were paid a maximum performance bonus corresponding to two months’ full salary, as well as a personal target bonus corresponding to one month’s full salary.

3) Gross value of the rewards. The other Management Team members were paid a total of 1,424 shares (gross), and the value of the shares on the date of payment was EUR 38.8425 per share (mean price on 10 June 2024). Withholding tax and possible other applicable contributions were deducted from the gross earnings, and the remaining net amount was paid in shares.

Key terms of employment of other members of the Management Team

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 employment pension system. The other members of the Management Team are not covered by a supplementary pension plan. In 2024, six members of the Management Team had a car benefit, and two members had a company apartment.

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 achieve 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 earnings, 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

The payment of rewards based on the performance criterion concerning revenue growth requires that Harvia achieve a certain EBIT margin in the performance period.