The terms of the managing director service agreement of President and CEO Markus Rauramo are in line with Fortum’s Remuneration policy for the governing bodies. The malus and clawback provisions for the President and CEO were not utilised in 2023.
Fixed compensation
The monthly fixed compensation of the President and CEO is EUR 125,000. The fixed compensation includes a company car and phone as fringe benefits. In addition, the President and CEO received an electric vehicle subsidy of 25% of the taxable value of the full car benefit in accordance with Fortum’s Global Company Car Instructions. In line with the Solidium bridge financing facility with the Finnish State, Markus Rauramo’s salary did not increase in 2022 (as of the signing date of the agreement) and 2023.
Incentives
As resolved by the Board of Directors, the variable elements in total (STI and LTI) are limited to a maximum pay-out of 120% of the President and CEO's annual fixed compensation. The maximum STI is limited to 40% of the annual fixed compensation. In accordance with the terms of the Solidium bridge financing facility with the Finnish State, Markus Rauramo is not paid the short- or long-term incentives (STI and LTI programmes) that accumulated in 2022 and 2023.
Pension
The retirement age of the President and CEO is determined in accordance with the Finnish Employees’ Pension Act. In addition to the statutory pension, the President and CEO is entitled to participate in the supplementary group pension plan for the members of the Fortum Leadership Team. The annual defined contribution premium is 20% of the annual fixed compensation. If Markus Rauramo’s managing director service agreement is terminated before the retirement age, the President and CEO is entitled to retain the funds that have accrued in the pension arrangement up to that time.
Other benefits and programs
Other benefits currently include insurance for permanent total disability and critical illness, life insurance, and voluntary participation in the sickness fund and in the Employee Share Savings (ESS) programme.
Termination of contract
The notice period for both parties is 6 months. If the company terminates the contract, the President and CEO is entitled in addition to the 6 months’ notice period compensation to a severance pay corresponding to 6 months’ base salary.
Supplementary information
President and CEO Markus Rauramo received compensation for serving as the Chair of the Supervisory Board of Uniper SE. The compensation for serving on Uniper’s Supervisory Board was paid according to the policies in force at Uniper. The fee for the service as the Chair until 21 December 2022 was EUR 204,247. In connection with the change in this Supervisory Board role in 2021, the Board of Directors of Fortum resolved that Markus Rauramo’s total compensation would not increase due to the changing role, and therefore the excess of the compensation paid based on the Deputy Chair role was decided to be decreased from the Fortum incentive payments. In accordance with the terms of the Solidium bridge financing facility with the Finnish State, the President and CEO is not paid any short- or long-term incentives that are accumulated in 2022 and 2023. Therefore, the Board of Directors resolved earlier that the agreed deduction related to the change in Uniper’s Supervisory Board role in 2021 will be done from the LTI payment in the spring of 2024. As Markus Rauramo decided to waive the LTI awards for the 2020–2022 and 2021–2023 LTI plans and no LTI awards will be paid in 2024, the Board of Directors resolved that the agreed deduction will be done from the incentive payments scheduled to be made in the spring of 2025.