Reward Agency’s 10th annual report of publicly listed companies executive and board remuneration has now been published. Once again we have analysed the Finnish remuneration policies and reports published by Finnish listed companies in the spring of 2024. The research data consists of 179 companies in the stock exchange’s main list and the First-North list of companies.
Median CEO total remuneration 416 000 eur
Listed company CEO’s fixed annual salary (base salary and tax value of benefits) median in 2023 was 337 000 Euros. When the paid Short-Term incentives are considered, the CEO median salary becomes 394 000 euros per year, and when the paid Long-Term Incentives are added, the median becomes 416 000 euros per year.
The differences in CEO remuneration levels are significant. The bigger the company, the bigger the awards. In the largest Finnish PLCs with a turnover of more than 2 billion euros, the median level total remuneration is 2,7 million euros per year. In small-sized listed companies with a turnover of less than 50 million euros, the median total remuneration level is less than tenth of this, 215 000 euros per year.
The Fixed Salary median increased 7 % compared to the previous year. The CEO changed in no less than 31 companies last year, which partly explains the level of increase alongside inflation. In the companies, in which the reported salaries are comparable with each other, the CEO median Fixed Salary increased 2 % compared to the previous year.
Sustainability is emphasized in incentive plans
Listed companies have continued to tune their incentive plans to compete in attracting, motivating and committing talent as well as making total rewards more flexible and impacting on behaviour. The changes in the Short-Term Incentives are more moderate, but the significance of Long-Term Plans increases continually. Leading companies invest in remuneration as a whole and incentives, not in increasing fixed salaries.
Compared to the previous years, the utilization of sustainability objectives kept increasing both in Short-Term and Long-Term Incentive Plans. Environment and Sustainable Development focused objectives are common alongside traditional safety, customer and employee satisfaction measures.
A third of listed companies utilize Supplementary Pensions
The executive statutory pension is supplemented by contribution and benefit-based pensions in a third of listed companies, half of the companies do not provide supplementary pensions.
The average cost of a Defined Contribution plan for a CEO is 20 % of annual fixed salary, and 16 % for other management. The retirement age varies between the ages 60–70 years, most common at 63 years or the age defined by the latest pension legislation.
Chairman of the Board in Finnish listed company earns 60 000 euros
At the median level the Chairman of Board in Finnish listed companies receives an annual fee of 60 000 euros. Vice Chairs receive 48 000 euros and Board members 30 000 euros as an annual fee. The median meeting fee for the Chairman and Vice Chairman is 800 euros and for board members 600 euros.
58 % of all listed companies pay the entire annual fee in cash, and 42 % of the companies pay it as a mixture of shares and cash. When using cash/shares mixture, the cash portion is used to cover taxes and statutory payments. Board and committee meeting fees are typically paid in cash.
Performance-based and transparent remuneration benefits us all
Our remuneration survey aims to provide updated information for company boards and top management to support decision making. We also want to encourage Finnish listed companies to increase performance-based remuneration and more transparent reporting.
Samuli Sistonen & Ville Kämppi
