In its remuneration, Terrafame Ltd (‘Terrafame’ or ‘the company’) abides by the guidelines and principles of the Government Resolution on State Ownership Policy of 13 May 2016.
The management of Terrafame consists of a Board of Directors and a Management Team. The Annual General Meeting of Terrafame decides annually on the remuneration payable to Board members. The Board of Directors decides on the remuneration payable to the Management Team.
Remuneration payable to the Board of Directors and other benefits
Remuneration payable to the Board and its Committee members are paid in cash. Board members have no share incentive plans or share-based compensation plans. They are also excluded from the company's other remuneration or pension plans.
As of 14 August 2015, the Chairman's fee has been EUR 72,000 per year and the meeting fee is EUR 600 per meeting. Since the same date, fees payable to other Board members have been EUR 36,000 per year and the meeting fee has been EUR 600.
Board members were paid a total of EUR 253,800 in monthly and meeting fees for the calendar year 2018. Fees were paid as follows:
|Member||Attendance of Board meetings||Fees per year
in 2018, EUR
|Meeting fees in 2018, EUR||Total remuneration in 2018, EUR|
1) Riitta Mynttinen was elected a member of the Board of Directors by the Annual General Meeting of Terrafame Ltd on 10 April 2018 for a mandate period that commenced on 1 July 2018 so that Mynttinen acted as an observer as from the date of the Annual General Meeting. Pursuant to the resolution by the Annual General Meeting, Mynttinen was paid monthly and meeting fees also for the time period during which she acted as an observer.
Salary, remuneration and other benefits of the CEO and Management Team
Details on the CEO’s terms of employment
Joni Lukkaroinen served as the CEO of Terrafame in 2018. The retirement age of the CEO is 63, and the pension is determined in accordance with the Employees' Pensions Act (TyEL). No supplementary pension arrangements have been made for the CEO.
The CEO's period of notice is six months. If the CEO is given notice by the employer, he shall be paid the equivalent of six months’ salary in addition to his salary paid during the severance period. No other compensation is payable in relation to the termination of the CEO’s employment contract.
Remuneration of the CEO and other members of the Management Team
Salaries paid to the CEO and other Management Team members in 2018 were based on fixed monthly salaries. Aside from mobile phone and internet service benefits, the Management Team members had no fringe benefits, or any defined contribution or other additional pension insurance plan, during 2018.
Salaries and rewards paid to Terrafame Management Team in 2018 amounted to EUR 1,355,517. Of this, the CEO was paid EUR 364,652.
In 2018, Terrafame operated a performance-based bonus scheme for members of the Management Team and other key personnel. The bonus scheme, and the related principles and performance indicators, are determined by the Board of Directors of Terrafame, which also monitors the fulfilment of the targets on whose basis bonuses are awarded. The production and financial performance of Terrafame, and the company’s safety-related goals, serve as indicators for the bonus scheme. In addition, an individual target has been set for each person belonging to the bonus scheme. The targets for the bonus scheme are set so that their achievement supports the long-term development and success of the company in a fundamental manner.
The maximum performance bonus for the CEO is equivalent to 40 percent of his annual salary. The maximum performance bonus for members of the Management Team is equivalent to three months’ salary. For other personnel covered by the performance bonus scheme, the maximum performance bonus is equivalent to two months’ salary.
In 2018, members of the Management Team were paid a total of EUR 123,993 in performance bonuses for 2017, which is equivalent to 8.1 percent of their salaries for 2017. Of this sum, the CEO was paid EUR 42,164, which is equivalent to 12.4 percent of the CEO’s salary.
Terrafame has no incentive schemes for its Management Team or other key employees, aside from its performance-based bonus scheme.
Remuneration of other personnel
Salaries and rewards paid to personnel in 2018 totalled EUR 31.1 million. Salary payment complied with the terms and conditions of the collective agreements of each personnel group.
All personnel have been covered by the safety bonus plan since November 2015. The safety bonus was paid if no lost time accidents occurred in the following functions:
1) mining and materials handling
2) bioleaching and metals production plant
3) maintenance and office.
In September 2018, the remuneration grouping was changed and the new groups were:
1) mining, mobile equipment maintenance, geology and mine planning
2) ore processing and related maintenance
3) reclaiming and related maintenance
4) bioleaching, water management and related maintenance
5) metals production and related maintenance
6) general maintenance (incl. shift maintenance and condition monitoring)
7) administration (incl. stock, logistics, earthwork construction, laboratory).
Safety bonuses of EUR 609,850 were paid in 2018.
A production bonus scheme was introduced for all personnel in February 2017. The bonus is paid on a monthly basis if the production targets for ore and nickel are met. Production bonuses of EUR 429,000 were paid in 2018.