UPM Annual Report 2016

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UPM Annual Report 2016 UPM Annual Report 2016 80 81
In brief Strategy Businesses Stakeholders Accounts Governance
incentives are also paid to other key employees
of the group based on the Deferred Bonus Plan.
The company’s short- and long-term
incentive plans, and the termination payments
and pension benefits of the President and CEO
and other members of the Group Executive
Team, are presented on pages 117-119 of this
report and in the Remuneration Statement,
which is available on the corporate website.
Remuneration of the President
and CEO in 2016
The President and CEO’s annual salary and
other financial benefits are shown in the table
below.
SALARIES AND BENEFITS (EUR 1,000)
2016 2015
Salary 1,049 1,052
Short-term incentives 888 856
Share rewards 3,098 824
Benefits 30 27
Total 5,065 2,759
Income tax withholding *) 2,592 1,381
*) Income taxes withheld from salaries and
benefits and remitted to tax authorities by UPM.
SALARIES AND BENEFITS (EUR 1,000)
2016 2015
Salaries 3,564 3,455
Short-term incentives 1,779 1,733
Share rewards 6,269 1,805
Benefits 231 238
Total 11,843 7,231
Executive management
Jussi Pesonen has been the President and
Chief Executive Officer of UPM-Kymmene
Corporation since January 2004. He has also
been a member of the company’s Board of
Directors since March 2007. The President
and CEO leads the company’s day-to-day
operations in accordance with the instructions
and orders given by the Board of Directors. The
duties and responsibilities of the President and
CEO are presented on the corporate website.
In the operative management of the
company, the President and CEO is assisted by
the Group Executive Team, the Business Area
Boards and the Strategy Team as presented
in the illustration on page 73 of this report.
The Group Executive Team consists of the
executives heading the business areas and the
PRESIDENT AND CEO JUSSI PESONEN
CFO 1) Tapio Korpeinen Heikki Vappula UPM Biorefining
General Counsel Juha Mäkelä Tapio Korpeinen UPM Energy
Strategy Kari Ståhlberg Antti Jääskeläinen UPM Raflatac
Technology 2) Jyrki Ovaska Bernd Eikens UPM Specialty Papers
Human Resources Riitta Savonlahti Winfried Schaur UPM Paper ENA
Stakeholder
Relations 3) Pirkko Harrela Mika Sillanpää UPM Plywood
1) Incl. Finance & Control, Treasury, IR, IT, Sourcing and Real Estate (incl. Finnish forest assets)
2) Incl. Investment Management, R&D, new business development (biocomposites, biochemicals)
3) Incl. Brand & Communications, Environment & Responsibility, Public & Media Relations
Responsibility areas of the members of the Group Executive Team
Members of the Group Executive Team
EXECUTIVE
TEAM MEMBER
SINCE POSITION AT UPM
SHAREHOLDINGS
ON 31 DEC. 2015
SHAREHOLDINGS
ON 31 DEC. 2016
Jussi Pesonen 2001 President and CEO 220,275 304,064
Bernd Eikens 2013 Executive Vice President, UPM Specialty Papers 13,747 26,686
Pirkko Harrela 2004 Executive Vice President, Stakeholder Relations 40,870 58,087
Antti Jääskeläinen (as of 1 July) 2016 Executive Vice President, UPM Raflatac –
Tapio Korpeinen 2008 CFO, Executive Vice President, UPM Energy 54,747 85,355
Juha Mäkelä 2008 General Counsel 37,500 39,717
Jyrki Ovaska 2002 Executive Vice President, Technology 74,269 64,877
Riitta Savonlahti 2004 Executive Vice President, Human Resources 17,803 15,420
Winfried Schaur (as of 8 Feb.) 2016 Executive Vice President, UPM Paper ENA 322
Mika Sillanpää 2013 Executive Vice President, UPM Plywood 11,883 12,845
Kari Ståhlberg 2013 Executive Vice President, Strategy 7,229 16,794
Heikki Vappula 2010 Executive Vice President, UPM Biorefining 17,111 40,067
Total 495,434 664,234
The executives’ biographical details, career histories and positions of trust are presented on pages 84-85 of this report and on the corporate website.
Management
remuneration
The Board of Directors resolves annually on
the remuneration of the President and CEO
and other members of the Group Executive
Team based on the proposals by the
Remuneration Committee. The aim of the
company’s management remuneration is to
promote the company’s long-term financial
success, competitiveness and favourable
development of shareholder value.
The management remuneration comprises
non-variable and variable components.
The variable components are linked to
predetermined and measurable performance
and results criteria, and maximum levels have
been set for the variable components of the
remuneration.
The base salary is paid monthly in cash.
The base salary includes the fringe benefits,
e.g. company car and phone. Short-term
incentives are based on the company’s Short
Term Incentive Plan and they are paid annually
in cash. The amount of the incentive is linked
to the executive’s position and achievement
of annually set targets.
Long-term incentives are based on the
Performance Share Plan targeted at the
President and CEO and other Group Executive
Teammembers, as well as other selected
members of management. The Performance
Share Plan consists of annually commencing
three-year plans, and the incentives are payable
in company shares following a three-year
earning period. The number of payable shares
is linked to the executive’s position and
achievement of annually set targets. Long-term
Remuneration of the Group
Executive Team in 2016
The annual salaries and other financial benefits
of the members of the Group Executive Team
(excluding the President and CEO) are shown
in the table below.
global functions, and it assists the President
and CEO in respect of approving and executing
group-level guidelines and procedures. The
President and CEO chairs the Group Executive
Team. Members of the Group Executive Team
carry the main responsibility for the business
areas and global functions they are heading.
These responsibility areas are presented in the
illustration below.
The Business Area Boards comprise, in
addition to the President and CEO chairing
the boards, the CFO, the EVPs of the global
functions, and the EVP of the business area
in question. The Business Area Boards assist
the President and CEO as regards business-
area-level decision making in matters
pertaining to each business area’s strategy,
budget, business performance, operative
investments, commercial strategies, business
development plans, business and strategic risks,
strategic and organisational changes as well as
HRmatters.
The Strategy Team is chaired by the President
and CEO and its other members are the CFO and
the heads of the strategy, technology and legal
functions. The team assists the President and
CEO in matters pertaining to the preparation
of group strategies, strategic projects, capital
expenditure, M&A and other strategic develop­
ment initiatives for approval by the Board of
Directors.
Members of the Group Executive Team
and their position and shareholdings in the
company are presented in the table below.
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