- Note 1 Accounting principles
- Note 2 Critical accounting estimates and judgements
- Note 3 Segment information
- Note 4 Acquisitions and disposals
- Note 5 Other operating income and expense
- Note 6 Personnel expenses
- Note 7 Board and executive remuneration
- Note 8 Net financial items
- Note 9 Income taxes
- Note 10 Depreciation, amortisation and impairment charges
- Note 11 Intangible assets and property, plant and equipment
- Note 12 Biological assets
- Note 13 Equity accounted investments
- Note 14 Available-for-sale investments
- Note 15 Other non-current assets
- Note 16 Inventories
- Note 17 Receivables
- Note 18 Shareholders’ equity
- Note 19 Non-controlling interests
- Note 20 Post-employment benefits
- Note 21 Employee variable compensation and equity incentive schemes
- Note 22 Other provisions
- Note 23 Operative liabilities
- Note 24 Financial risk management
- Note 25 Fair values
- Note 26 Debt
- Note 27 Derivatives
- Note 28 Cumulative translation adjustment and equity hedging
- Note 29 Commitments and contingencies
- Note 30 Principal subsidiaries and joint operations
- Note 31 Related party transactions
- Note 32 Earnings per share and equity per share
Note 7 Board and executive remuneration
|Board remuneration and committee memberships|
|Year Ended 31 December|
|EUR thousand||Cash||Shares||Total||Total||Committee Memberships|
|Board Members at 31 December 2017|
|Jorma Eloranta, Chairman||126||68||194||106||Remuneration, Nomination2,3, Financial and Audit|
|Hans Stråberg, Vice Chairman||66||40||106||76||Remuneration, Nomination2,3|
|Anne Brunila||52||28||80||80||Sustainability and Ethics|
|Hock Goh||48||28||76||70||Sustainability and Ethics|
|Christiane Kuehne||56||28||84||-||Financial and Audit|
|Mikael Mäkinen||56||28||84||84||Financial and Audit|
|Richard Nilsson||62||28||90||96||Financial and Audit|
|Göran Sandberg||48||28||76||-||Sustainability and Ethics|
|Former Board members|
|Gunnar Brock (until 27 April 2017)||-||-||-||194|
|Total Remuneration as Directors1||562||304||866||782|
1 40% of the Board remuneration in 2017 was paid in Stora Enso R shares purchased from the market and distributed as follows: to Chairman 6 012 R shares, Vice Chairman 3 536 R shares, and members 2 475 R shares each. The Company has no formal policy requirements for the Board members to retain shares received as remuneration.
2 Stora Enso’s Shareholders’ Nomination Board has been appointed by the AGM in 2016 to exist until otherwise decided. The Shareholders’ Nomination Board according to its Charter as approved by the AGM comprises of 4 members: the Chairman and Vice Chairman of the Board of Directors, as well as two members appointed by the two largest shareholders (one each) as of 31 August each year.
3 Marcus Wallenberg appointed by FAM AB is Chairman of the Nomination Board. Harri Sailas is the member of the Shareholders’ Nomination Board appointed by Solidium Oy. Jorma Eloranta and Hans Stråberg were appointed as members of the Shareholders’ Nomination Board in their roles as Chairman and Vice Chairman of the Board of Directors.
The Stora Enso Annual General Meeting (AGM) in 2016 established a Shareholders’ Nomination Board to exist until otherwise decided and to annually prepare proposals for the AGM's approval concerning the number of members of the Board of Directors, the Chairman, Vice Chairman and other members of the Board as well as the remuneration for the Chairman,Vice Chairman and members of the Board and its committees.
|Board share interests at 31 December 2017|
|Board Members at 31 December 2017|
|Jorma Eloranta, Chairman||1 150||12 660|
|Hans Stråberg, Vice Chairman||-||35 006|
|Anne Brunila||-||18 384|
|Elisabeth Fleuriot||-||18 384|
|Hock Goh||-||24 167|
|Christiane Kuehne||-||2 475|
|Mikael Mäkinen||-||31 060|
|Richard Nilsson||-||16 517|
|Göran Sandberg||-||2 475|
|Total Shares Held||1 150||161 128|
|1 Board members’ related parties hold no Stora Enso shares.|
|The following Board members also Served in 2017|
|Shares Held when Board Membership Ended||Effective Date of Board Membership Ending|
|Gunnar Brock||78 000||27 April 2017|
Group Leadership Team (GLT) remuneration and share interests
The table below includes the remuneration paid to GLT members during the year, including the shares vested in that year. The company recommends and expects the CEO and GLT members to hold Stora Enso shares at a value corresponding to at least one annual base salary. Stora Enso shares received as remuneration are therefore recommended not to be sold until this level has been reached.
The aggregate cost of remuneration for GLT in 2017 amounted to EUR 11.1 (EUR 9.9) million. The total number of GLT members was twelve (twelve) at year end in 2017. Annica Bresky joined GLT on 1 May, and one GLT member left during the year, Juan Carlos Bueno on 31 May.
In accordance with their respective pension arrangements, GLT members may retire at sixty-five years of age with pensions consistent with local practices in their respective home countries. Contracts of employment provide for six months’ notice prior to termination with severance compensation of twelve months basic salary if the termination is at the Company’s request.
The outcome of the financial targets relating to the Short term incentive programmes for the performance year 2016, and Long term incentive programmes for the performance years 2014 to 2016 were reviewed and confirmed by the Remuneration Committee in the ordinary February meeting, and approved by the Board of Directors in February.
Note 21 Employee variable compensation and equity incentive schemes includes details of incentive schemes and share opportunity programmes for the management and staff of Stora Enso.
|Group Leadership Team remuneration|
|Year Ended 31 December|
|EUR thousand||CEO||Others1||GLT Total||CEO||Others||GLT Total|
|Annual salary4||913||3 583||4 496||934||3 964||4 898|
|Local housing (actual costs)||-||70||70||-||119||119|
|Short Term Incentive programme3||532||643||1 175||499||924||1 423|
|Long Term Incentive programme3||549||1 403||1 952||151||424||575|
|2 014||6 840||8 854||1 604||6 012||7 616|
|Mandatory plans||69||1 029||1 098||64||1 044||1 108|
|Stora Enso voluntary plans||5552||544||1 099||550||625||1 175|
|624||1 573||2 197||614||1 669||2 283|
|Total Compensation||2 638||8 413||11 051||2 218||7 681||9 899|
1 The amounts include payments related to Juan Carlos Bueno until 31 May 2017. Payments related to the new GLT member Annica Bresky are included from 1 May 2017.
2 The CEO participates in the Swedish Executive Pension Plan where pension accruals are unfunded for all participants, the liability is calculated and insured in accordance with Swedish legislation. The unfunded liability for the CEO amounts to EUR 2 049 thousand.
3 Disclosed amounts for Short and Long term Incentives include amounts for executives who were GLT members at the time of the payment in March 2017.
4 Annual salary for executives is disclosed only for the period during which they were GLT members.
Executives other than CEO
Short Term Incentive (STI) programmes for management
GLT members have STI programmes with up to a maximum of 40% or 50% of their annual fixed salary, payable the year after the performance period. 70% of the STI for 2016 and 2017 was based on financial measures and 30% on Individual Key Targets.
Long Term Incentive (LTI) programmes for management
Since 2014, the LTI programmes have had three-year targets and vest in one portion only after three years and the absolute maximum vesting level is 100% of the number of shares granted. Three quarters (75%) of the opportunity under the 2017 programme is in Performance Shares, where the shares are vested in accordance with performance criteria proposed by the Remuneration Committee and approved by the Board of Directors. One quarter (25%) of the opportunity under the 2017 programme is in Restricted Shares, for which vesting is subject to continued employment.
Under the 2017 LTI programme, GLT members (in GLT at year end) can potentially receive 269 386 shares assuming the maximum vesting level during the three-year vesting period (2017-2019) is achieved.
The fair value of employee services received in exchange for share-based compensation payments is accounted for in a manner that is consistent with the method of settlement and is either cash or equity settled as described in more detail in Note 21. For the equity settled part, it is possible that the actual cash cost does not agree with the accounting charges because the share price is not updated at the time of the vesting. The figures in the Group Leadership Team Remuneration table refer to individuals who were executives at the time of settlement.
During the year, the 2014 programme vested in one portion after three years, dependent on Economic Value Added (EVA) for the Stora Enso Group. The number of shares settled on executives (GLT members at settlement date) from previous Restricted Share programmes and Performance Share programmes amounted to 138 388 shares with a cash value at the 1 March 2017 settlement date of EUR 1 403 254 based on the share price at that date.
Chief Executive Officer – Karl-Henrik Sundström
The CEO has been employed since 1 August 2012 and assumed the position as CEO on 1 August 2014. He has a notice period of six months with a severance payment of twelve months salary on termination by the company but with no contractual payments on any change of control. The CEO’s benefits include pension provisions. The CEO’s pension plan consists of a collectively agreed pension plan in Sweden (ITP2) and a defined contribution (DC) top up pension plan. Contributions to the DC plan in the 20-30 interval Income Base Amounts (IBA; one IBA was 61 500 SEK in 2017) is 23%, contributions above 30 IBA are 35% for the salary the CEO had prior to assuming this position and 39% of the salary increase amount received when assuming the position as CEO. The retirement age is sixty-five years.
Short Term Incentive (STI) programme for CEO
The CEO is entitled to an STI programme decided by the Board each year giving a maximum of 75% of the annual fixed salary. The STI for 2016 and 2017 was 70% based on financial measures and 30% on Individual Key Targets.
Long Term Incentive (LTI) programmes for CEO
The CEO participates in 2015, 2016 and 2017 share based LTI programmes. The programmes have three year targets and vest in only one portion after three years. Three quarters (75%) of the opportunity is in Performance Shares, where shares will vest in accordance with performance criteria proposed by the Remuneration Committee and approved by the Board of Directors. One quarter (25%) of the opportunity is in Restricted Shares, for which vesting is only subject to continued employment.
The CEO has the potential to receive up to 81 401 shares under the 2017 LTI programme. The grant value of EUR 825 406 is based on the share price at the grant date and assuming maximum vesting level during the three-year vesting period is achieved. The CEO received shares from previous Restricted Share programmes and Performance Share programmes, which amounted to 54 181 shares with a cash value at the 1 March 2017 settlement date of EUR 549 395 based on the share price of EUR 10.14 at that date.
|Group Leadership Team share interests|
|Executives in Office at the Year End||R Shares Held1||Performance Share Opportunity 2018–20202||
Share Opportunity 2018–20202
|Johanna Hagelberg||4 745||50 396||16 798|
|Kati ter Horst||19 166||79 469||26 490|
|Malin Bendz||13 793||30 400||10 133|
|Ulrika Lilja||16 582||41 816||13 939|
|Annica Bresky||-||25 191||8 397|
|Per Lyrvall3||44 632||61 180||20 393|
|Markus Mannström||25 746||35 580||11 860|
|Noel Morrin||18 092||54 680||18 227|
|Gilles van Nieuwenhuyzen||-||87 369||29 123|
|Seppo Parvi||17 026||62 192||20 730|
|Karl-Henrik Sundström4||114 548||199 584||66 528|
|Jari Suominen||23 068||60 471||20 157|
|Total, Serving Officers5||297 398||788 328||262 775|
1 None of the GLT members holds A shares.
2 Potential shares to GLT members listed here are gross of taxes
3 Spouse holds 1 257 shares.
4 41 700 of the shares are held by a related party (Alma Patria AB).
5 The Company recommends and expects GLT members to hold Stora Enso shares at a value corresponding to at least one annual base salary. Stora Enso shares received as remuneration are therefore recommended not to be sold until this level has been reached.
|The following executive officers also served in 2017|
|Shares Held when GLT Membership Ended||Performance Share Opportunity when GLT Membership Ended1||
Share Opportunity when GLT Membership Ended1
|Effective Date of GLT Membership Ending|
|Juan Carlos Bueno||-||87 083||29 028||31 May 2017|
|1 Unvested Performance and Restricted share awards were forfeited when employment ended.|