The Annual General Meeting of Orthex Corporation approved the company’s amended remuneration policy for governing bodies with an advisory decision on 18 April 2023. When deciding to amend the remuneration policy, the Board of Directors considered the shareholders’ opinions, which were presented in connection with the review of the remuneration policy at the previous general meeting.

The remuneration policy defines the principles and decision-making processes for the remuneration of the members of the Board of Directors and the CEO. The remuneration policy must be presented to the Annual General Meeting at least every four years. The remuneration policy will be presented to the Annual General Meeting 2027 at the latest.

The remuneration report describes the remuneration of the members of the Board of Directors and the CEO during the financial year. In addition, the remuneration report compares the development of the remuneration of the Board of Directors and the CEO with the development of the employees’ average remuneration and the company’s financial development over the past five years. The Annual General Meeting takes annually an advisory decision on the remuneration report. The 2023 remuneration report was unanimously approved with an advisory decision taken at the Annual General Meeting on 9 April 2024.

Remuneration of the Board of Directors 

The general meeting decides on the remuneration to be paid to the members of the Board of Directors based on a proposal prepared by the company’s Shareholders’ Nomination Board.

As proposed by the Shareholders’ Nomination Board, the Annual General Meeting 2024 resolved that the remuneration of the members of the Board of Directors remain the same and that the Chair of the Board of Directors be paid a monthly fee of EUR 4,000 and other members of the Board a monthly fee of EUR 2,000. It was further resolved that reasonable travel and other expenses related to the Board work will be reimbursed in accordance with the company’s travel rules.

The Board fees are paid monthly in cash. The members of the Board of Directors do not receive any other financial benefits.

The remuneration paid to the members of the Board of Directors in 2023 is presented in the Remuneration report 2023 (available above).

Remuneration of the CEO

The Board of Directors decides on the remuneration of the CEO. The CEO’s remuneration consists of a monthly payable fixed base salary with fringe benefits and an annually payable variable short-term incentive. Orthex does not currently have any long-term share-based or other incentive schemes, as members of the company’s management team own a significant portion (approx. 17%) of the company’s shares. For this reason, the company’s Board of Directors has also not defined any principles regarding the ownership of shares.

Incentives under annually commencing short-term incentive plans are discretionary and tied to Orthex’s results of operations and the achievement of relevant performance metrics and/or individual performance targets. The terms and objectives of the incentive plan, including performance metrics and weights, are determined, and approved annually in advance by the company’s Board of Directors.

The salaries, incentives and fringe benefits paid to the CEO in 2023 are presented in the Remuneration report 2023 (available above).

In 2023, the metrics and weights of the CEO’s short-term incentive plan were as follows: profitability 50%, turnover 35%, sustainability 15%. During the financial year 2023, the maximum amount of the CEO’s incentive corresponded to seven months’ gross base salary.

The CEO participated in the company’s short-term incentive plan 2023. The CEO’s earned short-term incentive for 2023 was 50% of the annual maximum short-term incentive. The performance-based incentive for the year 2023, EUR 125,748, will be paid in April 2024.

The CEO’s earned short-term incentive for 2022 was 5% of the annual maximum short-term incentive. The performance targets set for the company’s short-term incentive plan 2022 were mostly not achieved. The performance-based incentive for 2022 amounting to EUR 11,900 was paid in April 2023.

In 2023, CEO Alexander Rosenlew’s fixed base salary including fringe benefits totalled EUR 28,520 per month. As of 1 December 2023, the CEO’s fixed base salary including fringe benefits totals EUR 30,500 per month.

Other main terms and conditions of the CEO contract

The mutual notice period for the CEO’s contract with Orthex is six months, and the CEO has an obligation to work during the notice period, unless Orthex releases the CEO of the obligation. If Orthex releases the CEO of his work obligation during the notice period, Orthex’s obligation to pay salary will end as well.

If the company terminates the CEO contract, the CEO is, under certain conditions, entitled to a severance pay corresponding to twelve months’ monthly salary.

The CEO is entitled to a statutory pension. The CEO’s pension and retirement age are determined on the basis of the Finnish Employees’ Pension Act. The CEO does not have any supplementary pension insurance paid by the company.

Remuneration of the Management Team

The company’s Board of Directors decides on the remuneration of the members of the management team and the criteria for it based on a proposal prepared by the CEO. The remuneration of the members of the management team consists of a monthly payable fixed base salary with fringe benefits and an annually payable variable short-term incentive.

In 2023, the metrics of the short-term incentive plan for the members of the management team were turnover, profitability, and sustainability and the maximum amount of the incentive corresponded to the management team member’s four-month gross base salary.

The salaries, incentives and fringe benefits paid to the management team (excluding the CEO) in 2023 are presented in the table below. The incentives paid in 2023 are based on the 2022 short-term incentive plan. The incentives paid in 2022 are based on the 2021 short-term incentive plan.

Remuneration of the management team 2023

EUR thousand	2023	2022
Salaries and fringe benefits	1,051	837
Incentives	80	140
Other financial benefits	–	–
Severance pay	–	90
Total	1,131	1,067

Other main terms and conditions of the executive contracts of the members of the management team

The notice period for the executive contracts of the members of the management team is eight months if the company terminates the contract and four months if the management team member terminates the contract. Orthex has the right to release a management team member from work obligation during the notice period. A management team member’s obligation to work is at most four months, regardless of which party terminates the contract.

The management team members are entitled to local statutory pension benefits. They do not have any supplementary pension insurances paid by the company.