Below is a description of the remuneration principles of the United Bankers Plc group (hereinafter, the “United Bankers Group”) and the main features of the incentive plan of United Bankers Group’s management. In its remuneration principles and in the payment of remuneration, the United Bankers Group complies with the relevant binding regulation and the interpretations and regulations of the Financial Supervisory Authority concerning remuneration as in force from time to time. Furthermore, the reporting of the United Bankers Group concerning remuneration complies with the regulation governing Finnish listed companies and the 2020 Corporate Governance Code for listed companies, published by the Finnish Securities Market Association.
The Board of Directors of United Bankers Plc (hereinafter, “United Bankers” or the “Company”) has a remuneration committee, which consists of Johan Linder, Tarja Pääkkönen and Lennart Robertsson. The compliance and risk management functions of the United Bankers Group are involved in planning the remuneration principles and practices, with the compliance function overseeing the regulatory compliance of the Company and the United Bankers Group. The compliance function reports remuneration-related matters to the Company’s Board of Directors annually.
On 25 February 2021, the Company’s Board of Directors adopted the updated Remuneration Policy for Governing Bodies, setting forth the principles pertaining to the remuneration of the members of the Company’s Board and the CEO. The remuneration policy was discussed at the 2021 Annual General Meeting of Shareholders, where the Annual General Meeting of Shareholders resolved by an advisory resolution to support the remuneration policy. Additionally, the Company also prepares an annual remuneration report concerning the remuneration of its governing bodies. Links to the above-mentioned documents as well as to other remuneration information can be found at the end of this page.
The Company’s Board of Directors has adopted written general remuneration principles, providing consistent guidance for the remuneration of the management of the group companies and remuneration of the employees. The Board of Directors of each company belonging to the United Bankers Group, encompassed by these remuneration principles, must adopt the general remuneration principles as binding upon itself. Alongside the general principles, the United Bankers Group has in place a share incentive plan adopted by the Company’s Board of Directors, as well as incentive plans specific for each subsidiary and/or function, adopted by the group companies.
The management’s incentive plan is applicable to members of the Company’s Management Team and certain business segment leaders. The CFO of the Group and persons responsible for the Group’s compliance and risk management function are not encompassed by the above-mentioned incentive plan.
The general remuneration principles of the United Bankers Group are aligned with the business strategy adopted by the Company’s Board of Directors, objectives and values of the United Bankers Group, and are consistent with the long-term interests of the Group, in addition to promoting good and effective risk management within the Group. In order to attain the aforementioned objectives as well as to ensure the fairness and gender-neutrality of the remuneration systems, United Bankers Group’s remuneration principles and the actualized remuneration is assessed and examined by the Company’s Board of Directors no less than on an annual basis.
The basis for remuneration applied to United Bankers Group’s management and the Group’s employees includes qualitative criteria to encourage relevant individuals to act in the interests of the clients as well as in accordance with the sustainable development of both the Group and of the companies belonging to same. The Company’s Board of Directors oversees the remuneration of the persons in responsible positions of United Bankers Group’s control functions. The remuneration of a person working in a control function must be determined by the attainment of the targets set for such control, and the remuneration must not be contingent upon the financial results of the business unit the person is overseeing.
The remuneration system of the United Bankers Group consists of both fixed and variable remuneration, geared towards maintaining and facilitating business growth and committing the Group management and other personnel to the long-term development of the Group. Furthermore, the intention is to reward for the attainment of personal targets, as well as for exceptionally commendable work performance, and, hence, reinforce the Group’s competitiveness as an employer.
The remuneration system determines the ratio between fixed and variable remuneration to be applied at any given time, and the level to which the variable remuneration may increase. The proportion of variable remuneration out of the aggregate amount of remuneration is revised annually, separately for each United Bankers group company. In determining the remuneration, attention is paid to ensuring that the fixed remuneration portion determined based on the professional skills, job description and organizational responsibility of the remuneration recipient is sufficiently high so as to prevent any non-payment of the variable remuneration portion from resulting in an unreasonable situation for the remuneration recipient.
In the remuneration system, variable remuneration must be based on an overall assessment of the performance of the remuneration recipient and of the business unit concerned, as well as the overall performance of the Company and the United Bankers Group and their performance development over time. The assessment of performance must consider the economic and other factors, as well as the extent to which the performance or result has materialised in the long term. Consequently, the remuneration recipient’s right to variable remuneration may arise and the remuneration may be paid only if the remuneration recipient has complied with the regulations and guidelines binding upon the United Bankers Group and with the values, operational principles and responsibility targets set by the Group.
When the value of the assets in United Bankers Group’s balance sheet and the off-balance sheet items on average amounts to no more than EUR 100 million during a review period of the preceding four years, the United Bankers Group is not obligated to apply the requirements pertaining to the postponing of the payment of the remuneration and the payment of variable remuneration in anything other than cash, or the requirements concerning additional pension benefits. Nevertheless, the Company’s Board of Directors has resolved that the above requirements shall be applicable to the incentive plan of the Group management. Therefore, in case the amount of variable remuneration of an individual encompassed by the management’s incentive plan exceeds EUR 50 000, the payment of a minimum of 40 per cent of the aggregate amount of the variable remuneration shall be postponed until after the expiration of the vesting period, over a period of the following three (3) years, in equal instalments. Where the variable remuneration exceeds an amount equivalent to 12 months’ fixed salary of the remuneration recipient, the postponement shall apply to 60 per cent of the variable remuneration. The remuneration of an individual encompassed by the management’s incentive plan may, pursuant to the Group’s internal guidelines, be paid out partially in cash and partially in the Company’s shares, or, subject to the regulatory requirements, in other financial instruments linked to the Company’s shares.
Factors taken into account in the amounts of variable remuneration to be paid include, inter alia, the risks known at the time of making the assessment, as well as any forthcoming risks, capital expenditure and the necessary liquidity. Further considerations include ensuring that the aggregate amount of remuneration payable does not become so high as to restrict the reinforcement of the capital base of the United Bankers Group or a group company belonging to same. In order to ensure the above, the Board of Directors of the United Bankers Group may in accordance with the terms and conditions of the remuneration plan resolve upon refraining from paying out such remuneration either in full or in part, in case the payment of such remuneration were to jeopardize the capital adequacy of the Group or of the group company making the payment, and resolve upon the postponement of the payment of the remuneration and on the payment of the remuneration in several instalments.