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Group Executive Committee (excluding the Group CEO)

Decision-making Procedure Concerning Remuneration

The Board of Directors elects and releases the Group Executive Committee members. The Board of Directors decides, based on the proposal by the Nomination and Remuneration Committee, on the remuneration and other terms of employment or service contract of the Group Executive Committee members as well as the principles by which the Group Executive Committee members are to be compensated. The Board of Directors has authorized the Nomination and Remuneration Committee to decide on the fixed remuneration of the Group Executive Committee members, excluding the Group CEO. The Group CEO makes proposals on the remuneration of the Group Executive Committee members, excluding himself, to the Nomination and Remuneration Committee.

Forms of Remuneration

The remuneration of the Group Executive Committee members is reviewed annually and is based on the Sampo Group Remuneration Principles. The remuneration includes fixed salary, fringe benefits and a supplementary defined contribution or defined benefit pension contract and may also include payments from short-term incentive programs and long-term incentive schemes.

Fixed Salary

Based on the decision by the Nomination and Remuneration Committee, the fixed salary of the Group Executive Committee members, excluding the Group CEO, was on average increased by 3.7 per cent with effect from 1 January 2021.

Fringe Benefits

Based on the employment or service contracts of the Group Executive Committee members, the fringe benefits may include e.g. phone benefit, lunch benefit, car benefit, housing benefit and supplementary insurances.

Short-term Incentives

The Sampo Group companies' Boards of Directors decide on one-year company-specific short-term incentive programs separately each year and on cash payouts from the programs in the following year. The Group Executive Committee members participate in a one-year short-term incentive program, where the payout is triggered by the earnings per share (EPS) of Sampo Group and the outcome is determined on the basis of the Sampo Group result, individual performance, and where applicable, the business area or division result. The maximum amount that can be paid to the Group Executive Committee members from the programs corresponds to nine months' fixed salary. Part of the payout shall be deferred for at least three years as required in the regulatory framework applicable to each Sampo Group company. For 2021, the STI targets of the Group Executive Committee members are divided in to two main parts: i) Sampo Group targets, e.g. value creation and overall performance of Sampo Group (ca. 30-60 per cent weight of total targets) and ii) individual targets, e.g. contribution to development of new business or investment opportunities for Sampo, value creation of associated companies and subsidiaries or key financial and non-financial targets of subsidiaries (ca. 40-70 per cent weight of total targets).

Long-term Incentives

The Board of Directors decides on multiannual long-term incentive schemes based on financial instruments of Sampo plc and on cash payouts from the schemes. The Group Executive Committee members participate in the long-term incentive schemes 2017:1 and 2020:1 for Sampo Group's key employees, where the outcome is determined on the basis of Sampo's share price development over a period of three to five years starting from the issue of the schemes. The payout is divided into three annual instalments of 30 per cent, 35 per cent, and 35 per cent respectively. The Group Executive Committee members have been allocated 778,400 incentive units in the 2017:1 scheme and 1,180,000 units in the 2020:1 scheme.

The value of one incentive unit is calculated as the difference between the trade-weighted average price of the Sampo A share at the time of payment and the dividend-adjusted starting price. In addition to the share price development, the calculation of the value of one incentive unit takes into account the performance of the insurance margin of If P&C and/or the return on capital at risk as further specified in the terms of the respective incentive scheme. The schemes contain a cap for maximum payout.

At payout from the 2017:1 and the 2020:1 schemes, the Group Executive Committee members are obliged to purchase Sampo A shares with 50 per cent of each instalment after deducting income tax and other comparable charges. The shares are subject to disposal restrictions for three years, after which the Board of Directors shall decide on the possible release.

The terms of the long-term incentive schemes

Pension Benefits

In addition to the statutory pension schemes in the country of residence, the Group Executive Committee members are entitled to supplementary pension schemes, of which part are of a defined benefit type and part of a defined contribution type. The Finnish Group Executive Committee members are entitled to a lifetime defined benefit pension from the age of 60. The pension benefit is 60 per cent of the pensionable salary. The pensionable salary includes fixed salary, fringe benefits, holiday pay and short-term incentives and is calculated as an average of two out of the four last full years, where the best and the worst year are left out. The start of the pension can be postponed until the age of 68.

The Swedish Group Executive Committee members are entitled to a defined contribution pension. The premium corresponds to 38 per cent of the fixed annual salary and 25 per cent of the annual paid short-term incentive. The retirement age is 65.

The Norwegian Group Executive Committee members are entitled to a defined contribution pension. For the pensionable salary up to 7.1 G (G = National Insurance basic amount) the premium is 7 per cent and for the pensionable salary between 7.1 and 12 G the premium is 25.1 per cent. The Norwegian pension legislation allows for a flexible retirement age between 62 and 75. For the pensionable salary exceeding 12 G, the Norwegian Group Executive Committee members are covered by a defined contribution pension scheme, which entitles to a temporary pension between the age of 67 and 82 and where the premium is 24 per cent.

Termination of Employment or Service Relationship

The notice period for terminating the employment or service contracts of the Group Executive Committee members is either three or six months if the notice of termination is given by the member. If the notice of termination is given by the employer, the notice period is either six or twelve months. The Group Executive Committee members are entitled to receive salary during the notice period.

In addition, under the terms of the employment or service contracts, part of the Group Executive Committee members may be entitled to severance compensation, provided that the employment or service contract is terminated by the employer. The severance compensation may be between 12 and 24 months' fixed salary depending on the terms of the employment or service contracts. Furthermore, based on the employment or service contracts, part of the Group Executive Committee members may be entitled to compensation during a non-competition period.

The remuneration and other financial benefits paid to the Group Executive Committee members, excluding the Group CEO

Remuneration element 2020 (EUR) 2019 (EUR)
Fixed salary 2,670,499 3,165,836
Fringe benefits 191,953 78,076
Short-term incentives pertaining to 2019 (2018)* 1,284,627 1,090,167
Release of deferred short-term incentives pertaining to 2016 (2015) 717,072 517,831
Long-term incentives** 0 5,294,520
Total  4,864,151 10,146,430
Remuneration from undertakings belonging to the same group 335,775 271,309
Supplementary pension 1,185,285 1,226,189

*Excluding short-term incentives deferred during the respective year. The short-term incentives deferred in 2020 amounted to EUR 390,496 and may be paid out earliest in 2023. The short-term incentives deferred in 2019 amounted to EUR 445,672 and may be paid out earliest in 2022.
**Including share purchases under the terms of the long-term incentive schemes.

The number of Sampo A shares acquired by the Group Executive Committee members, excluding the Group CEO, under the terms of the long-term incentive schemes

Position No. of acquired
Sampo A shares
2020
 No. of acquired
Sampo A shares
2019*
Group Executive Committee, excluding Group CEO 0 34,103

*Subject to disposal restriction until 2022

Updated 16 Sep 2021