Remuneration

 The Annual General Meeting annually determines the emoluments payable to the members of the Board of Directors for Board and committee work. The Shareholders' Nomination Board prepares the proposals concerning the remuneration of the Board of Directors.

Key Remuneration Principles

In accordance with the resolution of the Annual General Meeting on 21 March 2024 the annual fees to be paid to the members of the Board are as follows: Chairman EUR 70,000, Vice Chairman EUR 47,000 and the ordinary members EUR 35,000.

The fees shall be paid so that 40% of the annual fee is paid in Lassila & Tikanoja plc's shares held by the Company or, if this is not feasible, shares acquired from the market, and 60% in cash. Shares are to be issued to Board members and, where necessary, acquired directly from the market on behalf of Board members on the third trading day after the publication of Lassila & Tikanoja plc’s interim report for the first quarter.

In addition, the following meeting fees will be paid: Chairman EUR 1,000, Vice Chairman EUR 700 and the ordinary members EUR 500 per meeting.

Meeting fees will also be paid to the Chairman and to the members of committees established by the Board as follows: Chairman EUR 700 and the ordinary members EUR 500.

None of the members of the Board of the Directors is employed by the Company or company belonging to the same group of companies with the Company or acts as the Company’s advisor, and thereby they receive no salary, pension benefits, other financial benefits associated with employment or service, or other emoluments or fees not associated with Board work from the Company. The members of the Board are not included in the Company’s share-based incentive schemes and they do not have any pension contracts with the Company.

The Board of Directors decides on the remuneration and financial benefits payable to the President and CEO. Before decision-making by the Board of Directors, the matter is prepared by the Personnel and Sustainability Committee of the Board.

Key Remuneration Principles

The remuneration of the President and CEO consists of a fixed monthly salary and benefits and a separate annually decided short-term incentive. In addition, the President and CEO is included in the share-based incentive scheme, which serves as a long-term incentive scheme. The short-term incentive scheme and the share-based incentive scheme that serves as a long-term incentive scheme constitute the variable components of the President and CEO’s remuneration.

Short-term Incentive Scheme

In the financial year 2024, the short-term incentive fee is based on the group's result and the strategic goals defined by the board as follows: the group's operating profit with a weighting of 70 percent, the improvement of working capital with a weighting of 20 percent, and the personnel recommendation index (eNPS) with a weighting of 10 percent.

The incentive bonus corresponds to seven months’ salary at a maximum. The objectives of the short-term incentive scheme are set – and their achievement assessed – annually.

Any incentives are usually paid in February of the year following the earnings period typically spanning a calendar year. The precondition for payment is that the President and CEO is employed by the Company at the time.

Long-term Incentive Scheme

The President and CEO’s long-term incentive scheme is the Company’s share-based incentive scheme. The Board of Directors decides on the share-based incentive scheme as part of the overall incentive and commitment scheme. The Board of Directors decides on the earning criteria for each earnings period based on the Personnel and Sustainability Committee’s proposal. The final numbers of shares issued based on meeting the earnings criteria are decided by the Board of Directors at the beginning of the year following the earnings period.

Rewards are paid in February of the calendar year following the earnings period. The rewards are paid partly as shares and partly in cash.

The precondition for payment is that the President and CEO is employed by the Company at the time. The shares earned on the basis of the one-year incentive program must be owned for at least two years after the payment of the bonus (commitment period). Even after this, shares must be owned for at least half a year's gross salary until the end of the employment relationship. If the CEO resigns on his own initiative during the commitment period, he is obliged to return the shares he received without compensation.

The Board of Directors decided on 14 December 2022 to establish a new share-based transitional phase incentive scheme and a share-based incentive scheme for the Group's key employees for the years 2023–2027.

The transitional phase scheme consists of two (2) earnings periods of one (1) year each, corresponding to the calendar years 2023 and 2024. The earnings period is followed by a two-year commitment period. The possible reward for the earnings period is paid as soon as possible after the end of the earnings period, by the end of May, at the latest. The shares paid as a reward are subject to a two-year (2) commitment period, during which the shares received as a reward may not be sold, transferred, pledged or otherwise used. The share-based incentive scheme for the Group's key employees for the years 2023–2027 comprises three (3) three-year (3) earnings periods covering the calendar years 2023–2025, 2024–2026 and 2025–2027. The reward is paid by the end of May of the calendar year following the earnings period.

The share-based incentive schemes with the year 2024 as the earning period, and the three-year earning period of 2023–2025, 2024-2026 and 2025-2027 are described below:

• A share-based incentive program whose earning period is fiscal year 2024. The basis of the reward is the group's return on invested capital (ROCE) with an 80 percent weighting and the reduction of the carbon footprint with a 20 percent weighting. The maximum amount of remuneration for the CEO is 31,400 shares. For the earning period of financial year 2024, the CEO was paid a long-term incentive bonus of EUR 60,827.68 in fiscal year 2025 (equivalent to 7,382 shares of L&T to be transferred and including a cash part) calculated at the average rate on February 25, 2025.
• The share-based incentive scheme with the financial years 2023–2025 as the earnings period. The reward is based on the Group’s average return on capital employed (ROCE) for 2023–2025 (50% weight), the total shareholder return (TSR) of the Lassila & Tikanoja plc share relative to the stock market index for the Helsinki Stock Exchange (30% weight), and carbon footprint reduction (20% weight). Payment of the rewards under the share-based incentive scheme in question will take place after the three-year earnings period, in 2026. The maximum amount of the CEO's remuneration is 23,600 shares
• A share-based incentive program whose earning period is the financial years 2024–2026. The basis of the reward is the average return on invested capital (ROCE) of the group in the years 2024–2026 with a weight of 50 percent, the relative total return (TSR) of Lassila & Tikanoja Oyj's share compared to the general index of the Helsinki Stock Exchange with a weight of 30 percent, and the reduction of the carbon footprint with a weight of 20 percent. The payment of the share incentive program in question will take place after a three-year earning period in 2027. The maximum amount of the CEO's remuneration is 23,600 shares.
• Share-based incentive program with an earning period of fiscal years 2025-2027. The basis for the reward is the average return on capital employed (ROCE) of the group in 2025-2027 with a weight of 30%, the relative total shareholder return (TSR) of Lassila & Tikanoja Oyj's share compared to the general index of the Helsinki Stock Exchange with a weight of 30%, the reduction of the carbon footprint with a weight of 20%, and the revenue growth in 2025-2027 with a weight of 20%. The payment of this share incentive plan will take place after the three-year earning period in 2028. The maximum reward for the CEO is 55,000 shares.

Other Key Terms and Conditions

A written service contract has been drawn up for the President and CEO. According to the contract, the period of notice is six months should the company terminate the contract, and six months should the President and CEO terminate the contract. In the event that the company terminates the contract, the President and CEO will be paid compensation amounting to twelve (12) months’ salary.

Separate rewards are not paid to the President and CEO for memberships of the Boards of Directors of the Company’s subsidiaries, and the President and CEO receives no remuneration from L&T Group companies other than the parent company.

The President and CEO is not covered by any supplementary pension scheme.

Remuneration and Base Salary

The remuneration of the President and CEO consists of a fixed salary of EUR 473, 939. Short-term and long-term incentive bonuses were paid to the President and CEO in the financial year 2024. Incentive bonuses amounting to EUR 92,565 will become due for payment for the financial year 2024.

The Board of Directors decides on the remuneration and financial benefits payable to the members of the Group Executive Board each year. Prior to the decision-making of the Board of Directors, the matter is prepared by the Personnel and Sustainability Committee of the Board of Directors.

Key Remuneration Principles

The remuneration of the Group Executive Board consists of a fixed monthly salary with fringe benefits and a separate short-term incentive decided upon annually. In addition, the members of the Group Executive Board are covered by a long-term incentive scheme in the form of a share-based incentive plan.

Short-term Incentive Scheme

The short-term incentives of the members of the Group Executive Board are based on the performance of the Group and division, as well as on the achievement of strategic, operational and personal targets. The bonus equals a maximum of 4–4 months’ salary, depending on the responsibilities of the recipient.

The objectives of the short-term incentives are set, and their achievement assessed, annually. Any incentives are usually paid in February of the year following the earnings period typically spanning a calendar year. Payment is subject to the individual being employed by the Company at the date of payment.

Long-term Incentive Scheme

The long-term incentive scheme for the members of the Group Executive Board is a share-based incentive plan. The Board of Directors decides on the earnings criteria for the earnings period and the maximum amounts of the share-based remuneration on the proposal of the Personnel and Sustainability Committee. Rewards are paid in February of the calendar year following the earnings period. The rewards are paid partly as shares and partly in cash.

On December 14, 2022, the Board decided to establish a new transition phase share-based incentive plan for management and a share-based incentive plan for key personnel of the group for the years 2023–2027.

The transition phase plan includes two (2) one-year earning periods, calendar years 2023 and 2024. The earning period is followed by a two-year commitment period. Any potential reward for the earning period will be paid as soon as possible after the end of the earning period, no later than the end of May. The shares awarded as a reward are subject to a two-year commitment period, during which the awarded shares cannot be sold, transferred, pledged, or otherwise used.

The share-based incentive plan for key personnel of the group for the years 2023–2027 includes three (3) three-year earning periods, calendar years 2023—2025, 2024—2026, and 2025—2027. The reward will be paid no later than the end of May following the earning period.

Below are the share-based incentive plans described, with an earning period of fiscal year 2024 and three-year earning periods of fiscal years 2023–2025, 2024–2026 and 2025–2027:

• Share-based incentive program with an earning period of financial year 2024. The basis for the reward is the return on capital employed (ROCE) of the group with a weight of 80% and the reduction of the carbon footprint with a weight of 20%. The earnings period is followed by a two-year commitment period. The shares paid as a reward are subject to a two-year (2) commitment period, during which the shares received as a reward may not be sold, transferred, pledged or otherwise used. 
• Share-based incentive program with an earning period of financial years 2023–2025. The basis for the reward is the average return on capital employed (ROCE) of the group in 2023–2025 with a weight of 50%, the relative total shareholder return (TSR) of Lassila & Tikanoja Oyj's share compared to the general index of the Helsinki Stock Exchange with a weight of 30%, and the reduction of the carbon footprint with a weight of 20%. The payment of this share incentive program will take place after the three-year earning period in 2026.
• Share-based incentive program with an earning period of financial years 2024–2026. The basis for the reward is the average return on capital employed (ROCE) of the group in 2024–2026 with a weight of 50%, the relative total shareholder return (TSR) of Lassila & Tikanoja Oyj's share compared to the general index of the Helsinki Stock Exchange with a weight of 30%, and the reduction of the carbon footprint with a weight of 20%. The payment of this share incentive program will take place after the three-year earning period in 2027.
• Share-based incentive program with an earning period of financial years 2025–2027. The basis for the reward is the average return on capital employed (ROCE) of the group in 2025–2027 with a weight of 30%, the relative total shareholder return (TSR) of Lassila & Tikanoja Oyj's share compared to the general index of the Helsinki Stock Exchange with a weight of 30%, the reduction of the carbon footprint with a weight of 20%, and the revenue growth in 2025–2027 with a weight of 20%. The payment of this share incentive program will take place after the three-year earning period in 2028.

Remuneration and Base Salary of the Group Executive Board in 2024 Financial Year

In 2024, the members of the management team (excluding the CEO) were paid a total annual salary (including cash salary and fringe benefits) of EUR 2,207,700. Performance bonuses totaling EUR 143,329 were paid. Rewards under the share-based incentive plan amounted to EUR 84,555 (excluding the CEO).

Other Key Terms and Conditions

The notice period for the members of the Group Executive Board is six months. The amount of severance pay has not been specified. The old-age pension of the members of the Group Executive Board is subject to the general regulations applicable to employee pensions in Finland (TyEL). The members of the Group Executive Board are not covered by any supplementary pension plan.