Metsä Board Annual review 2023

METSÄ BOARD Annual review 2023

Remuneration paid to the Board of Directors

Remuneration of the CEO

Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6

REMUNERATION PAID TO THE BOARD OF DIRECTORS AND THE COSTS OF THE BOARD MEMBERS’ PENSION ARRANGEMENTS IN 2023 (IN EUROS)

THE SALARIES AND FEES AND THE COST OF THE SUPPLEMENTARY PENSION ARRANGEMENT PAID TO THE CEO IN 2023 (IN EUROS)

LONG-TERM INCENTIVE YSTEM

Pension insurance contribution (TyEL) 2)

Board meeting fees

Committee meeting fees

2023

Performance period Performance criteria

2020–2022

Strategy and financial targets

Total

Annual remuneration 1)

Base salary, including fringe benefits 1)

545,164 331,049

ROCE 1)

Value creation

Short-term incentive 2) Long-term incentive 3)

Realisation of performance period, %

100

Ilkka Hämälä , Chair

99,000 85,000 67,000 67,000 67,000 67,000 67,000 67,000 67,000

10,400 10,400 10,400 10,400 10,400 10,400 10,400 6,400 6,400 85,600

2,400 2,400 3,200 3,200 2,400 3,200 1,600

18,794 17,907

130,594 115,707 81,625 96,054 94,411 94,149 92,280 87,786 88,542 881,149

1,391,888 2,268,101

Year of reward payment

2023

Jussi Linnaranta , Vice Chair

Total

Restriction period

2 years

Financial development 10 Key figures 12

Hannu Anttila

1,025

Share price on the date of transfer, EUR

8.26

Raija-Leena Hankonen-Nybom 3)

15,454 14,611 13,549 13,280 13,586 12,742

Supplementary defined benefit pension arrangement

520,027

Number of shares delivered

84,576

Erja Hyrsky

Report of the Board of Directors

Mari Kiviniemi Jukka Moisio

1) The base salary includes a company car and phone benefit, as well as extended health, travel and accident insurance coverage. 2) The short-term incentive paid concerns performance in 2022. 3) The long-term incentive paid concerns the 2020–2022 performance period. The short-term incentive paid to the CEO was based on performance in 2022. The maximum level of remuneration available in the short-term incentive system in 2022 was 75% of the fixed annual base salary, account- ing for Metsä Group’s EBIT multiplier. The reward was based on Metsä Board’s operating result (weighting 50%) and the strategic targets defined by the Board of Directors (weighting 50%), as well as the realisation of Metsä Group’s EBIT multiplier. The CEO’s short-term incentive for 2022 was 15% of the overall remuneration paid in 2023, accounting for Metsä Group’s EBIT multiplier. The incentive was paid in March 2023. The 2023 short-term incentive system was based on the same principles as that of 2022. The reward for 2023 will be paid in March 2024.

1) Metsä Board’s and Metsä Group’s three-year average return on capital employed. Furthermore, minimum values have been set for the equity ratio and operating result.

20 72

• Sustainability statement • Sustainability statement assurance report

Mikko Mäkimattila , as of 23 March 2023 Juha Vanhainen , as of 23 March 2023

800

2,400

Yhteensä

653,000

21,600

120,949

Consolidated financial statements

In 2019, Metsä Board’s Board of Directors decided on a long-term perfor- mance-based incentive system for 2020–2024. The system comprises three three-year performance periods. The CEO’s reward can be no more than 210% of the CEO’s fixed annual base salary (a cut-off level 270% of fixed annual base salary). The payment of the reward is followed by a restriction period of approximately two years, during which the CEO cannot transfer or dispose of the shares. The reward is based on the development of Metsä Board Group’s (50%) and Metsä Group’s (50%) return on capital employed (ROCE, %) as determined by the Board of Directors. Minimum levels have also been set for the operating result and equity ratio. The reward paid from the long-term incentive system in 2023 concerned the 2020–2022 performance period of the 2020–2024 performance share plan. The realisation of the performance period 2020–2022 was 100%. The realisation of the long-term incentive was 61% of the CEO’s total remuneration in 2023. The reward for the 2021–2023 performance period will be paid in March 2024. In 2022, Metsä Board’s Board of Directors decided on a new long-term performance-based incentive system for 2023–2027. The system com- prises three three-year performance periods. Each performance period will be followed by a restriction period of approximately two years. The amount of the reward has been limited. The CEO’s reward can be no more than 210% of the CEO’s fixed annual base salary (a cut-off level 270% of fixed annual base salary). The reward is based on the development of Metsä Board Group’s (50%) and Metsä Group’s (50%) return on capital employed (ROCE, %) as determined by the Board of Directors. Minimum levels have also been set for the operating result and equity ratio. The variable pay (short- and long-term incentives) form a significant portion of the CEO’s remuneration. The relative portions of variable pay and the fixed annual base salary are shown in the graph on the left. ■ The cost of the CEO’s supplementary pension arrangement in 2023 The CEO is covered by the supplementary defined benefit pension arrangement, according to which the CEO is entitled to retire at the age of 62. In 2023, the contribution to the supplementary defined-benefit pension arrangement was EUR 520,027. No other financial benefits were paid to the CEO in 2023.

Former members of the Board of Directors Timo Saukkonen , until 23 March 2023

5,600 5,600 11,200

4,000 4,000 8,000

1,600 1,600 3,200

941

12,141 11,200 23,341

78 Notes to the consolidated financial statements 126 Parent company financial statements 129 Notes to the parent company financial statements 142 The Board’s proposal to the Annual General Meeting for the distribution of funds 143 Auditor’s Report 147 Shares and shareholders 151 Ten years in figures 152 Taxes 153 Production capacities 155 Calculation of key ratios and comparable performance measures Corporate governance 157 Corporate governance statement 165 • Board of Directors of Metsä Board 168 • Corporate Management Team of Metsä Board

Veli Sundbäck , until 23 March 2023

Yhteensä

941

1) Approximately half the remuneration has been paid as the company’s B series shares, and approximately half in cash. The cash portion has covered the taxes to be charged from the remuneration. The figures shown in the table do not include the portion of transfer tax paid by the company. 2) Members of the Board arevoluntarily covered by TyEL pension (the Finnish statutory pension system) insurance until they reach the required upper age limit. 3) The Chair of the Audit Committee has also been paid a monthly remuneration of EUR 900 every month.

SHARES 1) DELIVERED TO THE BOARD OF DIRECTORS IN 2023

Member of the Board of Directors

Number of shares delivered

Ilkka Hämälä , Chair

7,465 6,410 5,052 5,052 5,052 5,052 5,052 5,052 5,052

Jussi Linnaranta , Vice Chair

Hannu Anttila

THE DIVISION OF THE CEO’S REMUNERATION INTO A FIXED BASE SALARY, SHORT-TERM INCENTIVE AND LONG-TERM INCENTIVE IN 2023

Raija-Leena Hankonen-Nybom

Erja Hyrsky

Mari Kiviniemi

Mikko Mäkimattila Juha Vanhainen

Jukka Moisio

Base salary, including fringe benefits �� 24% Short-term incentive �� 15% Long-term incentive �� 61%

Total

49,239

1) B shares acquired from public trading on 28 April 2023

170 Remuneration report 174 Investor relations and investor information

172

173

Remuneration report | METSÄ BOARD ANNUAL REVIEW 2023