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Management remuneration

The remuneration of the President and CEO and other members of the Group Executive Team consists of the base salary and fringe benefits, performance-based short- and long-term incentives, and pension benefits. The Board of Directors resolves annually on the remuneration of the President and CEO and other Group Executive Team members based on the proposals by the Remuneration Committee. The Board of Directors also approves the terms and conditions of short- and long-term incentive schemes prepared by the Remuneration Committee. When preparing incentive schemes and annually commencing plans, the committee consults independent advisors.

The aim of the company’s management remuneration is to promote the company’s long-term financial success, competitiveness and favourable development of shareholder value. The remuneration comprises non-variable and variable components. The variable components are linked to predetermined and measurable performance and results criteria, and maximum levels have been set for the variable components of the remuneration.

Base salary and fringe benefits

The base salary is paid monthly in cash. The base salary includes fringe benefits such as company car and phone. In 2026, the base salary for the President and CEO Massimo Reynaudo will amount to EUR 988,000.

Short- and long-term incentives

Short term incentives of the President and CEO and other Group Executive Team members
Performance measures, related targets and weightings regarding President and CEO’s and other Group Executive Team members’ short-term incentives are set annually by the Board for a performance period of one year. These can vary from year to year to align with the Company’s strategic priorities and usually include a balance of financial, strategic, operational, responsibility, safety, individual or other type of measures, provided that in any given year the majority of the measures will be based on financial criteria.

Long-term incentive of the President and CEO and other Group Executive Team members
The President and CEO’s and other Group Executive Team members' long-term incentives are based on the Company’s Performance Share Plan (PSP), which consists of annually commencing individual plans approved by the Board with a minimum performance period of three years. Performance measures, related targets and weightings are set annually by the Board for each commencing plan and can vary from plan to plan to promote the Company’s long-term value creation and financial growth without encouraging excessive risk taking. Measures may include, but are not limited to, financial and share-price related measures, such as total shareholder return. The maximum and actual values of the share rewards indicated in the table represent the gross number of the shares from which the applicable taxes will be deducted before the shares are delivered to the President and CEO or other Group Executive Team member.

Restricted Share Plan (RSP)
In addition to the above mentioned Performance Share Plan (PSP) the Company has a restricted share plan which is used as a complementary share based long-term incentive arrangement and as a commitment instrument for individually selected participants in specific recruitment and retention situations. The Restricted Share Plan is targeted at the President and CEO, the other Group Executive Team members and the other selected members of the senior management. The President and CEO is not eligible to receive a reward from this Plan for retention purposes.

The Restricted Share Plan consists of annually commencing four-year plans within which the participants have the opportunity to receive shares as long-term incentive, subject to the approval of the Board of Directors. Each plan under the Restricted Share Arrangement consists of four consecutive years and is divided into two subsequent periods, that is the grant period and the vesting period. The grant period comprises the first year of each plan during which rewards can be granted to the participants. Vesting period comprises the three-year period following the end of a grant period during which share rewards are delivered in instalments to the participants. The first instalment of the reward shall be delivered no earlier than one year after the date the participant was nominated to the Plan.

No earning criteria is applied for the Restricted Share Arrangement and the delivery of the share reward is subject to the continuation of the employment. Share delivery will be executed by using already existing shares and, therefore, has no dilutive effect.

Remuneration Report 2025

The Remuneration of the President and the CEO

The Remuneration Policy presents the framework and governance for the remuneration of the President and CEO.

Remuneration Policy (adopted by the AGM 4 April 2024)

Pension benefits

Massimo Reynaudo is the President and CEO of UPM-Kymmene Corporation as of January 1, 2024.

The President and CEO’s retirement age is 65 years. The President and CEO has a voluntary pension benefit to supplement the Finnish statutory pension scheme (TyEL). The voluntary pension benefit is arranged through a defined contribution plan. The contribution equals to 20% of the base salary.

In 2025, costs under the Finnish statutory pension scheme for the President and CEO amounted to €207,000 (2024: €220,000). Payments under the voluntary pension plan (defined benefit) amounted to €190,000 (2024: €190,000).

Other members of the Group Executive Team are covered by the statutory pension plan in the country of residence, supplemented by voluntary defined contribution pension plans. Their retirement age is 63–65 years. Executives belonging to the Group Executive Team before January 1, 2010 have fully vested rights corresponding to 100% of the accumulated account. Executives who have become Group Executive Team members after January 1, 2010 are entitled to fully vested rights five years after becoming a member.

In 2025, costs under the Finnish and German statutory pension schemes for the Group Executive Team members (excluding the President and CEO) amounted to €744,000 (2024: €731,000). Payments under the voluntary pension plan amounted to €551,000 (2024: €671,000).

Salary for the notice period and other compensations

The President and CEO and other members of the Group Executive Team are entitled to compensation for the termination of their executive contract in accordance with the compensation provisions of each executive’s contract. Compensations payable under various circumstances are presented in the table below.

If there is a change of control in the company, the President and CEO may terminate his executive contract within three months and other members of the Group Executive Team within one month from closing the takeover.

The President and CEO’s and other Group Executive Team members’ right to short- and long-term incentives in case their executive contract is terminated depends on the terms and conditions of the incentive schemes. As a general rule, the right to incentives requires a valid agreement or contract.