Proposals by the Board of Directors
Use of the profit shown in the Balance Sheet and deciding on the payment of dividend
The Board of Directors proposes to the AGM that a dividend of EUR 0.92 per share be paid on the basis of the approved balance sheet for 2019 plus an extraordinary dividend of EUR 0.10 per share. The dividend shall be paid in two installments.
The first installment of dividend, EUR 0.46 per share, will be paid to shareholders registered in the shareholders’ register of the Company maintained by Euroclear Finland Ltd on the record date for the first dividend installment, which shall be Thursday, 9 April 2020. The Board proposes to the AGM that the first dividend installment would be paid on Monday, 20 April 2020.
The second installment of dividend, EUR 0.46 per share and the extraordinary dividend of EUR 0.10 per share will be paid to shareholders registered in the shareholders’ register of the Company maintained by Euroclear Finland Ltd on the record date for the second dividend installment and the extraordinary dividend, which shall be Tuesday, 13 October 2020. The Board proposes to the AGM that the second dividend installment and the extraordinary dividend would be paid on Tuesday, 20 October 2020.
The Board of Directors is authorized to set a new dividend record date and payment date for the second installment of the dividend and the extraordinary dividend, in case the rules and regulations on the Finnish book-entry system would be changed, or otherwise so require.
Authorizing the Board of Directors to decide the buyback of Company shares
The Board proposes that the AGM should authorize the Board to purchase Company shares ('Buyback authorization') under the following terms:
Under this buyback authorization, the Board shall be authorized to decide the purchase of and/or take as security a maximum of 23,000,000 Company shares using the Company's unrestricted equity. The number of shares shall be equivalent to approximately 2.99% of the Company's total shares.
Shares may be purchased in one or more lots. The purchase price shall be at least the lowest price paid for Company shares in regulated trading at the time of purchase and no more than the highest price paid for Company shares in regulated trading at the time of purchase. In connection with the buyback of Company shares, derivative, share lending, or other agreements that are normal within the framework of capital markets may take place in accordance with legislative and regulatory requirements and at a price determined by the market. The authorization shall allow the Board to decide to purchase shares otherwise than in proportion to shareholders' current holdings (directed buyback).
Shares so purchased can be used as consideration in possible acquisitions or in other arrangements that are part of the Company's business, to finance investments, as part of the Company's incentive program, or be retained, conveyed, or cancelled by the Company.
The Board of Directors shall decide the other terms related to the buyback of Company shares. The buyback authorization shall remain in force for eighteen (18) months from the decision taken by the AGM.
Authorizing the Board of Directors to decide on share issue
The Board proposes that the AGM would authorize the Board to decide on share issue under the following terms:
Under the authorization, the Board shall be authorized to take one or more decisions on the issuance of new shares and/or the conveyance of treasury shares held by the Company, provided that the number of shares thereby issued and/or conveyed totals a maximum of 23,000,000 shares, equivalent to approximately 2.99% of all the Company's shares.
The new shares may be issued and/or the treasury shares held by the Company may be conveyed to the Company's shareholders in proportion to the shares they already own or through a directed share issue that bypasses shareholders' pre-emptive rights if the Company has a weighty financial reason for doing so, such as using the shares in question as consideration in possible acquisitions or in other arrangements that are part of the Company's business, to finance investments, or as part of the Company's incentive program.
The new shares may be issued and/or the treasury shares held by the Company may be conveyed against payment or free of charge. A directed share issue may only be made free of charge if there is a particularly weighty financial reason, in respect of the Company's interests and those of all its shareholders, for doing so. The new shares may also be issued free of charge to the Company itself.
The Board shall decide on other terms and conditions of share issue. The authorization shall remain in force until 30 June 2023. The authorization shall revoke the authorization granted by the AGM on 2 April 2019 to the Board to decide on the conveyance of treasury shares.
Deciding the remuneration of the Auditor
The Board proposes, on the recommendation of the Audit Committee, to the AGM that the Auditor's fee shall be paid as invoiced and approved by the Company.
Election of the Auditor
The Board proposes, on the recommendation of the Audit Committee, that the AGM would elect PricewaterhouseCoopers Oy, Authorized Public Accountants, as the Company's Auditor. PricewaterhouseCoopers Oy has announced that it will appoint Mr. Markku Katajisto, Authorized Public Accountant, as the principally responsible auditor. The Auditor's term of office shall end at the closure of the next AGM.
Espoo, 6 February 2020
Board of Directors
Shareholders' Nomination Board's proposal for the composition of Neste's Board of Directors
The Shareholders' Nomination Board, established by Neste Corporation's Annual General Meeting (AGM) on 4 April 2013, proposes to the AGM to be held on 7 April 2020 that Neste’s Board of Directors shall comprise the following members:
The Nomination Board proposes that Mr. Matti Kähkönen shall be re-elected as the Chair of the Board of Directors. In addition, the current members of the Board Ms. Sonat Burman-Olsson, Ms. Martina Flöel, Mr. Jean-Baptiste Renard, Mr. Jari Rosendal, and Mr. Marco Wirén are proposed to be re-elected for a further term of office. The Nomination Board proposes that Mr. Wirén shall be elected as the Vice Chair of the Board.
The Nomination Board further proposes that the Board of Directors shall have eight members and that Mr. Nick Elmslie and Ms. Johanna Söderström shall be elected as new members. A brief presentation of the proposed new members is attached to this release.
All of those concerned have given their consent to serving on the Board and are considered to be independent of the company and its major shareholders.
“Taking into account the development of Neste’s strategy, the Nomination Board has evaluated that the proposed Board of Directors has versatile knowledge and experience in leading and developing international business. This proposal also reflects the long-term and consistent target of renewing the Board, regardless of the current Board's excellent success,” says Mr. Kimmo Viertola, Chair of the Nomination Board.
Out of the present members, Elly Burghout and Willem Schoeber will leave Neste’s Board of Directors at the end of the AGM in April. “Elly’s and Willem’s contribution to the Board and its committees has been strong and valuable. I wish to warmly thank them for their excellent work for Neste,” Viertola says.
The annual fees of Neste’s Board of Directors were last increased in 2008. According to an independent expert report, the fees of Neste’s Board have fallen significantly below market levels during this period. According to the Remuneration Policy prepared by the Neste Board, the fees of the Board should be at international and competitive market level. The Shareholders’ Nomination Board supports this view.
The Shareholders’ Nomination Board considers that the Board fees have fallen significantly below current market levels. To achieve the market level, a step-by-step plan, supported by the major shareholders, to increase Board remuneration must be developed by the end of 2020. As the Finnish State's position on the development of the remuneration is still in progress, the Shareholders' Nomination Board did not reach a unanimous proposal, and consequently did not make a proposal for the remuneration to be paid to the Board of Directors for their following term of office. The Chair of the Nomination Board has notified the Nomination Board and the Company that the State of Finland will make a proposal at the AGM for the remuneration as follows:
- Chair: EUR 67,900 per annum (currently EUR 66,000)
- Vice Chair: EUR 49,600 per annum (currently EUR 49,200)
- Member: EUR 35,700 per annum (currently EUR 35,400)
- Chair of Audit Committee: EUR 49,600 per annum if he or she does not simultaneously act as Chair or Vice Chair of the Board
In addition to the annual fee, members of the Board of Directors would receive a meeting fee of EUR 600 for each meeting held in the member's home country and EUR 1,200 for each meeting held in another country, plus compensation for expenses in accordance with the Company's travel guidelines. The meeting fee for telephone meetings would be paid according to the fee payable for meetings held in each member's home country.
The Shareholders' Nomination Board was appointed on 18 September 2019. In accordance with a decision made by the AGM, the Nomination Board consists of representatives of the company's three largest shareholders, as of the first weekday in September: Director General Kimmo Viertola of the Government Ownership Steering Department in the Prime Minister’s Office of Finland (the Chair); Executive Vice-President Reima Rytsölä of Varma Mutual Pension Insurance Company; President and CEO Jouko Pölönen of Ilmarinen Mutual Pension Insurance Company and Matti Kähkönen, the Chair of Neste's Board of Directors.
The Nomination Board was unanimous in its proposals for the Board's composition and the number of members in the Board. As Chair of the Board of Directors, Matti Kähkönen did not take part in the decision-making on the Nomination Board's proposal related to the Chair of the Board, nor did he participate in the handling of the matter relating to the remuneration to be paid to the Board of Directors.
Relevant information on all those proposed for Board service can be found at www.neste.com.
Espoo, 31 January 2020
Shareholders' Nomination Board