Proposals of the Shareholders' Nomination Board to Neste's Annual General Meeting

Neste Corporation, Stock Exchange Release, 18 December 2024 at 9 a.m. (EET)

The Shareholders' Nomination Board, established through a decision of Neste Corporation's Annual General Meeting (AGM), has forwarded to the Board of Directors of the Company its proposals to the 2025 AGM. 

Board Members

The Nomination Board proposes that the Board shall have eight members. The current members John Abbott, Nick Elmslie, Just Jansz, Conrad Keijzer, Pasi Laine and Sari Mannonen are proposed to be re-elected for a further term of office. The Nomination Board proposes that Anna Hyvönen and Essimari Kairisto shall be elected as new members. Matti Kähkönen, the Chair of Neste's Board of Directors, is stepping down from his Board position as planned and will not be available for re-election for the next term of office. The Nomination Board proposes that Pasi Laine shall be elected as the Chair and John Abbott as the Vice Chair of the Board.

In addition to Matti Kähkönen, the current Board member Johanna Söderström has informed that she will not be available for re-election for the next period of office. Eeva Sipilä will start as Neste's CFO no later than 1 May 2025, and will resign from the company's Board before the AGM.  

"The changed market environment and the uncertainties in the global economy and geopolitical situation are strongly reflected in Neste's business and create a need to update the strategy and operational focus areas. The Shareholders' Nomination Board wants to support Neste's transformation journey and has conducted a comprehensive review of the Board of Directors.The Nomination Board proposes that Pasi Laine shall be elected as the Chair, as he has extensive experience in the technology industry and a strong track record in both demanding leadership positions and Board work in stock listed industrial companies," says Maija Strandberg, Chair of the Shareholders' Nomination Board and Director General at the Prime Minister's Office.

"Matti Kähkönen has been a member of Neste's Board since 2017 and the Chair since 2018. During this time, Neste has grown into a significant international player in its field and the world's leading producer of sustainable aviation fuel and renewable diesel. On behalf of the largest shareholders of the company I want to warmly thank Matti Kähkönen for his excellent work in developing Neste over the past eight years. I also want to thank the entire Board and management for their good and active cooperation with the shareholders during the past year. The market and industry changes faced by the company have been significant, and in the new situation, we now hope that the company will be able to focus on implementation of its strategic priorities," Strandberg continues.

"I will hand over the chairmanship of Neste's Board with confidence. Neste has the necessary prerequisites to solve the current challenges. The company has the world's leading renewable product value chain and personnel whose competence and commitment I am convinced of. The excellent level of technical competence and sustainability is deeply rooted in the company, which sets Neste apart from its competitors. I would like to thank Neste's Board and management for their excellent cooperation over the past years and especially in the recent challenging market conditions," says Matti Kähkönen, the Chair of the Board. 

All persons proposed for Board service have given their consent to serving on the Board and are considered to be independent of the Company and its shareholders. A brief presentation of the proposed new members is attached to this release. More information on the persons proposed by the Nomination Board for Board service can be found at www.neste.com.

As regards the selection procedure for the members of the Board of Directors, the Shareholders' Nomination Board recommends that shareholders take a position on the proposal as a whole at the AGM. This recommendation is based on the fact that at Neste, in line with the Nordic governance model, the Shareholders' Nomination Board is separate from the Board of Directors. The Nomination Board, in addition to ensuring that individual nominees for membership of the Board of Directors possess the required competences, is also responsible for making sure that the proposed Board of Directors as a whole also has the best possible expertise and experience for the Company and that the composition of the Board of Directors also meets other requirements of the Finnish Corporate Governance Code for listed companies.

Board Remuneration

The Shareholders' Nomination Board concludes that the present remuneration proposal is part of a program for bringing Board remuneration to market level by 2026 as part of a long-term bringing of Board remuneration to a level comparable to those of peer companies. The Nomination Board annually brings proposals to this effect to the AGM in accordance with the Charter of the Nomination Board.

The proposal by the Nomination Board for remuneration to be paid to the Board members for the next term is as follows (remuneration for 2024 in brackets):

Annual fees:

Board members are paid the following fixed annual fees for the term starting at the end of the 2025 AGM and ending at the end of the 2026 AGM:

• Chair: EUR 165,000 (135,000), 
• Vice Chair: EUR 90,000 (75,000),
• Chairs of the Committees EUR 90,000 (75,000 Chair of the Audit Committee) if the person does not simultaneously act as Chair or Vice Chair; and
• Members: EUR 75,000 (60,000). 

Meeting fees: 

In addition to above mentioned fixed annual fees, the Board members will be paid as follows for participation in Board or committee meetings: 

• EUR 1,000 (1,000) for meetings, or
• EUR 2,000 (2,000 or 3,000, for meetings held outside the same continent as the member's home country) for meeting, if the member travels to the meeting outside his/her home country 
• The meeting fee for meetings held over the telephone or through other means of data communication is paid according to the fee payable for meetings held in the member's home country.
• In addition, compensation for expenses is paid in accordance with the Company's travel guidelines. 

Payment in the form of shares:

Part of the fixed annual fees will be paid in the form of shares in Neste Corporation to be purchased from the markets as follows:

A portion of 40% of the fixed annual fee will be paid in the form of shares and the remainder in cash. Meeting fees will be paid in cash. The shares will be purchased directly on behalf of the Board members within two weeks as of the first trading day of the Helsinki Stock Exchange following the publication of the interim report for the period 1 January to 31 March 2025. If the shares are not purchased and/or delivered based on a reason pertaining to the Company or the Board member, the fee will be in cash in its entirety. The Company is responsible for any transfer tax potentially levied on the purchase.

The Shareholders' Nomination Board's composition and the decision making

The Shareholders' Nomination Board was established on 7 June 2024. It comprises, in accordance with its Charter adopted by the AGM on 27 March 2024, representatives of the three largest shareholders based on the situation on the first weekday of June: Director General Maija Strandberg of the Ownership Steering Department in the Prime Minister's Office of Finland, as the Chair, and Senior Vice President, Investments Timo Sallinen of Varma Mutual Pension Insurance Company and President and CEO Jouko Pölönen of Ilmarinen Mutual Pension Insurance Company, as its members. Matti Kähkönen, the Chair of Neste's Board of Directors, acts as an expert to the Nomination Board. 

The Nomination Board made the above-mentioned proposals unanimously. These proposals will be included in the notice convening the 2025 AGM which will be announced later.

Neste Corporation

Hanna Maula
Senior Vice President, Communications, Sustainability and Public Affairs

Further information: The Chair of the Nomination Board, Director General Maija Strandberg of the Ownership Steering Department in the Prime Minister's Office of Finland tel. + 358 50 407 8423