Year 2014
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Remuneration

 

We want to reward our employees for good performance and we believe that fair remuneration motivates people to excellent performance. Therefore, remuneration and its fairness are important to us, and we aim to continuously develop the process to be more transparent.

We apply and observe the requirements of local employment legislation and collective bargaining agreements that determine things such as minimum wages and supplements such as overtime pay wherever we operate.

In order to be able to help their team members in remuneration issues, the managers are kept informed about local collective bargaining agreements and remuneration systems as part of their management training.

Overall remuneration at Neste Oil covers elements such as the following:

Basic salary: monthly salary and agreed supplements

Flexible component: performance incentives, recognition for excellent performance, share-based incentives, Personnel Fund (in Finland)

Additional benefits: fringe benefits, health care, insurance cover, other benefits

Career development opportunities: training and professional development, feedback, and recognition.

Transparency and uniformity are highlighted in new remuneration principles

Neste Oil's Group-wide employee remuneration principles were updated during 2013, and they were used for the entire year in 2014 for the first time.

With the remuneration principles, we promote implementation of the company’s strategy, encourage personnel to perform well in their jobs and pay increasing attention on the transparency of remuneration and uniformity of the principles. These principles are applied wherever Neste Oil operates within the framework of local collective bargaining agreements, national labor markets, and the local competitive environment. The new remuneration principles support the implementation of the new Way Forward way of working introduced in 2013.

Read more about Way Forward.

Neste Oil’s senior executives do not come within the scope of collective bargaining agreements, and are covered instead by senior management remuneration principles.

Learn more about the senior management remuneration principles from our Remuneration Statement 2014.

Updates in remuneration and classifying job descriptions

Neste Oil adopted a system for classifying job descriptions that was revised in 2013, and adopted new job classifications increasing the consistency of remuneration in 2014. The more comprehensive classification and definition of tasks make management work and remuneration assessments easier. We will monitor the new classification and assess its functionality at the end of 2015.

Revised short-term incentive scheme improves transparency and equality

All personnel are covered by Neste Oil’s incentive systems. The main short-term incentive is the annual performance-based incentive system, and its updated version was deployed in 2014. The reform improved both the transparency and equality of remuneration.

The revamped system gives greater emphasis to the Group's overall financial performance, as remuneration is tied to Neste Oil's overall financial performance. The number of personal targets was increased in the remuneration of employees working in specialist duties.

The Personnel Fund represents Neste Oil’s main long-term incentive and covers the Group’s employees in Finland, except for those included in the scope of the share incentive schemes. Currently similar funds do not exist in other countries where Neste Oil operates.

Fringe benefits

In addition to salary, Neste Oil aims to offer its employees competitive fringe benefits in line with local market practices, such as – in the cases of Finland – comprehensive health care, a Personnel Fund, and an insurance fund. The pension arrangement of Dutch employees was revised in 2014 so that the employer will be increasingly liable for the costs in the future. In other respects, employment-related benefits remained unchanged.