In accordance with its remuneration policy, Kempower targets to reward its executives in a way that encourages and commits them to execution of the Company’s strategy and the creation of shareholder value. Rewarding and remuneration development are assessed on the basis of the Company’s success, general economic development and the industry’s remuneration practices. In addition to a fixed salary, the key remuneration principle is performance-based variable compensation elements. Kempower’s total remuneration consists of the following:

• Annual base salary
• Short-term incentive (STI)
• Long-term incentive scheme (LTI)
• Other financial benefits

During the financial year 2024, the remuneration policy was followed in the remuneration of the Board of Directors and the CEO. With regard to the performance bonus paid to the CEO during 2024, which was however based on the 2023 financial period, the terms of the previous bonus system based on the achievement of 2023 goals was followed. The matter is also discussed in more detail below in section 3. It was not resolved to defer, deny, or recover all or part of the remuneration of the members of the Board of Directors or the CEO.

Kempower Corporation’s Annual General Meeting decided on March 27, 2024 that the Chair of the Board will be paid EUR 100,000 per year, the Deputy Chair EUR 80,000 per year and the other members of the Board EUR 60,000 per year. Entitlement to the Board’s annual fee accrues over time and is paid in equal monthly instalments (annual fee / 12). In addition, a separate meeting fee is paid to the members of the Board of Directors for attending a meeting as follows:

• the meeting fee is EUR 700 per meeting if the meeting is held in the home country of the member of the Board of Directors or if the meeting is a virtual meeting,
• the meeting fee is double (EUR 1,400) per meeting if the meeting is held on the same continent as where the home country of the member of the Board of Directors is located but not in his or her home country, and
• the meeting fee is triple (EUR 2,100) per meeting if the meeting is held on a different continent from where the home country of the member of the Board of Directors is located.

Travel expenses are reimbursed in accordance with Kempower’s travel policy.
In addition, the Chair of the Audit Committee is paid EUR 10,000 per year in addition to the Board fee and the Chair of the Nomination and Remuneration Committee is paid EUR 5,000 per year.
No options, shares or other share-based remunerations have been granted to the members of the Board of Directors for their work as Board members.

No other financial benefits have been paid to the members of the Board of Directors in addition to the annual fee and meeting fees decided by the Annual General Meeting. There are no pension contributions related to the remuneration of the company’s Board of Directors.

CEO’s annual fixed base salary with fringe benefits for 2025 will remain the same as in 2024, EUR 342,000 and the STI percentage for 2025 bonus plan is increased to 60 percent in a target level and 120 percentage in a maximum level. Salary is based on a market comparison with the remuneration of CEOs in similar positions in stock listed companies.

Fees payable in the financial year 2025 based on the financial year 2024

The CEO was part of Kempower’s short – term incentive (STI) plan, under which the performance bonus will be paid in April 2025. Based on the 2024 bonus plan the STI percentage was 50 percent in a target level and 100 percentage in a maximum level. A total amount of approximately EUR 48,843 will be paid to the CEO as a bonus, which corresponds to a fixed base salary of 1.8 months.

The targets of the annual bonus to be paid to the CEO on the basis of the financial year 2024 were based on the Kempower Group’s revenue and order backlog, total weight 70% of targets, North American revenue and order backlog with 15% weight and product gross profit margin with 15% weight of total targets. Both Group’s and North American Revenue and Order backlog targets ended up below minimum threshold, end result being 0%. Product Gross Profit Margin was achieved with maximum 200% result leading to a bonus payout of 15% out of maximum.

Personnel offering

In October 2021, the company carried out a directed share issue made in deviation from the shareholders’ pre-emptive subscription rights to engage personnel of Kempower by issuing 5,789 new shares in a Personnel Offering. The subscription price in the personnel offering was EUR 100.00 per share before the share issue without consideration registered on 26 November, 2021, in which for each existing share, 53 new shares were given. The number of shares to which the CEO subscribed, after the share issue without consideration, was 15,768. The members of Kempower’s personnel including the CEO who participated in the personnel offering have signed a shareholder agreement in which they have, among other things, committed to sell their shares to the company if their employment with Kempower ends in certain situations and committed to a lock-up period based on which they cannot sell, transfer, donate or pledge the shares subscribed by them without a permission granted by the Board of Directors of the company until 31 December, 2024.

Share-based incentive plan 2022-2024 (PSP)

In 2022 the Board of Directors of Kempower decided to establish a new share-based incentive plan for the group’s key employees including CEO. The aim of the plan which is part of LTI remuneration was to align the objectives of the shareholders and key employees for increasing the value of the company in the long-term, to commit the key employees to work for the company and to offer them a competitive incentive scheme that is based on earning and accumulating shares.

The Performance Share Plan 2022–2024 consists of a three year performance period, covering the financial years of 2022–2024.
During the performance period 2022-2024, the rewards are based on the Total Shareholder Return of the Kempower share in 2022-2024 and Group Revenue in 2024. The value of the maximum rewards to be paid on the CEO will correspond to a total of approximately 14,000 Kempower’s shares including also the cash proportion. The final achievement of the plan after the performance period is 64% of the maximum allocation.

Share-based incentive plan 2023-2025 (PSP)

In 2023 the Board of Directors of Kempower decided to continue share-based incentive plan with new three-year period 2023-2025. The aim aim of the plan which is part of LTI remuneration is to align the objectives of the shareholders and key employees for increasing the value of the company in the long-term, to commit the key employees to work for the company and to offer them a competitive incentive scheme that is based on earning and accumulating shares. The program is for company’s management and key employees.

The Performance Share Plan 2023–2025 consists of a three year performance period, covering the financial years of 2023–2025. During the performance period, the rewards are based on the Total Shareholder Return of the Kempower share in 2023-2025 and Group Revenue in 2023-2025. The value of the maximum rewards to be paid on the CEO will correspond to a total of approximately 12,400 Kempower’s shares including also the cash proportion.

Share-based incentive plan 2024–2026 (PSP)

In December 2023 the Board of Directors of Kempower decided to continue share-based incentive plan with new three-year period 2024-2026. The aim of the plan which is part of LTI remuneration is to align the objectives of the shareholders and key employees for increasing the value of the company in the long-term, to commit the key employees to work for the company and to offer them a competitive incentive scheme that is based on earning and accumulating shares. The program is for company’s management and key employees.

The Performance Share Plan 2024–2026 consists of a three year performance period, covering the financial years of 2024–2026. During the performance period, the rewards are based on the Absolute Total Shareholder Return of the Kempower share in 2024-2026, Group Revenue in 2024-2026 and Co2 emission reduction / Revenue in 2024-2026. The value of the maximum rewards to be paid on the CEO will correspond to a total of approximately 14,000 Kempower’s shares including also the cash proportion.

Share-based incentive plan 2025–2027 (PSP)

In February 2025 the Board of Directors of Kempower decided to continue share-based incentive plan with new three-year period 2025-2027. The aim of the plan which is part of LTI remuneration is to align the objectives of the shareholders and key employees for increasing the value of the company in the long-term, to commit the key employees to work for the company and to offer them a competitive incentive scheme that is based on earning and accumulating shares. The program is for company’s management and key employees.

The Performance Share Plan 2025–2027 consists of a three year performance period, covering the financial years of 2025–2027. During the performance period, the rewards are based on the Absolute Total Shareholder Return (TSR) of the Kempower share in 2025-2027, Group Revenue in 2025-2027 and CO2 emission reduction / Revenue. The value of the maximum rewards to be paid will correspond to a total of approximately 675,000 Kempower’s shares including also the cash proportion.

Employee Share Savings Plan

In 2023 the Board of Directors of Kempower decided to establish an Employee Share Savings Plan for all Kempower and its subsidiaries’ employees. The objective of the Employee Share Savings Plan is to offer the employees of Kempower Group an opportunity to invest a part of their regular salary in Kempower shares. By encouraging the employees to purchase and own the Company’s shares the Company is pursuing to strengthen the connection of interests between the employees and the shareholders, and to increase the employees’ motivation and commitment to the company.

The Employee Share Savings Plan consists of annually commencing plan periods, each one comprising of a 12-month savings period and a holding period following the savings period. The ESSP is offered to all Kempower employees and management in countries where there are no legal or administrative constraints for participation. The employees will have an opportunity to save a proportion of their salaries consistently and invest those savings in Kempower shares. After a three year savings period the Company rewards for the commitment by granting the participating employees a gross award of one matching share for every two (2) savings shares acquired with their savings.

Restricted Share Unit Plan 2024-2027

In December 2023 the Board of Directors of Kempower resolved to establish a Restricted Share Unit Plan for selected key employees of the group. The purpose of the plan is to align the interests of the company’s shareholders and key employees to increase the company’s value in the long-term, to commit key employees at the company and to offer them a competitive incentive plan based on receiving the company’s shares.

The plan is intended to be used as a tool in situations seen necessary by the Board of Directors, for example ensuring retention of key talents to the company, attracting a new talent or other specific situations determined by the Board of Directors.
The Board of Directors may allocate rewards from the Restricted Share Unit Plan 2024—2027 during financial years 2024—2027. The value of the rewards to be allocated during 2024 on the basis of the plan corresponds to a maximum total of 20,000 shares of Kempower, including also the proportion to be paid in cash. In February 2025 the Board of Directors decided to increase the maximum allocation up to 100,000 shares.

The rewards will be paid by the end of May 2027, 2028, 2029, 2030 or 2031, but always so that there is at least three (3) years between the determination and the payment of the reward. The reward is based on a valid employment or director contract and on the continuity of the employment or service.