The Board of Directors nominates the CEO and his/her possible deputy and decides on the CEO's terms of service, including base salary, fringe benefits, pension benefits and incentive schemes. The Remuneration Committee of the Board determines and approves the terms of service, including salaries, bonuses, pension benefits and other benefits, of the Outokumpu Leadership Team members other than the CEO.
The compensation of the CEO and the members of the Leadership Team consist of base salary, fringe benefits, short-term incentives, share-based long-term incentives and pension arrangements. The total compensation is reviewed regularly by the Board of Directors. The review includes benchmarking the different components of total remuneration to market practices in corresponding positions.
The principles for remuneration include shareholder value creation as the underlying focus of the reward strategy, competitive remuneration, business strategy aligned incentives, and pay for performance.
Sustainability in all its aspects continues to be at the core of our operations. Following the definition of our long-term ambitions for diversity, equity, and inclusion in 2022, in 2023 we introduced a diversity target in our short-term incentive plan, for all key leaders except the CEO. CO2 emission reduction also remained a key target in our long-term incentive program, the Performance Share Plan.
Going forward, we will continue to review our remuneration framework to ensure they support value delivery for our stakeholders.