Proposals by Shareholders' Nomination Board of Fortum to the Annual General Meeting 2026

Fortum’s Shareholders’ Nomination Board has proposed increasing the Board to ten members for the 2026 AGM (from nine), re‑electing eight incumbents and adding two new directors (Mika Anttonen and Emmanuelle Verger‑Chabot); Mikael Silvennoinen is proposed as Chair and Jonas Gustavsson as Deputy Chair while Teppo Paavola will not stand for re‑election. The board fees are being lifted to reach market levels — Chair EUR175,000 (from EUR155,000), Deputy Chair EUR95,000 (from EUR85,000), committee chairs EUR95,000, ordinary members EUR75,000 (from EUR68,000) — with meeting fees unchanged (EUR1,000/meeting; EUR2,000 for travel), and approximately 40% of annual fees to be paid in Fortum shares purchased on behalf of directors after Q1 2026. All nominees are reported independent under the Finnish Corporate Governance Code and the Nomination Board, which includes representatives of the state ownership steering office and major pension funds, frames the changes as completing its remuneration alignment program and strengthening board expertise and shareholder alignment as Fortum advances its low‑carbon strategy.

Analysis

The Shareholders' Nomination Board of Fortum has proposed increasing the Board to ten members for the 2026 AGM (from nine), re-electing eight incumbents and adding two new directors, Mika Anttonen and Emmanuelle Verger-Chabot; Mikael Silvennoinen is proposed as Chair and Jonas Gustavsson as Deputy Chair, while Teppo Paavola will not stand for re-election. The AGM is scheduled for 31 March 2026 and all nominees are reported as independent under the Finnish Corporate Governance Code.

The Nomination Board proposes raising fixed annual fees to reach market level by 2026: Chair EUR 175,000 (from EUR 155,000), Deputy Chair EUR 95,000 (from EUR 85,000), Committee Chairs EUR 95,000 (from EUR 85,000), and ordinary members EUR 75,000 (from EUR 68,000), with meeting fees unchanged at EUR 1,000 (EUR 2,000 for travel). Approximately 40% of the annual fee is to be paid in Fortum shares purchased on behalf of directors within two weeks following the publication of the company’s Q1 2026 interim report, with the company covering purchase costs and transfer tax; if purchases cannot be executed on schedule, fees will be paid later or fully in cash.

Governance implications are positive: proposals are driven by representatives of the state Ownership Steering Department and major pension funds, and the Nomination Board states the 2021 remuneration program target has been achieved. The direct financial impact on earnings is likely modest given the absolute fee levels relative to an integrated Nordic energy company, while the share-based component provides stronger alignment and potential modest near-term share buy support; market signals in the release are neutral with limited market-impact (score ~0.12).

Key Decisions for Investors

• Treat the package as a modestly positive governance development and maintain current positions while awaiting the AGM vote on 31 March 2026,
• Monitor execution of the 40% share-based fee after Q1 2026 for small buy-side support or the risk of increased cash outflow if purchases are deferred and paid in cash,
• Re-evaluate conviction only if the AGM rejects the nominations or remuneration proposal, or if subsequent disclosures show materially higher governance costs or strategic shifts