Expert Corporate Governance Service (ECGS)
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Huhtamaki - AGM 25 April 2019

In general, Huhtamäki is in compliance with the Finnish regulations relating to the organisation and procedures of the Annual General Meeting.

Under ITEM 10, the Nomination Committee of the Board of Directors proposes to keep unchanged the fixed fees of Board members, but to increase by almost 50% the attendance fees per meeting held by the Board and Committees. We regret that no justifications have been provided for the proposed increase. Also considering that the Company's non-executive fees are at the upper level of Finnish market practice for a company with the size and complexity of Huhtamäki, ECGS recommends to vote OPPOSE.

Under ITEM 15, the Board of Directors seeks authorisation to repurchase own shares representing, together with treasury shares already held, no more than 10% of the share capital. The terms of the authorization are in line with our guidelines, but we note that 100% of the CEO's performance share plan and 50% of his annual cash bonus depend on earnings per share (EPS), and concerns may arise over the possibility to use share buy-backs to increase the executive variable remuneration. Therefore, ECGS recommends to vote OPPOSE.

Under ITEM 16, the Board of Directors seeks authorization to issue shares. In aggregate, the authority requested is limited to 13.0% of the Company's share capital and thereby exceeds ECGS' guidelines. ECGS therefore recommends to vote OPPOSE.

Huhtamaki Oyj

Huhtamaki is engaged in the packaging for food and drink. Co. and its subsidiaries have the following four segments: Foodservice Europe-Asia-Oceania, which provides single and double wall paper cups, paper and plastic plates and bowls, plastic cups, cutlery, and food-to-go packaging; North America, which serves local markets in North America with Chinet® disposable tableware products, foodservice packaging products, as well as ice cream containers and other consumer goods packaging products; Flexible Packaging, which produces packaging and labels; and Molded Fiber, which uses recycled fiber to make egg cartons and trays, fruit trays and cup carriers, as well as other protective packaging.


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