EUR 1000.00 For Business Accounts Only

Nokian Tyres - AGM 30 March 2021

We note that as a result of the Covid-19 pandemic the AGM will be held as an electronic meeting only. Consequently, it will not be possible to attend the AGM in person.

Under ITEM 8 the board of directors proposes to distribute a dividend per share of EUR 1.20. The (proposed) dividend is covered by FCF (approx. EUR 1.97 per share), but NOT entirely by EPS. On the other hand, we note that Nokian Tyres has a strong balance sheet (solvency of 65%) and a net cash position (EUR 17 million). In addition, we note that dividends distributed for (at least) the past 5 years were (amply) covered by EPS and/or FCF. Therefore, we are currently willing to tolerate a dividend in excess of EPS as it currently does not jeopardize the Company’s financial position. That having been said, we will continue to monitor the situation with utmost interest and reserve the right to oppose to this resolution next year if the Company’s (financial) results have not been significantly improved and/or the board of directors refuses to cut the dividend. Accordingly, we recommend to vote FOR.

Under ITEM 10 approval of the Company's first remuneration report is sought. First of all, we note that the Company’s executive remuneration policy potentially allows for variable payments (350% of annual base salary) in excess of our maximum threshold of 300% of annual base salary. That having been said, we consider the executive compensation in the year under review to be fair. The annual base salary is in line with Finnish market practice. The outcome of the STI appears to be relatively high in relation to the performance measures applicable, but we note that this only relates to the second half of the year so therefore could give a somewhat ‘blurred’ picture. Total (maximum) variable remuneration furthermore is predominantly LT oriented, with a maximum LTI (250% of annual base salary) in excess of the STI (100% of annual base salary). Although we would have welcomed the inclusion of ESG targets under the Company’s executive compensation package, we recommend to vote FOR.

Under ITEM 14 approval of the auditors' fees is sought. In view of the substantial amount of non-audit fees, we recommend to vote OPPOSE.

Finally, under ITEM 15, it is proposed to newly appoint Ernst & Young as the Company's external auditor. We note that, based on a tender process, a change of auditor is proposed. We favour a regular change of auditor (our guidelines stipulate a term of maximum 20 years (10 + 10 years, if a tender is undertaken) and deem the proposed change sufficiently motivated. Accordingly, we recommend to vote FOR.