The transparency gap in Finnish executive compensation
As Finnish listed companies finalize their executive remuneration reports, a stark reality looms: Finland remains a laggard in compensation transparency. Despite the country’s reputation for governance and openness, its executive pay disclosures remain vague, raising concerns among institutional investors and proxy advisors alike.
The principle behind remuneration reporting is simple—investors should have a clear view of how executives are incentivized and how their rewards align with company performance. In markets such as the United States, executive compensation is dissected in precise detail. Yet, in Finland, too many companies treat the governance code’s transparency requirements as a ceiling rather than a floor.
“There is a growing expectation among institutional investors for greater clarity in executive pay structures,” says Ulla Palmunen, Legal Director at Solidium. “The Finnish market has been slow to respond to these expectations, which has led to skepticism from international investors.”
Indeed, Finland’s reluctance to embrace full transparency places it in what some observers term the ‘developing world’ of remuneration disclosure. The lack of clear, comparable, and detailed data frustrates investors, particularly foreign ones, and diminishes Finland’s appeal as an investment destination.
"As one of our portfolio companies at Solidium, Nokia serves as an example of best practice in remuneration disclosure," says Ulla Palmunen. "With its significant base of US shareholders, Nokia has adopted a more detailed approach in describing the incentives structure, setting an example that other Finnish companies would do well to follow. Its level of transparency remains rare in the Finnish market so far, but it demonstrates that higher disclosure standards are both achievable and beneficial."
The ongoing revision of Finland’s corporate governance code presents a critical opportunity. While the updated guidelines may set new minimum standards, forward-thinking companies should not wait for regulation to catch up. Firms willing to proactively enhance disclosure—by clearly outlining performance metrics, weights, targets, and outcomes—will distinguish themselves in the eyes of investors.
Greater transparency is not merely a compliance exercise; it is a fundamental pillar of effective investor relations.
"Transparency is not just about meeting regulatory requirements—it’s about building trust," says Tiina Olkkonen, CEO of IR Partners. "Companies that proactively embrace clearer disclosure don’t just comply; they gain a competitive edge. Investors reward openness with confidence, engagement, and capital. In today’s market, the choice is clear: lead with transparency or risk being left behind."
By committing to higher standards of disclosure, companies can strengthen market confidence, attract international investment, and mitigate the scrutiny that secrecy inevitably brings. As the demand for transparency grows and investor expectations evolve, Finnish firms face a defining moment. The choice is theirs—to lead the way or to be left behind.
