Distinguished shareholders of Neste, ladies and gentlemen. I am the Chairman of the Board of Directors, Matti Kähkönen, and it is my honor to open this annual general meeting of 2023 of Neste Corporation, and warmly welcome you on behalf of the entire board. It is actually very nice to meet you all once again face to face here after several years of the pandemic. I open the meeting in a global situation where the war still continues in Ukraine, and I wish to emphasize that Neste, like many other businesses and private citizens, condemns the attack of Russia violating international law and the principles of human rights. During the past year, visibility into the world economy has been poor. It will remain poor due to high inflation, declined growth expectations, and continuing geopolitical uncertainty.
However, I'm glad to be able to say that in 2022, the company has been successful in its operations in this challenging environment. The members of the Neste Board of Directors are shown in this picture, and the majority of board members are present here. John Abbott, Nick Elmslie, Johanna Söderström, Marco Wirén, Just Jansz, and Eeva Sipilä. Jari Rosendal and Martina Flöel were not able to attend this time. Myself, I have been both the chair of the Personnel and Remuneration Committee and the chair of the Board of Directors, and as a member of the Shareholders' Nomination Board. All board members and our principal auditor, Leenakaisa Winberg, Authorized Public Accountant from KPMG Oy Ab, are independent of Neste Corporation and its major shareholders.
Members of the company's Executive Committee are also present, as well as President and CEO Matti Lehmus, who will later present his business review later in this meeting. The key task of Neste's Board of Directors is to guide the group strategy so that the preconditions for meeting the financial objectives set for the group and creating shareholder value in the long term, while taking into account the expectations of various stakeholders, are taken into account. In 2022, the board elected Matti Lehmus as the company President and CEO starting of 1st of May, 2022. The board focused on the company's long-term strategy by means of, for instance, the continued scale-up of the company's renewables businesses, as well as expanding the company's renewables feedstock platform and production capabilities.
Including also the decision to establish the joint operation with the Martinez Renewables in the US, the final investment decision concerning the Rotterdam expansion, and continuously monitoring the ongoing Singapore expansion project. Feedstock growth-related marketing and advertising and other investment topics were also on the board agenda last year. The board also constantly monitored the company's safety performance, financial performance, risk management, and sustainability. Further, the board closely monitored long and short-term changes of our operating environment and evaluated their impact on business. In particular, on the agenda were high inflation, declined expectations of growth, and geopolitical uncertainty and its impacts. The board also discussed generally competencies and leadership management, as well as matters related to company's management, including changes in senior management that we announced during 2022. The evaluation of board's activities also comprised its own performance and how to manage the growth of international business.
The board in 2022 was facing a very challenging operating environment. Later, I will speak about remuneration and our proposal for dividends during this meeting. Shareholders, ladies and gentlemen, I'd like to thank you for showing your trust in Neste by investing your funds in its shares. I'd also like to thank all you who are present here and those who voted in advance for participating in important decisions belonging to the annual general meeting. I declare the annual general meeting has been opened. I propose that attorney Jukka Laitasalo be appointed the chair of the meeting. Any other proposals? Unless none. I note that Jukka Laitasalo has been nominated as chairperson. I'll give the floor to him. Distinguished shareholders, welcome.
On my behalf, I thank you for the confidence, and I can say that it is pleasant again to be in front of a live audience and not in front of a video camera only. Let's have a good meeting today. Traditional calling the meeting to order, I have the power to call General Counsel of the company, Christian Ståhlberg, to act as the secretary of this meeting. Christian, please come forward.
General housekeeping. The meeting will be held in Finnish. There is simultaneous interpretation into English, and if you need headphones, please turn to the meeting staff, they will provide you with that. It is also possible to follow this AGM online via webcast. If you follow this online, it is not possible to ask questions or make counter proposals, or ask the floor for other comments or vote via the. Following the AGM via the webcast is not considered as participation in the AGM. The agenda, the notice, the remuneration report, and the financial statements are available at the chair's desk, and also the list of shareholders that is required by the Companies Act should be kept here, and you can see it at the Euroclear desk.
If you wish to take the floor today, please state your name and the shareholder you may represent, and the number of your voting card, or the number of your participation card. Should you leave this room during the meeting before it closes, please hand over your voting card to the meeting officials at their reception desk, so that they can update the list of votes accordingly. I would like to ask you to switch off your mobile phones or put them to a silent mode at least for the whole duration of the meeting. The organizers will video record this meeting, so any other photography is not allowed during the meeting. About advance voting. Neste is now using this procedure for the first time.
Shareholders with the Finnish book entry account have been able to exercise their voting right by voting in advance between February 8 and March 20. Shareholders who voted, if there is a vote on the spot and there are shareholders in the meeting who have already voted in advance, but they would like to change their vote as opposed to what they already voted in advance, those shareholders have a possibility to ask for a voting card instead of the participation card under the item in question. You should remember that collecting the voting card, the earlier votes of the shareholders will be annulled on the agenda item and all subsequent points on the agenda.
That on the remaining items, the shareholders should need to vote in the same way as those who have not cast their votes. Nominee registered shareholders have had the opportunity to participate in advance voting via their account managers. All the four account managers representing nominee registered shareholders, i.e., Citibank, Danske Bank, Euroclear, and SEB, have voted in advance on behalf of the nominee registered shareholders they represent. In a while, we will see a summary of votes cast that were submitted to Euroclear Finland, and that summary will be annexed to the minutes under this point 2. The number of votes, especially against and abstaining, will be read under the corresponding point on the agenda, even if the meeting would not vote on that point.
Commenting on the results of the advance voting, it has been very successful. Some 587 million votes have been cast in advance. The company has said 769 million votes, so about 70% of the shareholders have already voted in advance. The results of the votes, very briefly, all the items on the agenda have received enough votes in the advance vote, that the items, the result of the vote, is already clear. I will come back to that on points 13 and 18, where there is a little bit more opposition, will see the numbers, the figures and their percentages of the all votes cast. So much for instructions for voting. Coming back to housekeeping, after the meeting, the coffee will be served.
The doors to the cafeteria on the left-hand side will be opened once the meeting is closed. Now we are through, point 2 on the agenda. We go on to point 3 on the agenda, which is selection of the scrutineers of the minutes and the supervisors for counting of votes. This is, l arge meeting, and therefore I propose that we elect two persons to scrutinize the minutes and two persons to oversee the counting of votes. If this is agreeable to everybody, I would like to ask for your proposals. I have the microphone on the left-hand side of the room.
Hey, Maija Strandberg.
My name is Maija Strandberg. I propose that we elect Osmo Kammonen and Anders Pelli to scrutinize the minutes, and John Launiainen and Mikaela Motskinniemi to oversee the counting of votes. Thank you. Can I have the voting card number here? Yes. 38 is the number of my voting card.
Yeah.
Thank you. Are there any other proposals? Since there are no others, we elect Osmo Kammonen and Anders Pelli to scrutinize the minutes, and John Launiainen and Mikaela Motskinniemi to oversee the counting of the votes.
Ei muita.
I just would like to check that these persons are present. Osmo Kammonen, are you here? Present. Thank you. Anders Pelli? Present. Thank you. John Launiainen? Present. Thank you. Mikaela Motskinniemi? Present. Thank you very much. You agree to these tasks? Thank you very much.
Joo.
Excellent. There are no other proposals that we have received, therefore, we confirm that as examiners of the minutes, we've elected Osmo Kammonen and Anders Pelli, and as for supervisors for count of votes, John Launiainen and Mikaela Motskinniemi. Now we move on to the next agenda item, that is establishing the legality of the meeting. This means that we check the articles of association with this respect regarding convening a general meeting and the location, the date, and we compare that to the actualized. The articles of the association provides that this meeting will be held either in Espoo, Helsinki or Vantaa. The ordinary general meeting will be held by the end of June.
With regards to the notice, the Article 10 of the Articles Association determines that the Board will issue the notice will be published no earlier than 2 months, no later than 3 weeks prior to a meeting on the company website and at least 9 days prior to the record date, which has been the 16th of March, 2023. The notice has been published as decided by the Board on the company website and as a public announcement on the 8th of February, 2023, and it can be found, if necessary, for scrutiny at the Chairman's desk.
Further, let us note, this will be also recorded into the minutes, that the nomination board has updated its proposal with regards to the composition of the board with a public announcement on the 10th of March, the notice also has been updated with respect of the size and election of members of the Board of Directors and the respective agenda items 12 and 13. Otherwise, the notice remains unchanged. Can we agree that the annual general meeting has been legally convened and it constitutes a quorum? Any opinions? Any comments? Should there be none, therefore, we confirm the legality and the quorum to be able to handle the agenda items. One more item regarding the order before we move into the agenda items proper, and that is recording the attendance at the meeting and the voting list.
According to the Articles Association, again, there are provisions with regards to the attendance, the shareholder must register with the company by the date mentioned in the notice, but no earlier than 10 days before the annual general meeting. To be able to vote, the shareholder must have been registered on the list held by Euroclear Finland by Thursday, 16th of March. Further, the participant who has a Finnish book entry account or the shareholder who's got the Finnish book entry account has been able to vote in advance, that also has been considered as pre-registration to the annual general meeting, provided by the shareholder has provided the data necessary for registration.
As for the nominee-registered shareholders, they have been considered to have been registered to the annual general meeting if they have been temporarily registered in the shareholders' register of the company no later than the 23rd of March, 2023 by 10:00 A.M. We have also received data from the current situation from the system of Euroclear Finland, we have represented 4,308 shareholders, both shareholders, their proxy representatives, all together 252, and the number of shares and votes totals 606 million, 104,826, which represents 78.8% of company's all shares. The number of advance votes included, we have slightly less than 20 million shares presented here that which have not participated into the advance voting procedure. This will be appended to the minutes as a document under this agenda item.
Now we are ready to move on to the agenda items proper, and we'll start traditionally with the presentation of the financial statements for the 2022 financial period, including the consolidated financial statements, the review by the Board of Directors, and the auditor's report. These documents have been available for shareholders for scrutiny as of 3rd March, so a few days over the minimum amount required by the Companies Act, which is 3 weeks, and they can be found on the company's website as well as also at the headquarters of the company. Now I will give the floor to Matti Lehmus, President and CEO, who will present the financial statements and the review of the year 2022. CEO Lehmus, please, the floor is yours. Shareholders, on my behalf also, I'd like to warmly welcome you to our annual general meeting.
It is a great pleasure to meet you, our shareholders here today, and to give my first review as the CEO of Neste. Together with myself, the company's strategy and business operations are managed by my international and experienced executive committee, consisting of 5 business directors as well as heads of joint operations. The majority of the executive committee team is also present here today. My first year as President and CEO of Neste will soon be over. The year 2022 was challenging but successful for us. We continued determinedly executing our strategy despite the turbulent operating environment. Our entire personnel was committed, and the cooperation with our customers and partners enabled an excellent operational result. We made significant progress in our strategy execution also. We promoted our renewable business with its growth projects and expanded our raw material base.
We also adjusted our oil products business and showed our flexibility when we stopped the use of Russian crude and natural gas and invested in the development of new business platforms at the same time. This work will continue strongly from now on as well, and we are ambitiously developing both business profitability and the strategic growth of the entire company. I will go through aspects of our operating environment. The year 2022 brought unprecedented changes and uncertainty in geopolitics and macroeconomics. This has caused significant challenges around the world. Russia's invasion and war in Ukraine has caused human suffering and affected many people's lives. The war, already lasting for more than a year, has also had a significant impact on the international energy markets.
Energy prices increased sharply during the spring of 2022, reflected also in the prices of both crude oil and oil products, also with electricity, natural gas, and renewable raw materials and products. All these factors impacted significantly on our business. In this challenging situation, however, we were able to achieve quick solutions. We managed to replace the use of Russian crude oil and natural gas with other raw materials very quickly. This was possible as we had invested on a long-term basis in technical and commercial flexibility and in the expertise of our personnel. Raw material prices increased clearly in last year, in the spring, reflected also in the high consumer prices of products.
The price of development leveled off nevertheless and reversed during the end of the year. Crude oil prices, for instance, returned to level close to those seen at the beginning of the year, when expectations of a slowdown in global economic growth, high inflation, and tighter monetary policy affected the outlook for demand. To ease the upward pressure on consumer prices, some countries, such as Finland, lowered the biofuels blending mandate. The longer-term climate targets have not been abandoned and therefore, for instance, in Finland, the decrease is planned to be temporary. Despite the challenging and unpredictable year, we were able to quickly adapt to changes in our operating environment and above all, to secure the uninterrupted operation of our production and supply chains. Next, I'll speak about safety.
Safety is the foundation of everything we do at Neste. We want to lead the way to an accident-free future. The safety of our employees, partners, and our operations is of top priority for us. With regards to safety, 2022 was not in line with our targets as we fell short of our goal of continuous improvement. We can see from the slides, Total Recordable Incident Frequency Rate at Neste was higher compared to the same period last year, whereas our process safety event rate was at the same level as in 2021. We've launched a number of additional measures and projects to improve our safety performance. They focus on contractor safety, process safety, and safety management. Continuous improvement of safety will be one of our main targets also this year.
Next, I will turn to a review of the company's key financial targets, which are comparable return on average capital employed, the ROACE, and the leverage ratio. In 2022, we reached our financial target level clearly. Our comparable return on average capital employed was 30.1%, while our target range is above 15%. Leverage ratio was 13.9%, clearly below our targets of 40%. Further, comparable EBITDA is our key financial metric, and it reached last year € 3.537 billion, which is more than 80% growth compared to the previous year. Sustainability is strongly connected to the core of our business, and it is the foundation of our growth strategy in Neste.
In line with our sustainability vision, which we announced in 2021, Neste continues its development towards a carbon -neutral value chain and our targets for biodiversity, human rights, the entire supply chain and raw materials. Our customers and stakeholders expect us of sustainability. The demands for concrete actions are constantly growing, and we wish to continue to be the pioneer in creating solutions to these issues. Our target is to reduce our customers' greenhouse gas emissions through renewable and circular solutions by at least 20 million tons of carbon dioxide equivalent annually by 2030. We are well on track with this target. We helped our customers reduce their greenhouse gas emissions globally by 11.1 million tons last year, equaling annual emissions from 4 million passenger cars. We made also progress in our commitment to reach carbon- neutral production by 2035.
For example, at the Porvoo Refinery in Finland last year, we switched into using 100% renewable electricity and promoted our renewable hydrogen projects. Our third target for the entire value chain is to reduce the intensity of use-phase emissions from products sold by 50% by 2040 compared to 2020. We made several investment decisions to increase the renewables production capacity, and at the same time, we are studying possibilities to replace crude oil with renewables and circular feedstocks at the Porvoo Refinery. I'd like to mention two examples of leading external bodies recognizing us. First and foremost, Neste has been included in the Corporate Knights Global 100 Index, the 17th consecutive year, and ranked 20th on the 29th in the Index and first in its own sector.
Neste was also included the 16th consecutive time in the Dow Jones Sustainability Index, which also is one of the most important and leading global sustainability indicators. Of course, we are very proud of these recognitions.
Shareholders, I will now turn to the main elements of our strategy and the progress we made in them in the past year. Our strategy, Taking Charge of Change, is based on our vision that demand for low- carbon solutions will grow in the long term, both among businesses and consumers. Our goal is to be the global leader in renewable and circular solutions in the selected areas. Through our strategy, we also want to respond to a rapidly changing market environment and increasing competition. Our strategy has 4 key teams. Firstly, we continue to grow in selected renewable and circular solutions. The key elements of renewable growth are increasing our production capacity, expanding our waste and residue-based raw material supply, and opening new market segments.
With a particular focus in the coming years on renewable aviation and renewable raw feedstock for polymers and chemicals. Secondly, we will also focus on creating new markets in the long term. The adoption of new technologies to expand our raw material base is a key theme which supports our long-term growth. Geographic expansion is part of this strategy, and we expect, for example, that the Asian market will gain importance in the long term as the markets for renewable aviation and renewable polymers grow. Thirdly, we will strengthen areas where we can differentiate from our competitors and create value when competition increases. Our differentiation focuses on strengthening our selected capabilities, such as our ability to work with challenging raw materials and developing the...
Optimizing our global supply chain because these are areas where we want to maintain the competitive advantage that we built over a decade already. The fourth important area is strengthening our foundation to support growth and efficiency. In addition to safety, the key areas here are, for example, the utilization of data and digitalization to automate our processes. The continuous improvement of our efficiency and managing the complex supply chain is an important part of our strategy. In our renewables business, we took significant steps last year in growth projects to expand our renewables production. Our aim is to double our production capacity in the next four years, and two of these projects will be launched during this year.
The year 2023 will be a very important year of growth as we increase our renewable production capacity by more than 50% by the end of the year. We are currently living in interesting times because the expansion of our production capacity of renewable products in Singapore reached mechanical completion in late 2022, and we aim to launch the expanded plant in the coming weeks. In spring 2022, we also announced a 50/50 joint operation with the US-based Marathon Petroleum. The joint operation will produce renewable diesel in California, and it is expected to increase Neste's annual production capacity of renewable products by just over 1 million tons by the end of 2023. This project is also in an interesting phase as the first stage of production has just started.
Last summer, we also decided to invest € 1.9 billion in the expansion of the Rotterdam refinery, which is expected to be completed by 2026. This project will increase Neste's total production capacity of renewable products by 1.3 million tons per year and significantly improve our ability to produce sustainable aviation fuels. As part of our strategy work, we also launched a strategic study in the autumn on a potential long-term transition of our refinery in Porvoo to be a globally leading renewable and circular solution site, while also studying the possibility to replace crude oil with alternative feedstocks in 2030. Second important area in the execution of the strategy last year was the growth of the sustainable aviation fuel business.
We entered numerous partnerships and collaborated with leading airlines, of which many have set targets to use sustainable and renewable fuels. Among the airlines, I can mention examples from different parts of the world, such as Air France, KLM in Europe, United Airlines in the US, and Singapore Airlines in Asia. Other important partnerships included the aircraft manufacturer Airbus and several transport companies such as DHL Express. A third important part of our strategy was growing our renewable polymers and chemicals business. Among our key achievements, we're building new supply chains in collaboration with international partners such as Covestro and Mitsubishi Corporation. As a concrete example of collaboration between many partners is when our end customer launched a range of baby strollers made of bio-based plastics.
We also continued our development work on chemical recycling by conducting several test runs with liquified waste plastic at our Porvoo refinery and promoting a feasibility study for a waste plastic liquefaction plant together with our partner. We strengthened our global sourcing of renewable waste and residues through acquisitions. In summer 2022, for example, we acquired Walco Foods in Ireland, which is a company that focuses on the sourcing of animal fats. In late 2022, we bought the SeQuential company on the West Coast of the US, which focuses on the collection and sourcing of used cooking oil. To further develop our raw materials logistics covering over 50 countries, we expanded our terminal network and the previously acquired Rotterdam Terminal. Some words on our financial performance in 2022. Neste ended the year 2022 with an excellent result in all businesses.
The full year comparable EBITDA for renewables was strong, € 1,762 million, with a 20% increase from the previous year. Demand for renewable diesel remained strong, despite the rising raw material and production costs, we were able to increase our comparable sales margin year-over-year. The share of waste and residues of renewable materials continued to increase, averaging at 95% in 2022. The full year comparable EBITDA for oil products was € 1,654 million, increasing by € 1.3 billion from the previous year. Key product margins improved significantly during the year, resulting in a significantly higher total refining margin than in the previous year.
During the year, we were able to successfully secure the continuity of production despite the changes in raw materials. The impact of rising production costs was mitigated by optimizing the supply and use of utilities. The full year comparable EBITDA for the marketing and services segment was € 126 million, an increase of 22% from the previous year. Despite the overall decline in market demand, our unit margins were strong, and we increased the market shares of our key products. In addition to the result, we focused on managing working capital and expenses, as well as cash flow in all our businesses, which is important considering the significant ongoing growth investments. I will next turn to our research and development activities. Innovation is a key part of Neste's business development.
In 2022, our investment in research and development increased to € 85 million, an increase of approximately a quarter from the previous year. We invest the majority of our annual research and development expenditure in the development of future raw materials and technologies that enable their use. Approximately a quarter of our personnel work in innovation, research, product development, and design. In the short to medium term, our aim is to increase the availability of lower -quality waste and residue raw materials, and in the long term, we will study selected new technologies which have a significant potential to expand our raw material base. Renewable hydrogen and e-fuels based on it, lignocellulosic waste and residues, algae, and municipal solid waste are all interesting options, and we study the possibilities to scale these technologies profitably on an industrial scale.
As a concrete example of our research and development, I can mention that we have built a demonstration facility for renewable hydrogen production at our Rotterdam refinery in the Netherlands, and we are also exploring an industrial-scale renewable hydrogen project at our Porvoo refinery. To strengthen our research, development, and innovation globally, we opened an innovation center in Singapore. It was launched early this year, and it drives collaboration with our partners in Asia. Neste has a number of employees of about around 5,200, of which nearly 30% worked abroad. At the end of the year 2022, our company employees represented 68 different nationalities.
We invested strongly in the development of our personnel and strengthening our shared operation, joint operation culture. In developing our capabilities, specific focus has been placed on strengthening our production and supply chain, taking into account future expansions, execution of complex investment projects, and the utilization of digitalization. Neste's shared values and our committed personnel are a key success factor on which we build our far future. I would wish to thank our personnel and the company's board of directors for excellent collaboration. A strong shared commitment has enabled a strong profit development and the execution of our strategy in the midst of a challenging market environment. Shareholders, our aim is to become a global leader in renewable and circular solutions. This guides Neste's development into the future and inspires our personnel to develop solutions for our customers.
This year, we will be celebrating the 75th anniversary of Neste, which consists of several development stages and business changes over time. With these achievements, we have created value for you, our shareholders, and to other stakeholders.
I'm confident that Neste is in a strong position to continue its successful transformation journey and to deliver on its purpose, which is creating a healthier planet for our children. Finally, I would like to thank you, the shareholders, for your confidence in the company and the active dialogue we've had with you during this year. It is a pleasure to see so many of you here today, and as well as those who are participating remotely. Thank you very much.
Thank you, CEO Matti Lehmus, for the review of the year 2022. Before we move into discussion regarding the financial statements, we will also go through the auditor's report, which has been dated on the 7th of February, 2023. Can be found on the company website publication. In the English version, 258, 261 page numbers.
Leena-Kaisa Winberg, APA, the auditor with principal responsibility of the company from KPMG Oy Ab, is now asked to present the audit process and the audit report with key audit matters. Leena-Kaisa Winberg.
Shareholders, my name is Leena-Kaisa Winberg. I have worked as the auditor with principal responsibility of Neste for the financial period 2022, and I represent the KPMG audit firm. In my presentation, I will go through the audit and how that was implemented in Neste for 2022, the key audit matters, and also the opinions we have given in our auditor's report. Our work was concentrating on the key business units and the key operating countries, meaning that we have audited six countries in addition to Finland, Sweden, the Netherlands, Switzerland, Singapore, and the US. According to the provisions with regards the audits, we report officially to the audit committee.
For 2022, our audit plan, as well as also the report on progress of our audits, have been presented quarterly to the audit committee. In addition to the report, with regards to the internal control environment and also the observations on the audit of the financial statements. We have also had experts participating into the audit, and we have used such expertise with regards to the IT systems, taxation, the financial statements of the financial instruments, as well as also with regards to valuation. During the audit, we have regularly met with the CEO, with the chief financial officer, and business directors and management. We've also participated in a board meeting and presented a summary of results of our audits. Could I get the next slide, please? Thank you.
The directive of the European Union with regards to the audit stipulates that the auditor of a listed company must present the key audit matters they consider and how they impact on the audit. For 2022, in our audit, there were three such key matters. First was the joint arrangement with Martinez Renewables together with Marathon Petroleum company, this transaction was important in terms of money, also important for the presentation of the financial statements and quite exceptional. It is about a joint operation where Neither of the owner has a dominant mandate to decide on the company, it is done together, the results are also shared equally.
In our audit, we have checked against the IFRS rules, but also together with our valuation specialists who have been involved in assisting us in evaluating the amounts of cash flow in the balance sheet. We've also heard our specialists with regards to certain joint operations and how we have been reported on those. The second key matter is applicable to biofuel credits, in particular in the USA, which are related to the import and sale of renewable fuels in the USA. These have to be recorded appropriately, which also means that the amounts of renewable fuels must be registered thoroughly and also following the pricing of such credits. We've gone through the process of the company, evaluated that with regards to such amounts, and also checked the amounts recorded together with the amounts held by the respective authorities.
We've also checked the values, comparing them to the market prices. The third key audit matter was valuation of inventories in the renewable product segments, where the inventory is valued, in particular with the market prices of the raw materials and also how different types of raw materials also are divided as part of the purchase and procurement of different feedstocks. The inventory valuation is important, and we have tested, for instance, the controls with regards to the valuation process, and also we have evaluated the calculation practices and also how appropriate the data is in the financial statements. As to our conclusion and general opinions, we have presented that the company consolidated financial statements give a true and fair view of the group's financial position and financial performance and cash flows in accordance with the International Financial Reporting Standards as adopted by the EU.
The financial statements give a true and fair view of the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements in Finland and comply with statutory requirements. In addition to these opinions, we have, as requested by the company, given the national voluntary opinions where we note as follows: We support that the audit and the financial statements will be adopted and the distribution of dividends as proposed by the board. We support that the members of the board of directors and the managing director of the parent company should be discharged from liability for the financial period audited by us.
Thank you, APA Leena-Kaisa Winberg, for presenting the auditor's report and the audit. Now we can confirm that we have been presented the auditor's report and the audit as provided by the Companies Act. Now it is time to discuss shareholders. I open the floor with regards to the financial statements, and I can see the first speaker for the floor. We have the meeting officials here, so let us try and follow the order as requested to speak. Should there be minor problems, please do not get concerned. You will all be able to speak who also request the floor. Please, at the microphone number two.
Chairman Peter Frentz, number 158 on the voting card. Thank you so much to management and all the personnel. The journey of this company, it is fine to follow it. The vision, strategic and operative operations are all top-notch international level. Questions. First of all, the Singapore Two and the Martinez plant. Did I understand correctly that Singapore Two is a bit delayed as far as launching is concerned? For both plants, what is the timing to run on full capacity, and will it enter the markets with the same timing? My second question concerns the financial targets and return on capital employed. In the past four years, as you said, you've been doing better than moderately. If.
The question is: Is there some ambition lacking for the future? Do you want to give such a pessimistic outlook to investors that profitability is going down in the future?
Thank you for the question. It will be the CEO President who replies that. Kiitokset, kysymys.
Thank you for these questions. I will start with the first one concerning the extension of Singapore and Martinez. Indeed, yes. Singapore extension, the mechanical completion was by the end of last year. The plan is that we launch it in the first quarter. We are close to it. Preparations are running smoothly, and I could say that it is in the coming weeks that we start production there, but it needs to be safe, of course. Capacity. Running full capacity, that is something that we are preparing towards.
It is one of our main goals today. Of course, we talk about safe running of capacity, but also that we increase sales and supplies, and we do it as quickly as possible. That is my main goal for this year. You talked about financial targets. The long-term target for capital employed is a minimum 50%. Very okay, so we will work for growth and profitability as we have been over the mark in the past years. Vuoro on. Thank you.
The next question at microphone number one, please.
Joo. Kiitoksia, puheenjohtaja.
Thank you. Hannu Virtanen is my name. 467 is my voting card number. One, thank you to the president. Your first review was excellent. Let's see if you can ever be better than that. Mr. Kähkönen and Mr. Lehmus, you can now both answer my question, which concerns a future strategy 10-30 years from now. The € 1,762 is the EBITDA, and we live on, of course, on the renewables because oil products are going down. I'm a bit worried how far these will suffice. The green transition is speeding up. There are hydrogen cars, electric cars. In 10 years, I think we don't, won't have any other. How are you prepared for this transition? What does a green transition mean for fossil raw materials?
Are they going to be dropped altogether? Is biodiesel part of the green transition, or is it part of greenwashing? What about biodiesel? Is it fossil? Quasi, the half fossil or none of that? Did you get my gist? I suppose so. Both Mattis were addressed. Was it Kähkönen who stands? Yes, seniority first.
Thank you for this good question. Matti Junior will answer in more detail. As the work in the board is described, we do spend a lot of time looking into the future in long term. We have an evening school to watching at 2040, 2050, and what we should decide today so that by then we are still competitive. In that sense, the offering of Neste is good.
We have long-term developing businesses in the polymeric chemicals, and aviation is just about to come in innovation. Thank you, and I'll continue this before answering the second question. It is true, if we look today, where part of our renewable sales is, it is to road transport solutions, and this will be an important sector for the long term. Although cars will be electrified, but heavy vehicles will be an important sector, and we need to take care of old stock. We also create new markets like aviation, renewable polymers, where, for example, electrification is much more difficult. To your second question, in the renewables business, we knew renewable raw materials and renewable fees. Diesel is not fossil.
It is renewable. If we look over the lifespan, it will bring down about 80% the cost of raw material.
Tuonne mikrofoniin. Microphone number 4.
Erkki Laiho is my name, voting card number 95. Each shareholder should be proud of Neste now being a pioneer, as the whole world is thinking of how to replace fossil fuels with renewables or biofuels, whatever you want to call them.
The previous answer already took away my question perhaps, but it is related to the renewable hydrogen, which is perhaps a question of terminology as well. Is this about having water as raw material and with renewable energy, it will be broken into hydrogen and oxygen, and then the hydrogen will be captured together with carbon dioxide, and we get the so-called synthetic fuels out of that as a result. Is this what this is all about? If I have understood it right, there is a pilot plant which will produce renewable hydrogen.
Thank you for this question. CEO Lehmus, please.
Thank you for this question. Indeed, we can read a lot in the media for about renewable hydrogen. As you described, we make use of renewable electricity and then use water too with biochemical processes to produce renewable hydrogen. There's another debate related to that it is possible to further process this as a fuel for electrical vehicles, but that needs further processing then. Thank you.
We have another speaker at the microphone number one.
Calvin Nikkila, voting ticket 130. Regarding the CEO's review, we could see the objectives for future and the plans. In relation to that also how important innovation and research activities are. He mentioned the amount for product development that is allocated. If I heard him right, it was €84 million. I am astonished by that. Did I hear this right or wrong? I would hope it'd be relatively much bigger. It should be according to the objectives. Thank you. CEO Lehmus, please. Thank you for your question.
As said, the amount was € 85 million, if I recall it right, we've increased the amount compared to the previous year. We concentrate on selected technologies. It is good to know that in addition to the development contributions, we also invest strongly on growth products. These both are important for our strategy.
Thank you. Let us take a speaker from microphone 2. I think it was Jukka Solanto, the shareholder who has requested for the floor.
Indeed, Chairperson. Voting ticket is, number is 25. I asked that the CEO would tell us how much last year was the share of raw materials for renewables that was palm oil, how would you consider that developing in future? As you represented the accident rates, I'd like to know how widely the sourcing of raw materials also included into the data for incidents. Thank you. CEO Lehmus.
Thank you for your question. Indeed, with regards to the raw materials last year, we increased the amount of waste and residues up to 95%, meaning that the remaining amount, 5%, has been plant oils and the majority of that palm oil. At the same time, we've also announced that during 2023, we'll give up totally the use of palm oil by the end of the year. The next question pertaining to our DIFR figures and where we follow the whole supply chain. If we have made acquisitions, these also have been taken into account. For instance, this year we also reported such companies which we have acquired during the recent years. Thank you.
Next speaker at the back, at the microphone number 5. Raimo Laitinen, voting ticket number 152.
CEO mentioned in his review the chemical recycling of waste plastics and certain tests. In your annual report, you've also touched upon this a bit. In relation to that, my question then, how do you see the volume of such waste plastics would be in Finland and also globally? What would be your investment schedule on building up such a plant? CEO Lehmus.
Thank you to your question. With regards to chemical recycling, we consider it as a very interesting alternative whilst reducing emissions, or we do not speak about renewables, but circular solutions when we use waste plastics as raw material. As a long-term vision, we'd see that in 2030, we could handle million tons of waste plastics. This is a work in development which is ongoing, and that is our vision.
Looking at the schedule, currently, we are both developing the technology and also making profitability calculations of such a plant, and we'll continue certainly that work in future years.
Thank you. Microphone 6. I apologize for you having to wait for a bit. My radar is a bit out of order.
Tapio Harra is my name, voting ticket 307. I understood from the documents to the annual general meeting that your intention on a midterm plan is to close down the production of crude oil in the Porvoo refinery. Do you consider that the EBITDA, the respective EBITDA could be produced with renewables in future? Thank you. CEO Lehmus, please.
Thank you for your question.
Indeed, last autumn, we announced that for a long-term basis, we clarify the opportunity to transfer the Porvoo or to convert the Porvoo refinery to be a significant production plant for renewables, and it could be about 2 to 4 million tons, an important scale globally. At the same time, we also consider the possibility on a midterm basis to give up fully crude oil. We still continue to analyze that. Thank you. Any other requests?
Could I get the microphone 3 to the speaker.
Chairperson, Erkki Savolainen, voting ticket number 178. The European Union has decided that fossil fuels will be prohibited for passenger cars. Now, at least from Germany, we have understood that only synthetic fuels be accepted. Have renewables, biofuels been also prohibited, or has Neste not been lobbying enough? Thank you.
Indeed, during the last weeks, we've been able to follow how the debate has gone with regards to the regulation in the European Union. According to our latest knowledge, the electric fuels would be allowed even after 2035. Now, the reference is made to e-fuels, for instance, those that have been processed from green hydrogen. Naturally, we continue analyzing this with regards to new technologies.
Thank you. Hannu Virtanen next.
Thank you, Chair. Perhaps I am slightly slow in understanding, but thinking of my first question, I wasn't getting a complete answer. As if we think of wind power and we produce hydrogen with that and also then add urea so that the tanks won't explode. How has Neste prepared itself theoretically, thinking of aviation, heavy transportation, they'd all be using hydrogen or electricity in future?
How should we put this into relation of renewable diesel? Will that become totally insignificant? I have to rephrase my question now. What is your strategy with this regard? Are you going to develop hydrogen? If you think of renewable diesel fuels, they'd be totally taken off the market. We'd be totally standing on a void.
Thank you for the clarifying question and now the clarifying answer from CEO Lehmus.
Yes, to specify, according to our vision, we'll be needing different low- carbon solutions. The need for decreasing emissions is important and even continues further after 2030. We will need both hydrogen, electrification, also liquid biofuels and cells for engines. Therefore, taking new technologies in to use, there are different schedules, of course.
For passenger cars, electric vehicles will come faster, and for heavy traffic and heavy vehicles, that will be on a different scale, and aviation fuels will be an important part of the solution on a long-term basis, although we will develop new technologies too. This with respect of biofuels. Thank you. Any other requests?
Could I get the microphone to the center, to the microphone number two.
Thank you, Chairman. Heimo Lehtomaa, voting number 254. Mr. Biden launched a $2 trillion green transition finance or financing. What is Neste's plan, and how are you going to benefit from that funding to you? What is the longer- term objective in the US markets? Of course, they are making headway in renewables. Thank you. It will be the President Lehmus.
Thank you.
Concerning the USA, it is true that at federal, also on state level, they have growing targets to reduce emissions. An IRA package published last autumn involved elements of tax reliefs for biofuels. A new thing was that also renewable aviation fuels will have a tax relief, which is also important for Neste. The regulations involve that these credits will be moved to local producers by 2040, and it's important that we have production for operations in the US through this joint operation. Anything else on 2022, on the financial statements? If not, I thank the shareholders for a very fruitful discussion, good questions. We can say that point 6 is now discussed. Point 7 is the adoption of the financial statements.
In their report, the auditor, when she presented the audit report, they have given the following opinion that the consolidated financial statements give a true and fair view of the group's financial position and financial performance and cash flows in accordance with International Financial Reporting Standards. The financial statements give a true and fair view of the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements in Finland and comply with statutory requirements. In addition, the auditor stated that they are in favor of the financial statements being adopted. I open discussion on this, on adoption of the financial statements. No comments. The financial statements, which include the consolidated financial statements, have thus been adopted.
It will be recorded in the minutes that shareholders who voted in advance, around 340,000 shares and votes, were against this adoption, and about 5.9 million shares and votes abstained under this item. These votes come from the nominee-registered shareholders. Point 7 is completed now. On to item number 8, the nicest one, which is the use of the profit shown in the balance sheet and deciding on the payment of dividend. Here, I would like to give the floor to Matti Kähkönen, Chairman of the Board, who will explain the payment, the details.
Chairperson, shareholders, our policy in Neste is to pay out at least 50% of our profit for the period as dividends. Distributable earnings of the company as of December 31st, 2022 totaled € 3,824 million, and there have been no key changes in our financial position after the closing of the period. The board proposes to the annual general meeting that for 2022, based on our balance sheet, we pay out € 1.02 per share as an ordinary dividend, all together € 1.27 in two installments.
We further propose that the annual general meeting authorize the board at its discretion to pay € 0.25 per share as an extraordinary dividend by the end of October 2023. The board would pay this discretionary second or extraordinary dividend unless there's a significant deterioration in the business during the financial year 2023. The first installment, € 0.51 per share, and the extraordinary dividend of € 0.25 per share, altogether € 0.76 per share be paid to shareholders registered in the shareholders' register of the company Thursday, March 30, 2023, in the register maintained by Euroclear Finland Oy. The board proposes to the annual general meeting that the payment date of the first installment of the ordinary dividend and the extraordinary dividend be paid on Thursday, April 6, 2023.
The second installment of the ordinary dividend, € 0.51 per share, will be paid to shareholders who were registered on the record date for the second installment of the ordinary dividend, Friday, 29th September 2023, and recorded into the list of shareholders maintained by Euroclear Finland Oy. The board proposes that the payment date of the second installment of the ordinary dividend would be Friday, 6th of October, 2023, and the board is authorized to set a new dividend record date and payment date for the second installment of the ordinary dividend in case the rules and regulations of the Finnish book entry system be changed or otherwise so require.
The board notes to the annual general meeting that if the board decides to pay the second extraordinary dividend by virtue of the authorization, the intention of the board is to set the record date and payment date for the second extraordinary dividend payable on the basis of the authorization, so that the dates are the same as for the second installment of the ordinary dividend. Chairperson, this was my proposal.
Thank you, Matti Kähkönen, presenting the proposal for dividend. Based on this introduction, I open the floor for discussion with regards to the proposal made by the board. First, Hannu Virtanen wishes to take the floor. The floor is yours.
Thank you, Chair. I am surprised, as in many years I've been a bit unhappy as Neste has paid such a poor dividend, so we can see a clear improvement here.
My question to Matti Kähkönen is as follows: how about if you'd like to rate on a scale from one to nine, how probable it is that you'll pay the second extraordinary dividend, Matti Kähkönen?
Thank you for the question. As I said, if there are significant deteriorations in the business environment, we will not pay it, but it is difficult to rate it what the significant deterioration is. It is related to the general geopolitical instability and instability in the world in general. It is difficult to know the situation taking place later in autumn, but we'll see how the world goes. I recommend for the next term that you put up your candidates, candidacy for the next parliamentary elections. As a good answer it was. I don't think there will be any parliamentary elections, says the Chairman of the Board.
Yes, as it was said, traditionally continue this way as the policy, dividend policy was so good. Thank you.
Let us continue. Any other speakers wishing to take the floor? If there are none, I note that discussion is closed for this agenda item, and we have adopted the proposal for dividend. We'll also note approximately 280,000 have opposed the proposal for one reason or another, and 5.3 million shares have not known whether they say yes or no. Therefore, we confirm that we have handled the agenda item eight. We'll move on to the agenda item nine, which is about discharging the members of the Board of Directors and the President and CEOs from liability.
It is noted that the auditor has supported that the members of the Board and the managing directors of the parent company should be discharged from liability for the financial period of 2022. The decision is applicable to the following persons: Matti Kähkönen, Chair of the Board, Marco Wirén, Vice Chair, and the following Board members, John Abbott, Nick Elmslie, Martina Flöel, Jari Rosendal, Johanna Söderström, Just Jansz, Eeva Sipilä, Jean-Baptiste Renard . As President and CEO for the year 2022, we have had Peter Vanacker until the 30th of April, and Matti Lehmus as of the 1st of May. Let us confirm and record into the minutes that the Board members and persons that have acted as the President and CEO are disqualified in the handling of this agenda item, and therefore have not been able to cast any votes on this.
I open the floor for discussion with regards of discharging of liability, and I close it, and we note that we have granted discharge for the year 2022. We record into the minutes also the advance votes. Approximately 7.5 million shares have opposed the proposal. Approximately 10.4 million shares have announced that they abstain. We move on to the agenda item 10, which is the remuneration report. The Securities Markets Act provides that listed companies shall publish a remuneration report every year, including information on the remuneration of board members, President and CEO, and the potential acting CEO. Therefore, the Companies Act provides that a listed company shall decide in the annual general meeting on the adoption of the remuneration report, and this decision is advisory.
According to the Securities Markets Act, the remuneration report shall be published no later than three weeks before the annual general meeting. For Neste, this was made on the 3rd of March. As a public announcement, and also on the company website. According to the notice, the Board proposes that the remuneration report for the company's governing bodies for 2022 be approved. I'll give further the floor to the Chairman of the Board, Matti Kähkönen, who will present this remuneration report to the annual general meeting.
Thank you, Chairman. Esteemed shareholders. Next, as the Chair of the Board of Directors and the Chair of the Personnel and Remuneration Committee, I'll give you a review on the remuneration of Neste's managers and key employees.
The task of the Personnel and Remuneration Committee is to ensure that Neste's remuneration schemes reflect our long-term remuneration principles, which are, you can see that on the slide too: ensure strategy execution, drive performance and value-based behavior, encourage individual and team accountability, and be fair and transparent. Next, I'll present different parts of the remuneration of the CEO in more detail. The remuneration of the CEO is composed of a fixed annual salary, including the basic salary and fringe benefits, and variable pay components such as short and long-term incentive schemes. The fixed basic salary is determined in relation to the complexity and impact of the position and the personal performance.
A significant part of the remuneration of the CEO and the members of the executive committee and key employees is based on variable pay components. That is intended to ensure that performance and remuneration remain closely linked. Our short-term incentive scheme encourages individuals to achieve the key operational targets that are significant considering our strategy. Neste's long-term incentive scheme guides the key personnel in achieving the company's financial and strategic objectives. The scheme is based on the relative total return of Neste's shares and the company's impact on greenhouse gas emissions. Moreover, the company's Board of Directors has ruled that from shares received on Neste's share-based bonus schemes, members of the executive committee must accrue in their ownership shares in the company to a value equal to their own basic annual salary.
Remuneration in its entirety also includes different benefits. They are described in more detail in the remuneration report for 2022 and on the company's website. Next, I'll give you the indicators guiding both short and long-term remuneration. The aim of Neste's long-term remuneration policy is to harmonize the interests of the company management, key personnel, and shareholders. This figure here compares the total return on Neste's share with the market index during the last 3 years. Based on the graph, we can say that these two items have been achieved quite successfully. Short-term remuneration is guided as follows: guided by comparable EBITDA, free cash flow, comparable return on capital employed, and our safety indicators. In 2022, our comparable EBITDA and comparable return on capital employed were at an excellent level.
At the same time, the year was challenging in terms of safety instead, the board will therefore pay special attention to safety management in 2023. Targets set by the board and systematically guided by the company management and personnel towards the continuous development of our operations. Briefly, a review on the incentives paid in 2022, for which the earning period ended in 2021. Based on the long-term incentive scheme, we paid € 2.5 million to the executive committee and € 6.3 million to other key personnel. We reward our entire personnel for good performance, and all our employees are covered by our short-term incentive schemes. Furthermore, Neste employees in Finland are entitled to participate into the Neste Personnel Fund. By our short-term incentive schemes and the personal fund in...
we paid a total of € 37.8 million based on our performance in 2021. Chairperson, this was my proposal.
Thank you, Mr. Kähkönen, for presenting the remuneration report. I open discussion on the remuneration report. Any comments? Discussion is closed. The AGM has decided to adopt the remuneration report of Neste Corporation, and it will record it in the minutes that advance votes against around € 23.9 million, which was about 4% of the shares represented in the AGM, and then abstentions about 9.7 million shares. As in previous items, these votes come principally from the lists of nominal registered shareholders. On to point 11. Well, actually 11, 12, and 13.
The remuneration, on the number of members in the board, and the composition of the board. I will here give the floor to the Chair of the Shareholders' Nomination Board, Maija Strandberg, who will present their proposals. Maija Strandberg, the floor is yours.
Thank you, Chairman, distinguished shareholders, ladies and gentlemen. My name is Maija Strandberg, and I am Senior Financial Counselor at the Government Ownership Steering Department of the Prime Minister's Office, and I am the Chair of the Nomination Board of Neste. Today, it is my pleasure, on behalf of the Nomination Board, to present our proposals to the AGM. The Nomination Board of Shareholders submitted its proposals to the board of directors for the 2023 AGM on January 27th of this year, and we updated our proposal or proposals on the 10th of March, 2023.
The Nomination Board was appointed on September 6, 2022. The AGM had decided that the Nomination Board shall consist of representatives of the 3 largest shareholders on the first weekday in September of the year concerned. They are the following. Myself, I represent the Government Ownership Steering Department of the Prime Minister's Office. I'm the chair of the Nomination Board. Other members are Timo Sallinen, Senior Vice President, Investments of Varma Mutual Pension Insurance Company, Jouko Pölönen, President and CEO of Ilmarinen Mutual Pension Insurance Company, and Matti Kähkönen, Chairman of the Board of Directors of Neste. We have studied thoroughly the recruitment and of new members. We propose that the Neste strategy has sufficient international business expertise for Neste strategy. As for the members of the board, we propose to elect 9 members to the board.
We propose to re-elect Matti Kähkönen as the Chairman of the Board of Directors. In addition, the current board members to be re-elected, John Abbott, Nick Elmslie, Just Jansz, Jari Rosendal, Eeva Sipilä, and Johanna Söderström. Eeva Sipilä is proposed to be elected as Vice Chair of the board. We further propose that Heikki Malinen and Kimmo Viertola be elected as new members. They will introduce themselves at a later stage. The current members, Marco Wirén and Martina Flöel, announced that they were no longer available for re-election. On behalf of the Nomination Board, I would like to warmly thank, first of all, Marco Wirén, who has been a board member since 2015. Marco's long-standing contribution as the vice chair and as a member of the board and as a chair of the audit committee has been solid and valuable.
I wish to warmly thank him for the work done for Neste. The Nomination Board amended its original proposal on March 10, 2023, after Martina Flöel announced that she was no longer available for re-election. The reason for this was a potential conflict of interest relating to Flöel's other engagements, which had arisen after our original proposal. Martina Flöel has been a board member since 2017, and I would like to thank her for her excellent work for the benefit of Neste. All these candidates have agreed to be appointed to the board, and they are independent of the company and its major shareholders, except for Kimmo Viertola, Director General of the Ownership Steering Department in the Prime Minister's Office. Concerning the selection procedure of the members, the Shareholders' Nomination Board recommends that shareholders at the AGM vote on their entire proposal.
This recommendation is based on the fact that in line with the Nordic Governance Model, the company has a Shareholders' Nomination Board, which is independent of the Board of Directors. The Shareholders' Nomination Board's task, in addition to assuring that individual nominees for the Board of Directors possess the required qualifications, is also to make sure that the proposed Board of Directors as a whole has the best possible knowledge, expertise, and experience in the interest of the company and that the composition of the board also meets other requirements of the Finnish Corporate Governance Code for listed companies. On remuneration, we explain in our proposal that this remuneration proposal is part of a program which adjusts Neste, the board's remuneration, to correspond to market levels by 2026.
The nomination board will annually submit its proposals to this effect to the annual general meeting respecting its rules of procedure. Our proposal for remuneration of board members for the next term is as follows: annual fixed re-remuneration, we propose the following: Chair, € 95,000, Vice Chair, € 60,000, a Chair of Audit Committee, € 60,000, if she or he does not simultaneously act as Chair or Vice Chair of the board, and members, € 45,000.
In addition to the fixed annual remuneration, an annual compensation for committee work as follows: members of the Audit Committee, € 5,000, the Chair of the Personnel and Remuneration Committee, € ,000 for the task, and a member, € 2,500, and the chair of any other committee set up by a board decision, € 6,000, and to members, € 2,500. In addition to annual remuneration, the board members will be paid for attendance in board and committee meetings as follows. You can see them in the board. We propose that 40% of the fixed annual remuneration will be paid in the form of shares and the remainder in cash. The committee and meeting allowances will be paid in cash. I would like to add that the Nomination Board made its proposals unanimously.
Just to underline that the Chairman of the Board, Matti Kähkönen, did not take part in the decision-making when the Nomination Board made its proposal relating to the Chair of the Board and the Board remuneration. Chairman, those were the proposals of the Nomination Board. Thank you.
Thank you, Maija Strandberg for the proposals of the Shareholders' Nomination Board, and these are applicable to agenda items 11, 12, and 13. We'll handle them item by item in this Annual General Meeting. Therefore, we start by agenda item 11, deciding the remuneration of the members of the Board of Directors. They are now conveniently also on the screen, so I won't repeat them. We could perhaps also take the slide with the presentation of annual remuneration.
This was the proposal by the Shareholders' Nomination Board with regards to the fees of the board members divided into annual fees, committee fees, and meeting fees, and the payment procedure, 40% in shares and 60% in monies. I open the floor for discussion now. Let us take Peter Fritz, if I remember right, by the microphone two.
Thank you, Chair.
Exactly right. Voting ticket number 158.
Typically, I will not take the floor regarding the remuneration of the board, now, strictly speaking, I would say that we do not appreciate the competence and experience of our board members in terms of bringing value to shareholders. I don't want to stir around this particular proposal for this year, if the Nomination Board has considered by 2026, we'd like to take this remuneration to a level which is also comparable internationally. I recommend that you consider taking that step already after 1 year. Thank you.
Thank you for this address. Any other shareholders wishing to take the floor regarding the remuneration of the Board? If there are no further requests, let us note that we have closed the debate, we note that the annual general meeting has resolved to adopt the remuneration of Board members as proposed by the Nomination Board. We'll record that into the minutes and also the opinions of the shareholders having voted in advance, approximately 7.74 million opposing and approximately 5.2 abstentions. Again, mainly representing the nominee registered shareholders. Next item, deciding the number of members of the Board of Directors, agenda item 12.
According to the Article 4 of the Articles of Association, the board has at least 5 and no more than 10 members. Currently, there are 9 members, and the Shareholders' Nomination Board's proposal would mean that the number be kept as is. That is 9 members. I open the floor for discussion with regards to this agenda item. I close the discussion. We note that we have confirmed the number of members of the board be 9. Only 12 shares have opposed the proposal in advance voting. Approximately 17,000 shares have abstained from voting. Let us move to the agenda item 13: election of the Chair, the Vice Chair, and the members of the board.
I refer to the previous pre-presentation by Maija Strandberg on behalf of the nomination board, and it is proposed that Matti Kähkönen be elected, re-elected as chair and in addition to himself re-elect John Abbott, Nick Elmslie, and Just Jansz, Jari Rosendal, Eeva Sipilä, and Johanna Söderström. Eeva Sipilä is proposed to be elected as vice chair of the board, and further, the nomination board proposes two new members to be elected. That is Heikki Malinen and Kimmo Viertola are candidates. At this point, the new candidates, Kimmo Viertola and Heikki Malinen, should present themselves to the annual general meeting. We'll start with Heikki Malinen.
Shareholders, my name is Heikki Malinen. I am the CEO of Outokumpu, OU, which is the world leading low emission stainless steel producer. It is a great honor and joy to be presented as a candidate for Neste Board.
It is a great company with an excellent future ahead. A few words of my background. You can see my CV at the background as well. I worked nearly for 20 years in company management in different positions. The last 8 years in the Outokumpu and 2 years as vice chair of the board in the Outokumpu Corporation. Half of my life I've lived in different parts of the world, the longest in the USA for nearly 15 years, where I've also carried out my MBA at the Harvard School. Basically in the heavy industry, I worked for the forest industry in the UPM for the longest, and I'm also familiar with logistics and now with stainless steel for nearly 11 years of my experience.
My interest for Neste is it being a great company, and there are four things that are close to my heart, and I'm particularly interested in. That is the green transition, sustainable development, the international nature of Neste, and I think I can bring also my competence to that, and big planned projects. My industrial background is supporting that. I'd like to thank you for your attention.
Thank you, Heikki Malinen. Next, Kimmo Viertola, please.
Good morning, shareholders. I'm Kimmo Viertola. I am Director General in the Finnish Ownership Steering Department of the Prime Minister's Office, nearly for five years in this task. We have faced the challenges both in terms of the pandemic and also the Russian attack, the aggressive war against Ukraine.
Before this position, I worked in finance investments, both in direct investments but also in fund investments from representing different sectors and different life cycles of investments, joined together by the objectives of strong growth and internationalization. Before that, I worked in the banking sector, both in Finland and abroad, in the corporate banking sectors, and I worked in a global organization as well. For a couple of weeks, I still work in the Fortum Oyj board until its annual general meeting. I worked also concentrating on corporate financing, and I've also been the Chair of the Shareholders' Nomination Board. Neste is a well appreciated pioneer in renewables and in the board, I'd like to be part of the discussion, bring my expertise to increase the value of shareholders and also to have, see a profitable growth for Neste business.
Thank you, Director General Kimmo Viertola for your presentation. Now we have gone through the proposal by the nomination board, and we've also seen new candidates presenting themselves. Now it is time to have a discussion on the proposal made with regards to the composition of the board. We are to elect nine members, according to the Articles of Association The annual general meeting also has a mandate to elect chair and vice-chair to the board. Shareholders, the floor is yours. I can see no requests to speak to the meeting, therefore, we can note that we have closed the debate, the proposal by the nomination board has been adopted.
The annual general meeting has decided to nominate the following persons, re-elect Matti Kähkönen as Chair, Eeva Sipilä as the new Vice-Chair, John Abbott, Nick Elmslie, Just Jansz, Jari Rosendal, Johanna Söderström, Heikki Malinen, and Kimmo Viertola as members of the Board of Directors. Further, let us record to the minutes opposing votes of advanced voting, approximately 65 million shares and votes, then approximately 557,000 abstentions. Before we close this agenda item, I will give the floor to Matti Kähkönen, the Chairman of the Board.
Thank you, Chair. First and foremost, I'd like to thank for the confidence on behalf of the full Board. We are going to do our best in order to be able to succeed even in future. We do challenge and support Matti in his position and task. Thank you for your confidence.
In this context, I'd like to also express my warm thanks to Marco and Martina for the excellent work they've done in the Board and also developed the company further. It has been an excellent path. It has been good to work together with you. I'd like to express my greatest thanks to you. Thank you.
We have handled the agenda item 13. Let us move to the agenda items 14, 15 with regards to the auditor. First, we have to decide on the remuneration of the auditor. Based on the decisions of the previous Annual General Meetings, the auditor's fee has been paid according to an invoice approved by the company. As in the notice of the meeting, the Board proposes to the Annual General Meeting based on the recommendation of the Audit Committee that we continue as previously. Any speakers?
Discussion closed. We confirm that the decision has been adopted. Let us record in the minutes against the votes in advance, opposing approximately €12 million and abstentions approximately €4 million. We are recording to the minutes the exact numbers. Item 15, election of the auditor. According to Article 9 of the Articles of Association, the company has one regular auditor, which will be an auditing company. The company will nominate the auditor with principal responsibility, who has to be an authorized public accountant. The term will end at the close of the next annual general meeting of shareholders in the spring in 2021. The shareholders elected KPMG Oy Ab as an audit firm. The earlier auditor was PricewaterhouseCoopers, and as principal auditor, Leenakaisa Winberg, APA. As proposed and recommended by the board, we'll continue.
As previously, it is proposed that KMBJ Oy will be the company auditor. It has announced that it will reappoint Leenakaisa Winberg, Authorized Public Accountant. The discussion is open. I close the debate. This proposal has been adopted. It will be rocketed, the shares against 4.4 million and abstentions around 4 million votes and shares. They are less than 1 percentage points of all shares. We go to the authorization business. We start with item 16, authorizing the Board of Directors to decide to repurchase the company's own shares. The substance of the Board's proposal is included in the notice to the meeting. It has been available to shareholders on the company's website since February 8. It is similar to the one that was decided in the Annual General Meeting last year.
The authorization to purchase company shares and issue shares are always valid for a year or 12 or 18 months because we want the authorization to be a little bit longer than the 12 months every because the dates of the annual general meetings might vary a little bit. Now we are talking about the buyback authorization. The
The maximum amount is 23 million company shares, as proposed, which is equivalent to approximately 2.99% of the company's total number of shares. This authorization would authorize the board to decide on buying back the company shares as a directed buy back in a proportion other than that of the shareholders' current holdings, it needs a qualified majority, i.e., two-thirds majority of our shares and represented in the AGM. The purchased shares will be used as consideration in possible acquisitions or in other transactions of the company to finance investments, contribution to the company's incentive program, or to be retained, conveyed, or canceled by the company.
Here I open discussion on item 16, which authorizes the board of directors to decide to repurchase the company's own shares. Hannu Virtanen, please.
Thank you, Chairman. I was worried once whether Neste would buy back their own shares and then cancel them. That was a worry for me. Think about Nokia. Nokia bought their own shares with €19 billion, then they canceled them. If we compare that to the exchange rate of Neste. Neste, € 14, and Nokia, € 4. It is not worth buying your own shares just to cancel them. Give the money to shareholders, if you so wish to. I would like to ask the chairman of the board whether you ever thought of such a stupid thing. Matti Kähkönen, did you ever think of such a stupid thing?
Thank you for the good question and comment. Yes. Well, it depends on the company and their situations. Well, with Neste, we thought that it would be good to have a toolbox if we have some acquisitions or mergers and acquisitions. That was our underlying idea.
Any other questions under this point? If not, the discussion is closed, and there are no proposals that came up, the Board of Directors' proposal to authorize them to decide on the repurchase of the company's own shares has been adopted by the AGM. In advance votes, there were about 3.7 million votes against and about 33,000 abstentions.
Although this was a decision requiring a qualified majority, there is no problem because the votes against were about 0.5, 0.6% of votes cast and shares represented here. That proposal has been adopted. We go on to another proposal authorizing the board of directors to decide on a share issue. Like the previous item or a mirror image of the previous one, the same dates. The proposal has been available on the company website since February 8th. In substance, it is similar to the share issue authorization, which is still actually valid. It was granted in 2020, but back then, the duration was three years. It would expire on the 30th of June, 2023.
The duration of the proposed proposed authorization is 18 months. Otherwise, similar substance, similar proposal. Means that under this authorization, no more than 23 million shares could be issued, which corresponds to approximately 2.99% of all the company shares. They could be also given in a directed issue, which means that we need a qualified majority in favor of this proposal. The shares might be used in acquisitions, other transactions of the company to finance investments or to use them as a share of the incentive program. I open discussion. Any questions, comments? No? I close the discussion.
This proposal has been adopted, and we will record in the minutes that 1.6 million shares were against and about 2,700 shares abstained in advance voting.
We go on to the last point on the agenda. That is the amendment of articles 3 and 10 of the Articles of Association. The board's proposal is entirely presented in the notice to the meeting. It has also been available to shareholders since the beginning of February on the company website. The article 3 is mainly an amendment of a technical nature, cleaning up all references to the earlier legislation. Therefore, it would be as follows. Briefly, the company shares are included in the book entry security system. No earlier reference to laws. In particular, as the reference was already outdated, otherwise too.
As to the article ten, it is a bit more extensive, applicable to the heading, which now is better corresponding to the contents and substance as it mentions the notice, the registration, and the venue of the general meeting of shareholders. The third paragraph in the article ten is the one to be amended, and the amendment, in particular, is the second sentence. That is that the Companies Act now enables also the remote meetings to be organized, but that's. There is a requirement that this will also be mentioned in the articles of association of the company. That clause can be decided by the board that the annual general meeting can be organized without a venue, so that the shareholders exercise their rights fully to decide timely using a remote connection with appropriate devices, and that is the new proposal.
Amendments of the articles association require always a qualified majority. The two-thirds of majority is needed of shares represented in the annual general meeting and the votes cast for this proposal to be adopted. I open the debate regarding this agenda item. I'm looking at Terhanuvirtan, whether he would have something to say. No? Clear. There was a bit of hesitation there if I interpreted him right. Should there be no other requests to speak about this agenda item, let us note that discussion is closed, and this proposal also has been adopted. Under this agenda item, the nominee registered shareholders have opposed by approximately € 133 million, but they represent approximately 23% of cast votes and shares to date, they do not have an impact on adoption.
Now we have come to a situation where all matters to be handled in the annual general meeting have been handled. I'd like to thank the shareholders, having, since a long time after difficult times, attended the venue. This meeting is much more pleasant than the meetings of the previous years where no such a spirit could be seen. I'd like to thank the management of the company for good arrangements, and now I declare this meeting closed.