Ferratum Oyj : Document Reporting

Introduction

The remuneration policy for 2020 aimed at strengthening the interests of the employees to be more aligned with the main target of creating sustainable value for shareholders over the medium/long-term, as well as attracting, motivating and retaining talent in order to manage successfully the company and its group.

Ferratum's remuneration approach is founded on high performance, competitive remuneration, encouraging value creation behaviour and long-term sustainability.

The policy complies with applicable legislation and the Finnish Corporate Governance Code 2020 and was approved by the board of directors and shareholders.

In defining the 2020 remuneration policy set out in the first section of this report, the best national and international practices were considered to promote competitiveness and long-term financial success of the company and to ultimately contribute to the favorable development of shareholder value.

This report is split into two main sections:

• i. The first section describes the remuneration policy adopted by Ferratum Group for the members of the Board of Directors, the CEO and the Executives with strategic responsibilities with reference to the financial year 2020.

• ii. The second section provides disclosure on the compensation paid to the Board of Directors and the CEO

Remuneration Policy at a glance

In line with the Ferratum group's remuneration policy for board of directors & CEO, the reward approach is structured throughout the organization to drive the mutual generation of value for the group and for the directors and the alignment of their long-term interests with those of shareholders, ensuring total transparency.

Remuneration for the Board of directors (the "Board") is organized separately from the remuneration systems applicable to the company's CEO, Executive group and management. The board do not receive fringe benefits and are not included in the bonus & incentive schemes or share-based bonus schemes that may exist for Company personnel. The fees paid to the directors are as determined by the General Meeting of shareholders, which can be paid in cash and/or partially or entirely in shares or other financial instruments

Remuneration of the Chief Executive Officer (the "CEO") consists of a fixed monthly salary, fringe benefits, an incentivizing performance bonus scheme, and long-term incentives. The terms of the performance-based variable remuneration are determined annually by the board of Directors. The objective is to align the objectives of the shareholders and the CEO to increase the value of Ferratum in the long term, to implement the company's strategy.

The Board may temporarily deviate from the remuneration policy for governing bodies only in exceptional circumstances in which the key operating preconditions would have changed after the General meeting of shareholders and the deviation is necessary to ensure Ferratum's long terms interest. Although 2020 was unpredictable, no deviations to the remuneration policy for the governing bodies or claw backs were carried out in 2020.

2020 Remuneration at a glance

The Board Fees approved for 2020 in the last AGM, were EUR 4,000 per month as recommended by the remuneration Committee

Total remuneration paid for the CEO in 2020 decreased from 2019. Given the reduction in revenues due to key management actions to weather the COVID-19 Pandemic (including reduced lending, stricter scoring, and streamlining of countries operations), no bonuses were paid for year 2020.

The company took proactive actions due to the COVID-19 pandemic. The Group's management implement a COVID-19 action plan which includes a leaner and more efficient organization. This plan has been successfully executed over the course of 2020.

Actions affecting employee remuneration included temporarily reducing labor costs by reducing working hours to safeguard as many jobs as possible. The fixed salaries of the CEO and Leadership team were temporarily cut by 8% for during Q2 & Q3 and by 5% for management team. Given that incentives are tied to the company performance as well as profitable growth, due to the unprecedent impact of Covid-19 no incentives for 2020 resulted in pay-outs

The company focused to emerge stronger from the pandemic, and with the commitment and flexibility of all stakeholders the group was able to remain nimble in a rapidly changing world.