Remuneration Information • Mar 24, 2015
Remuneration Information
Open in ViewerOpens in native device viewer
Olvi plc Business ID: 0170318-9 Olvitie I-IV 74100 Iisalmi
The company complies with the Finnish Corporate Governance Code issued by the Securities Market Association that entered into force on 1 October 2010. This report has been prepared in accordance with Section 7 (Remuneration), Recommendation 47 of the Code.
According to the Articles of Association of Olvi plc, the Annual General Meeting shall decide on the remuneration of the Board of Directors.
According to a decision made by the Annual General Meeting 2014, the members of the Board of Directors of Olvi plc were remunerated for their term of office ending at the close of the Annual General Meeting 2015 as follows:
| Member of the Board | Annual pay | Attendance allowances | Total remuneration |
|---|---|---|---|
| Hortling Heikki (Chairman) | 77,070 | 8,550 | *85,620 |
| Lager Esa (Vice Chairman) | 30,000 | 6,500 | 36,500 |
| Sinnemaa Heikki (Member) | 24,000 | 6,500 | 30,500 |
| Pääkkönen Tarja (Member) | 24,000 | 6,500 | 30,500 |
| Autere Jaakko (Member) | 24,000 | 6,500 | 30,500 |
| Total: | 179,070 | 34,550 | 213,620 |
* The remuneration of the Chairman of the Board includes fringe benefits of 17,070.00.
The members of the Board have not received any other benefits and have not belonged to the company's incentive schemes.
| Monthly fee: |
Chairman of the Board Vice Chairman of the Board Member of the Board |
EUR 5,000 EUR 2,500 EUR 2,000 |
|---|---|---|
| |
Attendance allowance per meeting: Chairman of the Board Member of the Board |
EUR 950 EUR 650 |
Travel expenses for the members of the Board shall be reimbursed in accordance with the company's travel regulations.
Bonuses based on the achievement of earnings and performance targets are an important incentive for personnel and a management tool. Performance bonus schemes communicate the targets, will and desire set by the company's Board of Directors.
Bonuses based on earnings or performance are a sign of achievements that outperform the target level. Basic wages and salary are compensation for work well done.
The overall objectives of bonuses based on target-setting include clarity, fairness and sufficient effect. Bonus schemes must not encourage imprudent risk-taking or negligence.
The objectives for long-term bonuses in particular include increasing shareholder value, supporting profitable growth and relative profitability, and making operational management and key employees committed to the company.
The components of total remuneration to management are as follows:
The company's Board of Directors decides on theterms of service of the Managing Director, which are specified in a written directors' contract. The Board of Directors assesses the Managing Director's performance annually. The terms of service of other top management shall be decided by the Board of Directors on the basis of the Managing Director's proposal. The Managing Director and other management executives shall not receive separate remuneration for their work in the management group or other internal management organs within the Group.
Short-term incentives are performance bonus schemes in which the monitoring period is one accounting period. The Board of Directors shall decide upon the basis for determination of the incentives. The basis for determination of the performance bonus paid in 2014 (based on achievements in 2013) was operating profit. The maximum performance bonus payable to the Managing Director can be 25 percent, and to other Management Group members 20 percent, of annual income determined on the basis of basic monthly income.
Long-term incentives are based on programmes confirmed by the company's Board of Directors that are valid for at least two accounting periods. The programmes can be share-based incentive schemes, excluding option schemes, or performance bonus schemes based on Group-level targets.
The company's Board of Directors is entitled to review the crucial terms and conditions of long-term incentive schemes during their term of validity in case of unexpected changes in the Group's business environment that have a substantial impact on the Group's operations and performance, or if the Group's structure, business volume or profitability level changes due to corporate acquisitions or divestments.
On 29 April 2014, Olvi plc's Board of Directors decided on a new share-based incentive plan for the Group's key personnel. The aim of the new plan is to combine the objectives of the shareholders and the key employees in order to increase the value of the company, to commit the key employees to the company, and to offer them a competitive reward plan based on earning the company's shares.
The new share-based incentive plan includes one three-year performance period, calendar years 2014—2016. The potential reward from the performance period 2014—2016 will be based on Olvi Group's cumulative operating profit, also known as earnings before interest and taxes (EBIT) Furthermore, the new plan includes one three-year performance period, beginning on 1 July 2014 and ending on 30 June 2017. The prerequisite for receiving
reward on the basis of this performance period is that a key employee purchases the company's series A shares up to the number determined by the Board of Directors. Furthermore, entitlement to a reward is tied to the continuance of employment or service upon reward payment.
Rewards from both performance periods will be paid partly in the company's series A shares and partly in cash in 2017. The cash proportion is intended to covertaxes and taxrelated costs arising from the rewards to the key employees. As a rule, no reward will be paid if the key employee's employment or service endsbefore the reward payment. Members of the Management Group must hold one half of the shares received on the basis of the performance period 2014—2016 for the entire validity of their employment or service.
The plan is directed to approximately 50 people. The rewards to be paid on the basis of the plan are in total an approximate maximum of 40,000 Series A shares in Olvi plc and a cash payment needed for taxes and tax-related costs arising from the shares.
| EUR | Salary in money | *) Performance bonuses |
Fringe benefits | Total |
|---|---|---|---|---|
| Managing Director |
351,997 (339,365) | 0 (0) | 8,856 (240) | 360,853 (339,605) |
| Other Management Group total |
624,626 (613,835) | 132,011 (0) | 15,180 (15,180) | 771,817 (629,015) |
| Total | 976,623 (953,200) | 132,011 (0) | 24,036 (15,420) | 1,132,670 (968,620) |
*) The performance bonus was accumulated for 2013 and paid in 2014 (the performance bonus was accumulated for 2012 and paid in 2013)
Pensions for the company's Managing Director and Management Group members are determined on the basis of valid legislation. They belong to the Finnish TyEL pension scheme in which the amount of employment pension is affected by the length of service and earnings. Income used for the determination of pensions includes the beneficiary's basic salary, bonuses and any other taxable extra pay but not any income realised from shares.
The TyEL pension scheme allows for early retirement at 62 years of age with reduced pension benefits.
One can retire on old-age pension between 63 and 68 years of age, and the pension is determined on the basis of an increasing percentage.
The company's pension schemes are defined contribution plans. Contributions paid to pension plans are recognised in the income statement during the accounting period to which the charge applies.
The Managing Director's period of notice is three months if resigning himself or herself, and six months if the contract is terminated by the company.
If the company terminates the Managing Director's service, the company shall also pay a severance payment equalling six months' salary.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.