This management emolument statement sets forth a summary of the financial benefits, remuneration system and thereto related decision-making pertaining to Board members and operative management of Digia Plc.
The Shareholders' Meeting decides on emoluments payable to the Board of Directors and grounds for the compensation of expenses. The 2012 AGM decided to pay monthly emoluments of EUR 2,500 to Board members, EUR 3,500 to the Vice Chairman and EUR 5,500 to the Chairman for their work on the Board. In addition, the AGM approved EUR 500 in fees per Board or committee meeting for all Board members. Moreover, the Shareholders’ Meeting decided that standard and reasonable costs resulting from work on the Board would be reimbursed against invoice.
In the 2012 financial year, a total of EUR 338,000 was paid in emoluments to the members of the Board of Directors for their work on the Board, as follows:
|Päivi Hokkanen||EUR 32,500|
|Robert Ingman||EUR 51,500|
|Kari Karvinen||EUR 42,500|
|Pertti Kyttälä||EUR 79,000|
|Martti Mehtälä||EUR 10,500|
|Seppo Ruotsalainen||EUR 33,500|
|Leena Saarinen||EUR 33,000|
|Pekka Sivonen||EUR 8,500|
|Tommi Uhari||EUR 39,500|
|Marjatta Virtanen||EUR 7,500|
All emoluments were monetary. The company does not grant stock options or share-based remuneration for work on the Board.
Summary of the CEO remuneration system
The Board of Directors decides on the CEO’s salary, and other remuneration and benefits.
CEO Varelius’s remuneration package comprises a monthly salary in accordance with his director agreement, a bonus payable on the basis of reaching the set targets and the share bonus possibly payable pursuant to CEO’s share incentive scheme.
In addition to the monthly salary the CEO is paid a bonus equal to three months’ salary upon meeting the targets linked to the revenue and profit budgets set by the Board of Directors. In the event the revenue target is exceeded the bonus will increase up to a maximum amount equal to nine months’ salary for 140% outcome of the revenue target, provided that also the profit target is met or exceeded. In the event the profit target is not met, any increments for exceeding the revenue target will not be paid. In the event the profit target outcome is less than 80%, no bonuses will be paid at all, irrespective of the revenue outcome.
The share-based remuneration scheme for the Group Management Team (GMT) was decided by the Board pursuant to authority given by the AGM in in Spring 2010.
The scheme has four earning periods, which are years 2010–2013. The scheme provides the CEO with a possibility to earn a maximum bonus equal to the value of 100.000 shares in each earning period respectively pursuant to the earning criteria to be annually decided by the Board for the respective earning period. Regarding year 2012 the bonus shall be determined based on the earning per share (EPS) and revenue of the company. The minimum bonus (5,000 shares) requires an EPS of EUR 0,21 and revenue of EUR 92,0 million. Maximum bonus (100,000 shares) will become payable if the EPS amounts to a EUR 0.32 accompanied by a revenue of EUR 100,0 million or if the EPS amounts to a EUR 0.23 accompanied by a revenue of EUR 122,0 million.
Under said share bonus scheme, in 2012 the CEO has been paid with a bonus equal to the value of 39,266 company shares based on the results of financial year 2011. The bonus has been paid with the treasury shares held by the Company.
Bonuses payable under said scheme will be paid in a 50/50 combination of shares and cash after the adoption of the financial statements following the close of the respective earning period. The cash payment is used primarily to cover taxes and other applicable fees and levies incurred from the bonus payment. The scheme includes no lock-up periods designed to restrict the disposal of shares already granted to the CEO.
CEO Financial benefits and main terms of service
In 2012 the CEO was paid EUR 427,900 in salary and benefits, of which salary and fringe benefits account for EUR 302,760 and bonuses for EUR 125,141.
The company may terminate the CEO’s service contract with six months’ notice. Upon such termination, he will receive remuneration for the notice period plus severance pay equalling 12 months’ salary. The CEO’s retirement age is as stipulated by law, and he has no supplementary pension agreement with the company.
Summary of the remuneration system of other management
Based on a proposal submitted by the CEO, the Board of Directors decides on the salary, other remuneration and other benefits to be paid to other members of the GMT.
GMT members’ total remuneration package comprises a monthly salary and the bonus and share bonus payable on the same basis as with the CEO.
Under the prevailing GMT share bonus scheme the GMT members (other than the CEO) will, in aggregate, be paid with a total maximum bonus equal to the value of 100,000 shares. Under said share bonus scheme, in 2012 the GMT members have, in aggregate, been paid with a bonus equal to the value of 39,266 company shares based on the results of financial year 2011. The bonus has been paid with the treasury shares held by the Company and also in other respects pursuant to same terms as with the CEO’s share bonus.
Each GMT members’ retirement age is stipulated by law, and no member has a supplementary pension agreement with the company.