Remuneration scheme for the President and CEO and members of the Executive Group
Remuneration and other benefits of the President and CEO
The Board of Directors appoints the President and CEO and decides on the terms of his/her employment relationship.
The remuneration and fringe benefits of President and CEO Matti Vuoria for his work as CEO in 2012 totalled EUR 757,517.10 of which EUR 219,409.20 is the bonus, or performance pay, for 2011.
The annual bonus of the President and CEO is based on the percentage of achievement of the profit targets set by the Board of Directors. The maximum bonus for 2011 determined for Mr Vuoria by the Board of Directors was a sum corresponding to the monthly salary of 9 months. Of that sum, the bonus paid to Mr. Vuoria in 2012 corresponded to the percentage of achieved targets.
The President and CEO is included in the long-term incentive scheme described above in Decision-making procedure and remuneration principles, the maximum remuneration of which corresponds to his monthly salary of 4 months during the incentive periods of both 2010–2012 and 2011–2013. In the annual bonus scheme, the maximum remuneration for the President and CEO for 2012 corresponds to the sum of 10 months’ monthly salary, taking into consideration the incentive coefficient, which is based on the investment result. Any annual bonus for 2012 will be paid in 2013 and any remunerations from the long-term incentive scheme in 2013 and 2014.
It has been agreed that President and CEO Vuoria will continue in his position until the end of 2013 and will retire on an old-age pension when he turns 63 in March 2014. The pension benefit under the supplementary pension insurance taken out for the CEO is 60 per cent of the pensionable salary of the supplementary pension, which is based on the annual earnings of the two middle years in the course of the last four years. The supplementary pension insurance will not accrue supplementary pension after the President and CEO has turned 60.
The President and CEO has a period of notice of six months in addition to which he is entitled to severance pay equalling six months’ salary.
Remuneration and other benefits of the members of the Executive Group
The Board of Directors decides on the remuneration and other terms of employment of the members of the Executive Group.
Members of the Executive Group are covered by the performance-based schemes as described above in Decision-making procedure and remuneration principles.
In 2012, the salaries and fringe benefits of the members of the Executive Group, excluding the President and CEO, were EUR 2,120,005.35 and performance pay EUR 193,820.30 (for 2011), in total EUR 2,313,825.65.
The remuneration and fringe benefits of Executive Vice-President Hannu Tarvonen, who acted as the Deputy CEO, totalled EUR 298,702.03 in 2012, which includes performance pay of EUR 34,279.20 for 2011.
Executive Vice-President Tarvonen was set to retire at the age of 60 and his pension amounts to 66 per cent of the calculated pensionable salary. Other members of the Executive Group are set to retire at the age of 60, 62 or 63 and their pension will amount to 60 per cent of the calculated pensionable salary. Mr. Tarvonen retired on old-age pension on 31 December 2012. The lower retirement age has been made possible by taking out supplementary pension insurance with a life insurance company.
The Deputy CEO has a period of notice of six months in addition to which he is entitled to severance pay equalling three months’ salary.