Well-functioning and competitive remuneration is an essential tool for engaging competent Board members, key personnel and employees to the Company. The remuneration must be in proportion to the long-term development of the value of the Company. The aim of the remuneration is to encourage employees as individuals and members of a team to achieve the set financial and operative goals and excellent performances.
The principles of remuneration are meant to ensure the achievement of Kojamo’s strategy and business goals. The principles of remuneration must comply with ethical principles and legislative requirements. In addition, all remuneration mechanisms are planned in line with risk management. The remuneration mechanisms strengthen Kojamo’s ability to generate added value to its stakeholders. A further objective is to attract skilled employees through versatile, competitive remuneration.
Read more about the key principles of remuneration in the Remuneration Statement 2018.
Principles of remuneration concerning the members of the Board of Directors
The remuneration paid to the members of Kojamo plc’s Board of Directors is decided by the Annual General Meeting. In the Annual General Meeting 2019, it was decided that for the term of office ending with the Annual General Meeting 2020, the following annual fees will be paid to the members of the Board of Directors:
- EUR 60,000 to the Chairman of the Board
- EUR 36,000 to the Vice-Chairman
- EUR 30,000 to each Board member and
- EUR 36,000 to the Chairman of the Audit Committee.
The Members of the Board are paid only one annual fee according to their role so that no overlapping fees will be paid. In addition, it was decided that an attendance allowance of EUR 600 be paid for each meeting and an attendance allowance of EUR 600 be paid for Committee meetings as well.
As a new remuneration practice, the AGM resolved that the annual fee is to be paid as company’s shares and cash so that approximately 40 per cent of the annual fee will be paid as Kojamo plc’s shares and the rest will be paid in cash.
The shares will be purchased directly on behalf of the Members of the Board. The Company will pay any transaction costs and transfer tax related to the purchase of the Company shares. The shares in question can’t be transferred earlier than two years from the transaction or before the term of the Member of the Board has ended, depending which date is earlier.
Information on Board and Committee fees paid in 2018 is available in the Remuneration Statement 2019.
Principles of remuneration concerning the members of the Shareholders’ Nomination Board
The members of the Nomination Board will not receive remuneration for the membership of the Nomination Board. The members’ travel expenses shall be reimbursed according to the Company’s travel policy.
Principles of remuneration concerning the CEO and Management Team
The remuneration of the CEO and other members of the Management Team consists of total remuneration (including fixed pay and benefits in kind) as well as long-term incentive plans.
The retirement age for the CEO and members of the Management Team is 63 years. The members of the Management Team belong to a defined-contribution pension system, in which an insurance premium corresponding to two months’ salary is paid annually into a group pension insurance plan.
The CEO’s employment contract can be terminated by the Company with a notice period of 12 months, during which the CEO does not have an obligation to work. The CEO can terminate the contract with a notice period of three months. No separate severance pay has been agreed on in the CEO’s contract.
For the other members of the Management Team, the contract can be terminated by the Company with a notice period of six months, during which the manager does not have an obligation to work. The members of the Management Team can terminate the contract with a notice period of three months. The additional severance pay is equivalent to 6 months’ salary.
Remuneration of the CEO in 2019
The salaries and other benefits paid to the CEO in 2019 amounted to EUR 923,165.13, of which EUR 407,844.07 was fixed pay (including benefits in kind) and EUR 515,321.06 was variable pay (including long-term incentives). The expenses of the CEO’s statutory pension scheme in 2019 amounted to EUR 230,883.60 and payments to the additional pension scheme amounted to EUR 64,576.00.
Remuneration of other Management Team members in 2019
The salaries and other benefits paid to the Management Team (excluding the CEO) in 2019 amounted to EUR 1,275,742.63, of which EUR 902,737.20 was fixed pay and EUR 373,005.43 variable pay. The sum includes the salaries and fees paid by Kojamo and all of its subsidiaries insofar the persons stated above are employed by the Company. The expenses of the Management Team’s (excluding the CEO) statutory pension scheme in 2019 amounted to EUR 319,063.23 and payments to the additional pension scheme amounted to EUR 120,845.03.
The long-term incentive plan aims to align the interests of Kojamo’s shareholders and key employees selected by the Board of Directors in order to increase the Company’s value in the long term and commit the key employees to the implementation of the Company’s strategy and offer
them a competitive incentive plan based on earning and accumulation of the Company’s shares. During the earning periods of 2017–2019, 2018–2020 and 2019–2021, the incentive plan is targeted at the members of the Management Team and individually selected key employees.
The ongoing earning periods (2018–2020, 2019–2021 and 2020–2022) are
share-based. The maximum earning opportunity for each earning period has been defined as a number of Kojamo shares. Half of the shares is paid in shares and half in cash.
The incentives under the plans are based on:
- operative result and return on capital employed (%) for the performance period of 2018–2020; and
- revenue, return on equity (%) and funds from operations (FFO) per share for the performance period of 2019–2021.
- revenue and funds from operations (FFO) per share for the performance period of 2020–2022.
More detailed information about Kojamo’s incentive plan is available in the Remuneration Statement 2019.
Page updated 13 February 2020