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 2018.
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 2018
The salaries and other benefits paid to the CEO in 2018 amounted to EUR 871,734.46, of which EUR 408,168.82 was fixed pay (including benefits in kind) and EUR 463,565.64 was variable pay (including long-term incentives and a one-time bonus in connection with the listing). The expenses of the CEO’s statutory pension scheme in 2018 amounted to EUR 218,456.66 and payments to the additional pension scheme amounted to EUR 61,479.26.
Remuneration of other Management Team members in 2018
The salaries and other benefits paid to the Management Team (excluding the CEO) in 2018 amounted to EUR 1,462,157.36, of which EUR 941,702.98 was fixed pay and EUR 520,454.38 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 2018 amounted to EUR 366,416.63 and payments to the additional pension scheme amounted to EUR 136,001.38.
Kojamo plc maintains the long-term incentive plans 2015 and 2018 for the Group’s key employees. These incentive plans offer key employees selected by the Company’s Board of Directors a possibility to earn cash rewards based on achieving the performance criteria set by the Board of Directors. The incentive plans follow three-year performance periods commencing each year.
Kojamo plc’s Board of Directors decided to convert the ongoing performance periods (2016–2018, 2017–2019 and 2018–2020) and future performance periods (2019–2021 and 2020–2022) of the long-term incentive plans 2015 and 2018 into share-based plans. The amount of possible rewards in euros for each performance period will be converted into an incentive based on shares in Kojamo plc. The performance criteria or the targets set for each criterion were not changed.
The incentive plan aims to align the interests of Kojamo’s shareholders and key employees 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 performance periods of 2016–2018, 2017–2019 and 2018–2020, the incentive plan is targeted at the members of the Management Board and individually selected key employees.
The incentives under the plans are based on:
- net rental income, operative result and return on capital employed (%) for the performance period of 2017–2019;
- 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.
If the three ongoing earning periods were accrued in full, the maximum reward would be a sum corresponding to 377,830 Kojamo shares, of which 50 per cent would be paid in Kojamo’s shares and 50 per cent in cash.
More detailed information about Kojamo’s incentive plan is available in the Remuneration Statement 2018.
Page updated 14 June 2019