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Compensations

Management compensation, benefits and incentive plans

 

The fees paid to the Chairman and to the members of the Board in 2016 totalled EUR 24,000 and EUR 108,000, respectively. However, no fees are paid to Board members employed by the company.

Martela Corporation gained a new CEO on 1 October 2015. The total salaries and other benefits paid to Martela Corporation’s CEOs in 2016 were EUR 232,000 (309,000). In addition, a total of EUR149,000 in share bonuses for the CEO was entered as a reserve in the financial statements in 2016.

Martela’s previous CEO Heikki Martela retired when he reached the age of 60 in spring 2016. For the current CEO, the period of notice of termination of contract is six months for both the CEO and the company. If the company gives notice of termination of contract, the CEO is entitled to one-off compensation equivalent to 6 months’ salary.

Bonus and incentive plans based on annual or shorter-term performance are in place in the Group to promote the achievement of short-term objectives. The amount of the incentive is influenced mainly by performance indicators.

The remuneration of the CEO and the Group Management Team consists of a fixed basic salary, annual performance pay and a long-term share-based incentive scheme.

The Renumeration Committee based on authorization by Board of Directors decides on the annual performance pay of the CEO and other key personnel of the Group and the Board of Directors decides the terms and conditions of the long-term share-based incentive plan.  

The amount of performance pay for the CEO and the members of the Group Management Team is based not only on personal results but also on the financial performance of the entire Group and the unit. The annual performance pay of the CEO and the Group Management Team may be no more than 30 – 45 per cent of their annual taxable earnings excluding performance pay. The principle of one-overone approval is observed within the Group, which means that all pay-related terms and conditions require approval from the supervisor or manager who appointed the person in question.

At the end of the financial year on 31 December 2016, the Group had two longterm share-based incentive plans. In the older plan the earning period is the calendar years 2014 – 2016 separately and cumulatively and in the newer plan the calendar years 2017 – 2018 cumulatively and the calendar years 2019 – 2020 cumulatively. The maximum total bonus in the older programme is 160,000 Martela Corporation A shares and an amount of cash that will cover taxes and similar charges, estimated at approximately the value of the shares to be paid. The Board of Directors will decide the earning criteria and the goals for each criteria of the newer programme, adopted on 15 December 2016, at the beginning of the earning period. Bonuses paid for the 2017 – 2018 earning period correspond to a maximum total of approximately 100,000 Martela Corporation series A shares and also includes the cash portion. In the earning periods 2014 – 2016 and 2017 – 2018 the target group of the programmes is the members of the Group Management Team. For the 2016 calendar year the targets were met and 41,777 shares will be distributed as bonuses.

See the notes to the financial statements for information on the effect of management remuneration and the share-based incentive plan on the result for the year.

No other compensation is paid on the basis of membership of the Management Team or a subsidiary.

Updated 13.3.2017