DECISION-MAKING ORDER OF REMUNERATION
The General Meeting decides on the remuneration of the members of the Board of Directors. The Board of Directors has established a Remuneration Committee (Recommendation 17), consisting of Jorma Kauppila, Lasse Joensuu, Kenneth Ingman, Ulf Eriksson, Isto Kärkäinen, Esa Rantakangas and Rainer Sjöholm, to prepare a proposal to the General Meeting regarding the remuneration paid to the members of the Board. Departing from Recommendation 15, the Remuneration Committee includes, in addition to members of the Board, representatives of the key shareholders of the Company. The Company’s Board of Directors has considered it to be in the interests of the Company and all its shareholders to have representatives from both the Board and shareholders take part in the preparation of proposals. No member of the Remuneration Committee is independent of the Company in the sense referred to in the Corporate Governance Code. The members of the Remuneration Committee will be paid the same attendance allowance as the members of the Board.
Matters related to the appointment, evaluation, salaries, remuneration, or benefits of the Managing Director and the Managing Director’s deputy are prepared by the Chair of the Board of Directors, Jorma Kauppila, and Vice Chair, Kenneth Ingman, after which they are deliberated on by the Board of Directors.
The Managing Director decides on the salaries and remuneration of other executives. The Board of Directors reviews them annually.
KEY PRINCIPLES OF REMUNERATION
Remuneration of members of the Board
In April 2017, the General Meeting decided in accordance with a proposal from the Board of Directors that the members of the Board will be paid the following monthly fees for the term starting at the end of this General Meeting and ending at the end of the Annual General Meeting of 2018:
to the Chair of the Board, EUR 2,800 a month,
to the Vice Chair of the Board, EUR 1,400 a month,
to other members of the Board, EUR 750 a month each.
In addition to the monthly fees, participation in the meetings of the Board of Directors will entail an attendance allowance of EUR 200 for a meeting of under 2 hours and EUR 350 for a meeting of over 2 hours. When the Chair of the Board, Vice Chair, the Managing Director of the company or an executive official summons a trustee to manage a specific task, the trustee is paid EUR 250 as compensation for the lost day of work if an attendance allowance is not paid for the task in question. Individuals employed by Saga Furs Oyj or the Finnish Fur Breeders’ Association are not paid a monthly fee or an attendance allowance for a meeting held during office hours.
TyEL pension insurance fees are paid for any paid remuneration.
The travel expenses of the members of the Board are compensated and per diem allowance is paid in accordance with the non-taxable remuneration amounts decreed by the National Board of Taxes, and the Chair and Vice Chair of the Board are compensated for the telephone and mailing expenses related to this position. No attendance allowance or compensation for lost working hours are paid for travel time.
The term of the Chair and members of the Board of Directors shall end at the Annual General Meeting without separate notice, notice salary or other compensation paid on the basis of the termination.
Members of the company’s Board of Directors are not included in any remuneration system based on shares or share-related rights.
The Chair and members of the Board were paid a total of EUR 219,833 in remuneration for the financial year 2016–2017.
Renumeration system for the Managing Director and other executives
The Board of Directors decides on the remuneration and other compensation paid to the Managing Director and his or her deputy. The Board of Directors also decides on the compensation paid to them on the basis of dismissal. The company’s Managing Director decides on the remuneration and other compensation paid to the other executives. However, the decisions on the company’s incentive scheme, its objectives, maximum remuneration and indicators are always made by the company’s Board of Directors. The terms and conditions of the incentive scheme have been specified in writing.
In accordance with the regulations of the company’s incentive scheme, the company’s Managing Director, Managing Director’s deputy and other members of the management group can be paid a profit and incentive bonus corresponding to the salary of 0–3 months based on the Group’s return on equity, cost efficiency and the realisation of specified strategic projects. The incentive scheme is based on short-term performance and results, and its earnings period is the financial period of the company, but its objectives have been set so that their realisation enhances the company’s long-term competitive strength. There are no other variables in the salaries and remuneration.
The company’s Managing Director and other executives are not included in any remuneration system based on shares or share-related rights.
The total value of the salary, remuneration and fringe benefits of Managing Director Pertti Fallenius for the financial year 2016–2017 was EUR 270,093. Of this, the fixed share was EUR 248,531 and the variable share was EUR 21,562. The variable share is based on the company’s incentive scheme in its entirety. In addition to monetary salary, Fallenius had a company car and a company-paid telephone. In the event of a dismissal, the Managing Director shall be entitled to compensation corresponding to 12 months of salary in addition to the salary from the period of notice. The period of notice is 6 months.
The total value of the salary, remuneration and fringe benefits of the Managing Director’s deputy in the financial year 2016–2017 was EUR 171,476 and that of the other executives EUR 814,318.
The retirement age of the Managing Director and the Managing Director’s deputy is 60 years and the pension rate is benefit-based 60%. The other executives have the opportunity for a payment-based additional pension scheme. The decision on the establishment of an additional pension scheme was made by the company’s Board of Directors.
Salaries and remuneration of members of the Board in the financial year 2016–2017, no share-based remuneration:
Kenneth Ingman EUR 30,750
Lasse Joensuu EUR 20,700
Jorma Kauppila EUR 54,550
Anders Kulp EUR 22,550
Virve Kuusela EUR 22,550
Isto Kärkäinen EUR 9,583
Pentti Lipsanen EUR 10,100
Christer Nordmyr EUR 250 (compensation for lost working hours)
Hannu Sillanpää EUR 23,950
Rainer Sjöholm EUR 24,650
Stefan Wik EUR 200
Remuneration of the members of the Board, total EUR 219,833
Salaries and remuneration of the Remuneration Committee in the financial year 2016–2017 (included in remuneration above in terms of members of the Board)
Ulf Eriksson EUR 0
Esa Rantakangas EUR 0
Salaries and remuneration of the Managing Director and other executives in the financial year 2016–2017, no share-based remuneration:
Toimitusjohtaja Pertti Fallenius EUR 270,093
-additional pension fee EUR 133,908
Deputy Managing Director Juha Huttunen EUR 171,476
-additional pension fee EUR 66,894
Other executives EUR 814,318