Board of Directors
Decision-making process and main principles of remuneration
The General Meeting of Shareholders determines the emoluments payable to the members of the Board of Directors in advance, for one year at a time.
In 2012, the following annual fees were decided to be paid: Chairman EUR 46,250, Vice Chairman EUR 30,500 and each member EUR 25,750. The fees shall be paid so that 40% of the annual fee is paid in Lassila & Tikanoja's shares held by the company or, if this is not feasible, shares acquired from the markets, and 60% in cash. Shares are to be issued to Board members and, where necessary, acquired directly from the markets on behalf of Board members within the next fourteen trading days, free from restrictions on trading, from the Annual General Meeting.
In addition, the Annual General Meeting decided on the following meeting fees to be paid to the participants of the board and committee meetings: Chairman of the board EUR 1,000, Vice Chairman of the board EUR 700, board member EUR 500, Chairman of the committee EUR 700 and committee member EUR 500 per meeting.
The members of the Board are not included in the share option schemes and they do not have any pension contracts with the company.
Remuneration in 2011
In 2011, Board of Directors met 15 times, audit committee met seven times and remuneration committee met ten times. Heikki Bergholm is Chairman of the Board. Matti Kavetvuo was Vice Chairman of the Board until 27 December 2011. Eero Hautaniemi is Vice Chairman of the Board since 28 December 2011. Eero Hautaniemi is Chairman of the audit committee and the members are Sakari Lassila and Miikka Maijala. Heikki Bergholm is Chairman of the remuneration committee and the members are Matti Kavetvuo (until 27 December 2011) and Hille Korhonen.
In 2011, the fees decided by the Annual General Meeting were paid to the Board of Directors. The following annual fees were paid: Chairman EUR 46,250, Vice Chairman EUR 30,500 and each member EUR 25,750.
In addition, the following meeting fees were paid to the participants of the board and committee meetings: Chairman of the board EUR 1,000, Vice Chairman of the board EUR 700, board member EUR 500, Chairman of the committee EUR 700 and committee member EUR 500 per meeting.
President and CEO and other management
Decision-making process and main principles of remuneration
The Board of Directors determines the salary, bonuses and other benefits of the President and CEO and the direct subordinates of the President and CEO.
The Board has established a remuneration committee. The duties of the committee include among others handling and preparing questions related to management and personnel remuneration and drafting statements to the Board regarding them.
The remuneration of President and CEO and the members of the Group Executive Board consists of a fixed monthly salary and benefits, of a compensation scheme, of share option schemes and of a share-based incentive programme. The President and CEO and the members of the Group Executive Board are included the share option scheme and in the sharebased incentive programmes directed to the key personnel of the company, which are approved by the General Meeting. The basis for the determination of the reward is decided annually by the Board of Directors.
Rewards to be paid for the year 2012 will be based on the EVA result of Lassila & Tikanoja Group excluding L&T Recoil. The maximum share-based payment may equal 4 –12 months’ salary depending on the responsibilities of the member of the Group Executive Board. The decision on the remuneration is done by the Board of Directors based on the statement drafted by the remuneration committee.
The company has also provided a compensation scheme, the criteria of which are determined annually in advance by the Board of Directors. The bonus is based on operating profit excluding non-recurring items and it may equal 3 – 6 months’ salary, at maximum, depending on the responsibilities of the member of the Group Executive Board. The decision on the remuneration is done by the Board of Directors based on the statement drafted by the remuneration committee.
Separate emoluments are not paid to the members of the Group Executive Board forthe memberships of Boards of Directors of the subsidiaries.
President and CEO and members of the Group Executive Board are not covered by any supplementary pension scheme.
A written service contract has been drawn up for the President and CEO. According to the contract, the period of notice is 6 months should the company terminate the contract, and 6 months should the President and CEO terminate the contract. In case the company terminates the contract the President and CEO’s salary will be paid for 12 months. The company has taken out statutory pension and accident insurance for the President and CEO.
Remuneration of President and CEO and other management in 2011
The President and CEO until 13 June 2011 was Jari Sarjo. His salary in 2011 totalled EUR 187,000 including salaries and benefits EUR 156,000 and bonuses EUR 31,000.
Ville Rantala served as temporary President and CEO from 13 June to 31 October 2011. The salary of Rantala for that period totalled EUR 63,000 including salaries and benefits.
Pekka Ojanpää assumed the position of President and CEO on 1 November 2011. The salary of Ojanpää in 2011 totalled EUR 66,000 including salaries and benefits.
The salaries paid to the Group Executive Board totalled EUR 794,000 which includes salaries and benefits EUR 678,000 and bonuses EUR 116,000. The figures include salaries for the period during which the persons in question held an executive position.
No share-based payments will be paid for the year 2011. No options were granted in
2011.
In 2011, EUR 49,000 arising from the pension agreement of the President and CEO, Jari Sarjo, was recognised in the income statement.