This statement is a description of remuneration in Kemira Oyj made available pursuant to Recommendation 47 of the Finnish Corporate Governance Code 2010.
Board of Directors
Based on the decisions of the 2013 Annual General Meeting, Board members are entitled to a yearly fee and a fee per meeting.
The fees are as follows:
• Chairman will receive EUR 74,000 per year,
• Vice Chairman and the Chairman of the Audit Committee EUR 45,000 per year and
• other members EUR 36,000 per year.
A fee payable for each meeting of the Board and its committees is:
• EUR 600 for the members residing in Finland,
• EUR 1,200 for the members residing elsewhere in Europe and
• EUR 2,400 for the members residing outside Europe.
The meeting fees are to be paid in cash.
Travel expenses are paid according to Kemira’s travel policy.
In addition, the Annual General Meeting decided that the annual fee shall be paid as a combination of the company’s shares and cash in such a manner that 40% of the annual fee is paid with the company’s shares owned by the company or, if this is not possible, shares purchased from the market, and 60% is paid in cash. The shares will be transferred to the members of the Board of Directors and, if necessary, acquired directly on behalf of the members of the Board of Directors within two weeks of the release of Kemira’s interim report January 1 – March 31, 2013.
The following share amounts were paid on May 6, 2013 as part of the annual fee decided by the 2013 AGM:
• the Chairman received 2,556 shares,
• the Vice Chairman and Chairman of the Audit Committee 1,554 shares and
• the other members 1,244 shares.
The Board members are not included in any of the share-based incentive plans of Kemira Oyj.
|Jukka Viinanen, Chairman||84,923||83,142|
|Pekka Paasikivi, Chairman (until March 21, 2012)||-||2,400|
|Jari Paasikivi, Vice Chairman||56,710||54,321|
|Elizabeth Armstrong (until March 26, 2013)||7,200||74,177|
|Wolfgang Büchele (until March 21, 2012)||-||3,600|
Compensation of the Managing Director consists of a monthly salary, benefits and performance-based incentives. The performance-based incentives consist of a cash bonus plan and a share-based plan. The main principles of the performance-based incentive plans are described below under the section Decision-making process and main principles of remuneration.
The base salary of Managing Director Wolfgang Büchele is EUR 680,000 per year, including car benefit, mobile phone and holiday pay. Additionally, the Managing Director has a housing benefit and a tax assisted health insurance.
Managing Director Wolfgang Büchele belongs to the Finnish Employees’ Pension Act (TyEL) scheme, which provides pension security based on years of service and earnings as stipulated by law. The Managing Director’s retirement age is 63. The Managing Director does not have a supplementary pension arrangement.
A twelve-month period of notice applies to both sides for the Managing Director. In addition to the salary of the notice period, the Managing Director is not entitled to a separate severance pay.
The emolument of Kemira Oyj’s Managing Director Wolfgang Büchele during the 2013 financial period was EUR 964,566.24 including a EUR 220,080 cash bonus. No share-based bonus was paid during the 2013 financial period.
Decision-making process and main principles of remuneration
The Board of Directors determines the Managing Director and other Group Management Board members’ salaries, other remuneration, and employment terms.
Management compensation consists of a monthly salary, fringe benefits and performance-based incentives. The Group Management Board does not have a separate supplementary pension scheme. The performance-based incentives consist of a cash bonus plan and a share based plan.
The annual cash bonus is determined by the achievement of the Group and personal performance targets for each financial year. The maximum bonus for the Managing Director is 60% of the annual gross salary for the same period and 50–70% for other Group Management Board members. In 2013, as regards the Group performance target, the cash bonus was determined by Group EBIT and cash flow.
In February 2012, Kemira’s Board of Directors decided to establish a new share-based incentive plan that follows the already terminated 2009–2011 plan aimed at the company’s strategic management for the years 2012–2014, as part of the company’s incentive and commitment schemes. The delivery of share rewards within the plan is subject to the achievement of the performance targets set by the Board of Directors, which include both internal and external performance targets. The internal target-setting is divided into three one-year performance periods: 2012, 2013, and 2014. Payment depends on achievement of the set intrinsic value targets calculated from the development of EBITDA and the development of the net debt. The program also includes a three-year external goal, which is tied to the relative total shareholder return (TSR) performance during 2012–2014. As a guiding principle, reward will only be paid based on excellent performance.
The value of the aggregate reward paid out in the course of the three-year plan may not exceed 120% of CEO’s and 100% of the other participants’ gross salary for the same period. The applicable taxes will be deducted from the gross earning and the remaining net value is delivered to the participants in Kemira shares.
Shares earned through the plan must be held for a minimum of two years following each payment. In addition, the participants must retain fifty percent of the shares obtained under the plan until their ownership of Kemira shares based on shares obtained through the share-based incentive programs of Kemira has reached a share ownership level which in value equals at least their gross annual salary for as long as they remain participants in the plan.
The shares transferable under the plan comprise treasury shares or Kemira Oyj shares available in public trading.
In addition to the share-based incentive plan aimed at the company’s strategic management, Kemira has a share-based incentive plan aimed at other key personnel, in which the strategic management will not participate.
The share-based incentive plan aims to align the goals of shareholders and strategic management in order to increase the value of the company, motivate strategic management, and provide competitive shareholder-based incentives.
|Salaries and fringe benefits||Performance-based annual bonus plan (cash)||Performance-based share plan (shares+cash)||2013||2012|
|Managing Director Wolfgang Büchele (since 1. April 2012||744,486||220,080||-||964,566||655,605*|
|Managing Director Harri Kerminen (until 31. March 2012)||-||-||-||-||506,637|
|Deputy to CEO Jyrki Mäki-Kala (until 5. May 2013)||99,616||41,733||-||141,349||273,265|
|Deputy to CEO Jukka Hakkila (since 6. May 2013)**||119,779||41,778||-||161,557||-|
|Other Management Board Members||2,170,117||302,450||-||2,472,568||2,098,535|
|*includes two months remuneration for time before being appointed CEO
**Jukka Hakkila is not a member of the Management Board