Remuneration statement
Remuneration and other benefits of the Board of Directors
The Annual General Meeting decides about the remuneration to the members of the Board and the committees of the Board of Directors based on a proposal by the Nomination and Compensation Committee.
The Annual General Meeting on 8 March 2012 (AGM) resolved that the annual fees of the members of the Board of Directors be EUR 45 000 for a member, EUR 55 000 for the Vice Chairman and EUR 65 000 for the Chairman of the Board, and that the annual fee of the members of the committees of the Board of Directors be EUR 15 000. It was further resolved to compensate the members of the Board of Directors and the committees for their travelling expenses in accordance with the company's travel rules.
In addition, the AGM authorised the Board of Directors to decide about an additional fee of not more than EUR 15 000 per annum for each of the foreign residents of the Board of Directors and an additional fee of not more than EUR 5 000 per annum for each of the foreign residents of the committees. The authorisation shall be in force until the next AGM. In accordance with the authorisation by the AGM the Board resolved to pay an additional fee of EUR 15 000 per annum to Alexis Fries, Michael Obermayer and Karen de Segundo, and an additional fee of EUR 5 000 per annum to Alexis Fries and Karen de Segundo.
The members of the Board of Directors are not eligible for long-term or short-term incentive plans.
Remuneration and other benefits of the executive management
The guidance for salary, variable pay and other benefits of the members of the Group Executive Committee is decided by the Board of Directors based on a proposal by the Nomination and Compensation Committee. The Chairman of the Nomination and Compensation Committee is authorized to approve the individual remuneration details of the members of the Group Executive Committee.
The remuneration paid to the members of the Group Executive Committee comprises a total salary package, including fixed base salary, customary fringe benefits and pension according to local company practice.
The members of the Group Executive Committee are also eligible for short-term incentives and long-term incentives as in force from time to time.
Short-term incentives
The annual guidance for performance bonuses for the key management is approved by the Board of Directors based on a proposal by the Nomination and Compensation Committee. Bonus schemes within the Pöyry Group are performance-based and part of the individual's total remuneration.
The members of the Group Executive Committee are eligible for an annual performance bonus with a maximum level of 60-120 per cent of their annual base salary. The mix of Group, business group and individual targets, and their threshold and maximum ranges, are defined annually based on the strategic targets approved by the Board of Directors. The payout may be zero if the threshold level is not achieved for any of the agreed targets.
Long-term incentives
Since 2008 the long-term incentive scheme in use for Pöyry executives is a performance share plan. The performance criteria for the plan and the share grants of the members of the Group Executive Committee are approved annually by the Board of Directors. The key principles of the plan are described below.
The company's stock option programme 2004 is fully vested and the final subscription period ends 31 March 2012.
The shareholdings of the members of the Group Executive Committee are listed in Insider ownership and the terms and conditions of the stock option programme 2004 and the performance share plan are found in sections Stock options 2004 and Performance share plan.
Pension plans
The members of the Group Executive Committee participate in local retirement programmes according to local market and company practice in the country where they reside. The members of the Group Executive Committee have no additional pension arrangements of material value.
Terms and conditions of the President and CEO
The salary, variable pay and other benefits of the President and CEO are decided by the Board of Directors based on a proposal by the Nomination and Compensation Committee.
The remuneration paid to the President and CEO comprises a total salary package, including fixed base salary, customary fringe benefits (including car, mobile phone) and statutory plus voluntary pension contributions as described below.
The President and CEO is eligible for an annual performance bonus, with a maximum level of 120 per cent of the annual base salary. The mix of Group and individual targets, and their threshold and maximum ranges, are defined annually based on the strategic targets approved by the Board of Directors. The payout may be zero if the threshold level is not achieved for any of the agreed targets.
The President and CEO is also eligible for participation in the performance share plan. The share grants of the President and CEO are approved annually by the Board of Directors. The shareholdings of the President and CEO are listed in Insider ownership.
The President and CEO is covered by the Finnish TyEL pension system, which provides for a retirement benefit based on years of service and earnings according to a prescribed statutory system. Standard retirement benefits are available from age 63 to 68. Furthermore, 30 per cent of the earned annual performance bonus and a voluntary annual contribution of EUR 8 500 are paid to a pension insurance.
The service contract of the President and CEO Heikki Malinen (born 1962, Finnish citizen, M.Sc. (Econ.) and MBA) has been approved by the Board of Directors. The service contract is made for the time being and is subject to a mutual six (6) months' term of notice. In the event of termination by the Company for reasons other than cause, the President and CEO is entitled to a lump-sum payment of eighteen (18) months' base salary in addition to the salary for the notice period. The statutory retirement age applies to the President and CEO. However, the service contract terminates automatically at the end of the calendar month during which the President and CEO turns 63 years of age and retires.
Monetary reported amounts are set forth in the chart below.
The salaries, bonuses and benefits are reported on accrual basis.
