This management emolument statement sets forth a summary of the financial benefits, remuneration system and thereto related decision-making pertaining to Board members and operative management of Digia Plc.
The Shareholders' Meeting decides on emoluments payable to the Board of Directors and grounds for the compensation of expenses. The 2014 AGM decided to pay monthly emoluments of EUR 2,500 to Board members, EUR 3,500 to the Vice Chairman and EUR 5,500 to the Chairman for their work on the Board. In addition, the AGM approved EUR 500 in fees per Board or committee meeting for all Board members. Moreover, the Shareholders’ Meeting decided that standard and reasonable costs resulting from work on the Board would be reimbursed against invoice.
In the 2014 financial year, a total of EUR 315,000 was paid in emoluments to the members of the Board of Directors for their work on the Board, as follows:
All emoluments were monetary. The company does not grant stock options or share-based remuneration for work on the Board.
The Board of Directors decides on the CEO’s salary, and other remuneration and benefits.
CEO Varelius’s remuneration package comprises a monthly salary in accordance with his director agreement, a bonus payable on the basis of reaching the set targets and the share bonus payable pursuant to CEO’s share incentive scheme.
In addition to the monthly salary the CEO is paid a bonus equal to three months’ salary upon meeting the annual targets linked to the revenue and profit budgets set by the Board of Directors. In the targets are exceeded the bonus will increase up to a maximum amount equal to nine months’ salary for 120% outcome of the targets. In the event the profit target outcome is less than 80%, no bonuses will be paid at all, irrespective of the revenue outcome. Outcome of the targets shall be reviewed per each segment and the bonus shall be paid biannually.
The share-based remuneration scheme for the top management of the Company was decided by the Board pursuant to authority given by the AGM in December 2013.
The scheme has three earning periods, which are years 2014–2016. Regarding year 2015 the scheme provides the CEO with a possibility to earn a maximum bonus equal to the value of 50,000 shares based on earning per share (EPS) and revenue of the company's domestic segment. Minimum bonus (25,000 shares) requires an EPS of EUR 0.19 and revenue of EUR 77.0 million.Maximum bonus (50,000 shares) will become payable if the EPS amounts to a EUR 0.25 accompanied by a revenue of EUR 77.0 million or if the EPS amounts to a EUR 0.19 accompanied by a revenue of EUR 90.5 million. Moreover, the CEO is entitled to a share bonus also based on the results of the Qt-segment as to be decided by the Board later on during year 2015.
Bonuses payable under the existing scheme will be paid in a 50/50 combination of shares and cash after the adoption of the financial statements following the close of the respective earning period. The cash payment is used primarily to cover taxes and other applicable fees and levies incurred from the bonus payment. The scheme includes no lock-up periods designed to restrict the disposal of shares already granted to the CEO.
In 2014 the CEO was paid EUR 287,635 in salary and benefits. No share bonuses were paid.
The company may terminate the CEO’s service contract with six months’ notice. Upon such termination, he will receive remuneration for the notice period plus severance pay equalling 12 months’ salary. The CEO’s retirement age is as stipulated by law, and he has no supplementary pension agreement with the company.
Company’s top management consist of the CEO, the CFO who together with the CEO forms the Group Management Team (GMT) and the Heads of the Domestic and Qt segments as well as their substitutes.
Based on a proposal submitted by the CEO, the Board of Directors decides on the salary, other remuneration and other benefits to be paid to the above directors.
Total remuneration package of said directors comprises a monthly salary and the bonus payable on the basis of reaching the set targets. Earning criteria and terms for such bonus is for the members of Group Management Team the same as with the CEO. As regards the business segment Heads and their substitutes the earning criteria is linked to the targets of their respective segments and the maximum bonus equals to their six months’ salary. In all other respect the bonus terms are the same as with the CEO. No share bonuses were paid in 2014.
In addition, the above directors are eligible for share bonus under the prevailing top management share bonus scheme. Regarding Domestic segment in 2015 they are jointly entitled to a total maximum bonus equal to the value of 14,643 shares on same terms as the CEO. Regarding the Qt segment the Board will decide on the applicable earning criteria later on during year 2015.
Retirement age of the directors is stipulated by law, and no one has a supplementary pension agreement with the company.