Remuneration of the Board of Directors
According to the Limited Liability Companies Act, the Annual General Meeting of Shareholders decides on the fees payable to the members of the Board of Directors.
The Annual General Meeting of Shareholders on 23 January 2020 resolved that the remuneration of the Chairman of the Board is EUR 60,000 per year and the remuneration of other members of the Board is EUR 30,000 per year. However, Board members Juho Frilander and Vesa Koskinen shall not be paid any fees from the Board activities. For the financial year ended 30 September 2019, the fees paid to the members of Musti’s Board totaled EUR 150,000.
Remuneration of the CEO and management team
The company’s Board of Directors appoints the CEO and decides on the terms of the CEO’s service. The Board of Directors decides also on the remuneration and its terms of the CEO and the members of the management team. The remuneration of the CEO and other members of the management team consists of fixed monthly salary and a bonus. The terms of the bonus is decided by the parent company’s board of directors annually.
The CEO’s period of notice is 6 months and he/she has a right for the notice period salary and for the performance bonuses until the date of the notice. In addition, when terminated by the company, the CEO is entitled, under certain conditions, to an amount equivalent to a six months’ full salary.
The CEO of the Group is entitled to a statutory pension and the retirement age is determined by the statutory earnings-related pension scheme. The retirement age of the CEO is 63 years under current legislation. The CEO has a life insurance and supplementary pension insurance on behalf of Musti Group. He receives the supplementary pension at the age of 63.
The following table sets forth the remuneration paid to the Musti’s CEO and management team for the period 1 Oct 2018–30 Sep 2019.
|EUR thousand||1 Oct 2018–30 Sep 2019|
|Salaries, fees and retirement benefits of the CEO|
|Salaries and other short-term employee benefits||326|
|Pension costs – defined contribution plans||86|
|Salaries, fees and retirement benefits of the management team (excluding the CEO)|
|Salaries and other short-term employee benefits||1,698|
|Pension costs – defined contribution plans||411|
Musti Group shall publish its Remuneration Statement on the company’s website in accordance with the governance code.
The Board of Directors decides on Musti Group’s remuneration schemes and plans, such as short- and long-term incentive schemes as well as pension arrangements, upon the recommendation of the Remuneration Committee and in accordance with the company’s effective remuneration policy. Musti Group will present a remuneration policy for approval to the shareholders for the first time at the Annual General Meeting 2021.
The company operates a bonus scheme, which is determined by the Board of Directors of the company upon the recommendation of the Remuneration Committee and in accordance with the company’s effective remuneration policy. The CEO and the members of the management team are eligible to participate in the bonus scheme in accordance with the company’s bonus policy. The payment of annual bonuses is conditional upon attainment of key performance targets of the company.
The bonuses of the CEO and the management team are based on personal targets and certain profitability targets set for the financial year. The maximum performance bonus is equivalent to an eight months’ full salary for the CEO and a four months’ full salary for the members of the management team.
In May 2020, Musti Group Plc’s Board decided on two new share-based long-term incentive plans for the management team and key employees. The plans consist of a performance share plan (PSP) as the main structure, and of a restricted share plan (RSP), which is a complementary share plan for special situations. The new share-based compensation schemes were communicated in a stock exchange release on 7 May 2020. The plans will form a part of Musti Group plc’s remuneration programs for its key employees, and the aim of the PSP is to align the objectives of the shareholders and key employees for increasing the value of the Company in the long-term, to commit the key employees to the Company and to offer them competitive incentive schemes that are based on earning and accumulating shares.
The performance share plan consists of three performance periods of three years each 2020-2022, 2021-2023 and 2022-2024. The Board of Directors will decide separately for each performance period the plan participants, performance criteria, and the related targets, as well as the minimum, target, and maximum reward potentially payable based on target attainment.
The Restricted Share Plan (RSP) consists of plans on which the vesting period is 12-36 months based on decisions made by the Board of Musti Group Plc. The possible rewards are paid partly in Musti Group Plc’s shares and partly in cash. As of 30 September 2020, there were no participants added to the RSP plan.
In the first performance period, the plan has 11 participants at most and the targets for the long-term PSP incentive plan relate to the Group’s total shareholder return (TSR) and adjusted EBITA. The maximum number of shares to be paid based on the first performance period is approximately 250,000 Musti Group Plc’s shares, which corresponds to approximately EUR 3.0 million calculated with the volume weighted average share price on the trading day preceding the Board’s decision. The number of shares represents gross earning, from which the withholding tax and possible other applicable contributions are deducted, and the remaining net amount is paid in shares. However, the company has the right to pay the reward fully in cash under certain circumstances. Potential rewards from the first performance period will be paid out during the autumn of 2022.
For the financial year ending 30 September 2020, EUR 276 thousand has been recognized as an expense from long-term incentives on the statement of income.