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 the company’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.
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 management team.
Share-based incentive plans
The Board of Directors of Musti Group Plc has decided to establish two new share-based incentive plans for the Group key employees. The aim 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.
Performance Share Plan 2020–2024
The Performance Share Plan 2020–2024 consists of three consecutive performance periods, covering the financial years of 2020–2022, 2021–2023 and 2022–2024. The Board of Directors decides on the plan’s performance criteria and targets to be set for each criterion at the beginning of a performance period.
The potential reward based on the plan will be paid party in the Company’s shares and partly in cash after the end of each performance period. The cash proportion is intended to cover taxes and tax-related expenses arising from the reward to a participant. No reward is paid, if the participant’s employment or service terminates for reasons related to the participant before the reward payment.
The Company’s Management Team Member is obliged to hold at least 50 per cent of the net number of shares paid to the member on the basis of the plan, until the value of his or her total shareholding in the Company equals to 50 per cent (100 per cent for the CEO) of his or her annual base salary. Such number of Shares must be held as long as the membership in the Management Team continues.
During the performance period FY2020–FY2022, the reward is based on the Group’s Adjusted EBITA and Total Shareholder Return (TSR).
The rewards to be paid based on the performance period FY2020–FY2022 correspond to the value of an approximate maximum total of 250,000 Musti Group Plc shares, including also the proportion to be paid in cash. During the performance period FY2020–FY2022, approximately 10 persons, including the Company’s Management Team members, are included in the target group of the plan.
Restricted Share Plan 2020–2022
The reward from the Restricted Share Plan 2020–2022 is based on a valid employment or service and the continuity of the employment or service during a vesting period. The reward is paid partly in the Company’s shares and partly in cash after the end of a 12–36-month vesting period. The Restricted Share Plan is intended for selected key employees only, including the Management Team members. The rewards to be allocated based on the Restricted Share Plan during the years 2020–2022 correspond the value of a maximum total of 30,000 Musti Group Plc shares, including also the proportion to be paid in cash.