Remuneration
Decision-making procedure concerning the remuneration
According to the Limited Liability Companies Act, the Annual General Meeting of shareholders decides on the remuneration payable to the members of the Board of Directors (the “Board”). The Board prepares the presentation for the remuneration of Board members to the General Meeting.
The Board of Directors decides on the remuneration of the CEO and members of the Management Team. With respect to the members of the Management Team, the Remuneration Committee is responsible for, among other things, preparing proposals concerning remuneration as well as incentive and other benefit plans to the Board for approval.
With respect to the CEO, the Remuneration Committee reviews and prepares proposals to the Board on corporate goals and objectives relevant to the compensation of the CEO. The Remuneration Committee also evaluates the performance of the CEO in light of these goals and objectives and prepares a proposal to the Board on the compensation of the CEO (including each of the components thereof) based on its evaluation.
The Remuneration Committee of the Board of Directors is responsible for reviewing and preparing proposals to the Board of Directors on overall compensation policies. The Remuneration Committee is also responsible for ensuring that the CEO and the members of the Management Team are rewarded appropriately for their contributions to the company’s growth and profitability and that compensation policies are aligned with the company’s business strategy, long-term financial success and shareholder interests. The Remuneration Committee also reviews and evaluates on at least an annual basis the company’s compensation and other benefit plans, including incentive compensation and equity-based plans and programs.
Main principles of remuneration
The objective of Musti Group’s remuneration program is to promote the company’s competitiveness and to support the execution of the company’s strategy. Furthermore, the remuneration programs aim to retain key persons and the whole staff and create long-term commitment in order to achieve shared goals and to create shareholder value.
Remuneration of the Board of Directors
The remuneration for the Board of Directors is monetary. Board members are not compensated separately for Board meetings. Travel expenses resulting from Board meetings are compensated in accordance with the company’s travelling compensation regulations. Remuneration for the company’s Board members does not include pension payments.
Members of the Board of Directors are not included in Musti Group’s short-or long-term incentive programs.
Remuneration of the CEO and Management Team
The remuneration of the CEO and other members of the Management Team consists of fixed monthly salary and annually set bonus potential. The terms of the bonus are decided annually by Musti Group’s Board of Directors.
The CEO and the Management Team members are eligible to participate in the bonus scheme in accordance with the company’s bonus policy. The bonuses of the CEO and the Management Team are based on personal targets and certain profitability targets set for the financial year. For the financial year 2020, the maximum performance bonus was equivalent to a six months’ full salary for the CEO, four months’ full salary for the CFO and a three months’ full salary for rest of the management team.
Terms of service of the CEO and Management Team
The CEO’s period of notice is twelve months. The CEO has a right to 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 twelve months’ full salary.
The period of notice for other Management Team members varies between 3-6 months. Members of the Management Team are entitled to their monthly salary during their period of notice.
The CEO and the members of the Management Team are 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 is entitled to a life insurance and supplementary pension payments on behalf of Musti Group in accordance with a contribution-based pension agreement concluded with the company. The CEO receives the supplementary pension at the age of 63.
Remuneration of the Board of Directors
The Annual General Meeting decided, in accordance with the proposal of the Board of Directors that the members of the Board of Directors be paid the following annual remuneration:
- Chair of the Board of Directors: EUR 65,000
- Other members of the Board of Directors: EUR 35,000
In addition, members of the Audit Committee and the Remuneration Committee of Board of Directors will be paid the following annual remuneration:
- Chair of the Committee: EUR 7,500
- Other Committee members: EUR 5,000
Share-based incentive plans
The Board of Directors of Musti Group plc decided on 7 May 2020 on a share-based long-term incentive plan for the management team and the key employees, the Performance Share Plan (PSP) 2020-2024. On 16 December 2022, the Board of Directors of Musti Group plc decided to launch a new share-based incentive plan for Musti Group’s key employee, the Performance Share Plan (PSP) 2023-2027.
The aim of a share-based compensation plans is to align the objectives of the shareholders and key employees for increasing the value of the company in the long-term. The plans are also 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 consists of three 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 each 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 for covering taxes and tax-related costs arising from the reward to a participant.
The company’s group 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 group Management Team continues.
Performance Share Plan 2023–2027
The Performance Share Plan 2023–2027 consists of three consecutive performance periods, covering the financial years of 2023–2025, 2024–2026 and 2025–2027.
The Board of Directors decides on the plan’s performance criteria and targets to be set for each criterion at the beginning of each 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 for covering taxes and tax-related costs arising from the reward to a participant.
The company’s group 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 group Management Team continues.
Remuneration Report and Remuneration Policy
