SHARE-BASED INCENTIVE PROGRAM TARGETED TO THE EXECUTIVE BOARD
The Board of Directors of Kotipizza Group Oyj has resolved on a new long-term share-based incentive program targeted to the executive board in May 2016.
The aim of the incentive plan is to strongly combine the objectives of the shareholders and the key employees participating in the program for increasing the company’s value and carrying out the business strategy in a long term as well as to engage the key employees to the company and to offer them a competitive incentive program based on earning shares in the company and the value development of the company.
The new program covers three three-year earning periods. Based on the plan the company may give performance shares in the earning period 1.2.2016-31.1.2019. For earning periods 1.2.2017-31.1.2020 and 1.2.2018-31.1.2021 the company may give also discretionary matching shares based on the key employees’ shareholding in addition to the performance shares. The Board of Directors of the company confirms the performance measures, type and maximum number of the reward shares as well as eligible key employees at the beginning of each earning period.
The performance measures applied are the average growth of Kotipizza Group chain’s total sales and earnings per share in the three-year earning period.
Based on earning period 1.2.2016-31.1.2019 at maximum 47.204 performance shares can be given as reward, which includes the cash payment portion of the reward. The potential reward is to be paid as combination of shares (50%) and a cash payment (50%). With the cash payment it is aimed to cover taxes and tax-like charges resulting for the key employee. The Board of Directors thus anticipates that the maximum dilutive effect on the number of the company’s registered shares for the first earning period is 0,37%. If the employment of the key employee terminates before the payment of the reward, the reward is not, as a rule, to be paid.
REMUNERATION REPORT FROM FINANCIAL YEAR 1 FEBRUARY 2015 – 31 JANUARY 2016
This Remuneration report by Kotipizza Group Oyj is a description on remuneration in the company. The report is updated and revised so that the information it withholds is as up-to-date as possible. Some of the information’s character makes it appropriate to use the information from the previous financial year. The shareholders can use their right to ask questions about the Remuneration during the general meeting.
The report is drafted accordingly to recommendation 47 ”Remuneration” of the Finnish listed companies’ Corporate Governance Code (2010) prepared by the Securities Market Association. The Corporate Governance Code can be viewed for example on the Securities Market Association’s website.
The goal of Kotipizza Group Oyj’s reward system is to promote company’s competitiveness and the economic success for a longer period of time, along with contributing to a favourable development of shareholder value. The Remuneration system is based on fixed and measureable achievement and result criteria.
Board of Directors
In accordance with the Finnish Companies Act, the Annual General Meeting decides on the fees payable to the members of the Board of Directors of Kotipizza Group Oyj. The fees are paid in cash. The members of the Board of Directors of Kotipizza Group Oyj do not belong to share-based reward system of the company and none of the members of the Board of Directors have employment relationship with the company.
The General Meeting of Shareholders on 29.5.2015 resolved that the Chairman of the Board of Directors and Mikael Autio will be paid a monthly fee of EUR 500 and other Members of the Board of Directors a monthly fee of EUR 2,000. The Members of the Board of Directors are not paid separate compensation for attending meetings.
During the financial year which ended 31 January 2016, the fees paid to the members of Kotipizza Group Oyj’s Board of Directors were following:
|Johan Wentzel, Chairman of the Board of Directors||7.000 euros|
|Mikael Autio, member of the Board of Directors||7.000 euros|
|Kim Hanslin, member of the Board of Directors||24.000 euros|
|Minna Nissinen, member of the Board of Directors||24.000 euros|
|Petri Parviainen, member of the Board of Directors||24.000 euros|
|Kalle Ruuskanen, member of the Board of Directors||24.000 euros|
The members of the Board of Directors have not been given any shares of the company or other share-based entitlements during the financial year which ended 31 January 2016.
The key conditions of Kotipizza Group Oyj’s CEO Tommi Tervanen are stated in the written CEO agreement approved by the Board of Directors of the company.
Remuneration of the CEO comprises of a fixed monthly salary, fringe benefits as well as an annual performance bonus based on achieving the economic goals laid down by the Board of Directors. The Board of Directors of Kotipizza Group Oyj confirms the salary and other benefits of the CEO.
Kotipizza Group Oyj’s CEO was paid 218.000 euros during the financial year which ended 31 January 2016. The CEO was not given any shares of the company or other share-based entitlements.
Kotipizza Group Oyj’s CEO has a twelve-month notice period. The CEO is entitled to a compensation corresponding to his salary for twelve months, if he is dismissed by the company.
The Board of Directors decides on the company’s short and long-term reward systems and the fees paid based on them. The remuneration of the company’s CEO and other Management Team comprises of a fixed monthly salary and fringe benefits as well as an annual performance bonus.
For other members of the Management Team, the notice period is four to six months, and they are entitled to the salary for the notice period in accordance with the director contract if dismissed by the company.
The salaries, benefits and cash remuneration of the CEO and other members of the Management Team were 845.000 euros in total for the accounting period which ended 31 January 2016.
Ernst & Youg Oy, firm of authorised public accountants, has served as Kotipizza Group Oyj’s auditor for the financial year ending 31 January 2016. An authorised public accountant, Antti Suominen, has been the chief auditor.
The auditor’s fee is paid annually, in accordance with the Annual General Meeting’s decision. Kotipizza Group Oyj’s Auditor was all in all paid 47.000 euros in auditing fees and 173.000 euros in consultancy fees for the financial year which ended 31 January 2016.
Main principles of remuneration
The company does not have option or share-based incentive programs for the management or the personnel. The company also does not have bonus or other reward system based on the general and published goals of the management and personnel. A part of the personnel has a bonus system based on the individual goals of the personnel.