Renumeration Statement 2015
Corporate Governance Statement 2015
(Remuneration Statement on pages 12-14)
Decision-making order and key principles in remuneration at Stockmann
Stockmann plc’s highest decision-making body is the General Meeting of shareholders. The Annual General Meeting decides on the remuneration and other benefits to be paid to the members of the Board of Directors for their board and committee work annually. The proposal for the remuneration is prepared by the Shareholders’ Nomination Board. The Board members are not participating in the company’s incentive or share option schemes for key personnel.
The power to appoint and dismiss the company’s CEO rests with the Board of Directors, which also decides on the terms and benefits of the CEO’s service, and these are set out in writing in the CEO agreement. The Board also appoints other members of the Group’s Management Team and decides on their salaries and other benefits on the basis of proposals by the Compensation Committee.
The Board of Directors also approves each year the criteria for determining the incentive pay for the Group’s CEO and Management Team members, on the basis of proposals by the Compensation Committee. The incentive pay is determined on the basis of the Group’s financial and other objectives related to the implementation of the strategy.
Remuneration of members of the Board of Directors
The remuneration to the Board members is paid in cash or company shares. There is no restriction on the ownership period pertaining to the shares received as remuneration.
During the 2015 financial year, EUR 76 000 was paid in fixed fees to the chairman of the Board, EUR 49 000 to the vice chairman, and EUR 38 000 each to the other Board members, in accordance with the decisions of the General Meeting of 19 March 2015. About 50 per cent of the annual remuneration was paid in company shares and the rest in cash. The Chairman of the Board was paid EUR 1 000 and members of the Board of Directors were paid a meeting attendance fee of EUR 500 for each Board meeting.
The Chairman and the members of the Board Committees were also paid an attendance fee for the Committee meetings. The Chairman of the Audit Committee was paid EUR 1 000 and each member was paid EUR 700 as a meeting remuneration for each meeting of the Audit Committee, and the Chairman and each member of the Compensation Committee was paid EUR 500 as a meeting remuneration for each meeting of the Committee.
During the 2015 financial year the Board members were paid a total of EUR 210 028 (2014: EUR 228 869) in cash and 30 411 (2014: 16 708) of the company’s Series B shares as payment in shares. The value of shares was EUR 211 872 on the date of share purchases. The total value of the remuneration was EUR 421 900 (2014: EUR 415 500).
Persons who have become Board members before 2004 fall within the sphere of voluntary TyEL insurance under the Employees Pensions Act.
The shareholders’ Nomination Board proposes to the Annual General Meeting on 15 March 2016 that the remuneration of the members of the Board of Directors remain at the present level.
Financial benefits pertaining to the post of CEO
Updated on 12 September 2016:
Lauri Veijalainen has been Stockmann plc's CEO since 12 September 2016. Before this Veijalainen has served as Stockmann’s interim CEO from 4 April 2016.
The remuneration of the CEO consists of a fixed salary which includes a fringe car benefit, as well as a performance pay system with short-term and long-term targets. The performance pay is tied to financial and operational targets and other objectives related to the implementation of the strategy. The earning period for the short-term performance pay is a calendar year and the maximum pay-out is 60 per cent of the fixed base salary. The earning period for the long-term performance pay will expire at the end of 2018, and the pay-out may not exceed 50 per cent of the fixed base salary in 2018
Veijalainens pension accumulates and the retirement age is determined in accordance with Finnish employment pension legislation. The period of notice is 6 months from both the company's and the CEO's side. If the company terminates the CEO agreement, the CEO will be entitled to a severance payment equivalent to 9 months’ pay.
Per Thelin was Stockmann plc’s CEO from 10 November 2014 until 4 April 2016.
In 2015, CEO Per Thelin was paid a fixed salary of EUR 430 516 (2014: EUR 61 848). The fixed salary consist of EUR 420 533 (2014: EUR 60 518) in cash and EUR 9 983 (2014: EUR 1 330) in fringe benefits. The CEO had also from 1 January 2015 a performance pay tied to the Group’s financial and other objectives related to the implementation of the strategy. The performance pay amount was no more than 72 per cent of the fixed basic salary. The CEO was not given shares or share options as part of remuneration.
Thelin’s retirement age was determined in accordance with Finnish employment pension legislation. The CEO’s pension was accrue on the basis of the Employees’ Pensions Act and a separate, voluntary defined contribution pension insurance taken out by the company. In 2015, the voluntary insurance contribution was EUR 27 988 (2014: EUR 4 856).
If the company terminates the CEO agreement, the notice period will be 6 months, in addition to which the CEO will be entitled to a severance payment equivalent to 6 months’ pay. If the CEO terminates his agreement, the notice period will be 3 months.
Financial benefits pertaining to other Management Team members
For members of the Group’s Management Team other than the CEO, a total of EUR 2 306 281 was paid in fixed salaries in 2015 (2014: EUR 2 367 918). The fixed salary consists of EUR 2 229 312 in cash (2014: EUR 2 301 162) and EUR 76 969 in fringe benefits (2014: EUR 66 756). The Group Management Team members have a performance pay tied to the Group’s financial and other objectives related to the implementation of the strategy. The performance pay may amount to no more than 25 per cent of the fixed basic salary (2016: 30 per cent). Due to the earnings performance in 2014, no incentive pay was paid in 2015 (2014: EUR 0).
On 16 March 2010, the General Meeting decided on share option schemes for key personnel as part of the incentive and commitment scheme for management. Some of the Group’s Management Team members are covered by the 2010 Key personnel share option scheme as part of Stockmann plc’s long-term incentive schemes. The terms of the share option scheme and information on the options and shares in the ownership of the members of the Management Team are available on the company’s website stockmanngroup.com.
The retirement age of the Management Team members is 63 or 65, depending on the particular executive agreement in question. In addition to the CEO, two of the management team members have voluntary earnings-related pension insurances taken by the company as of the end of 2015. The costs of the insurances in 2015, for others than the CEO, amounted to EUR 83 670 (2014: EUR 160 554).
The notice period for the Management Team members are mostly 6 months from both sides. One Management Team member has a notice period of 3 months from the company’s side and two members have a notice period of 3 months from the director’s side. If the company terminates the agreement, the management team members are in addition entitled to a severance payment equivalent to 3 or 6 months’ pay depending on their agreement in question.