Remuneration
Remuneration of Etteplan Oyj governing bodies is based on the Remuneration Policy that was presented to the Annual General Meeting held on April 9, 2024. The Remuneration Policy is applied until the Annual General Meeting in 2028, unless the Board of Directors decides to present it to the General Meeting earlier.
Etteplan is growth company that aims to achieve profitable growth and create value for its owners. Strong performance and achievements in both growing the Company and ensuring profitability are rewarded at Etteplan. This has generated a personnel remuneration policy that aligns with the interests of the Company and its stakeholders while engaging and motivating key personnel to act in line with shared goals.
Etteplan’s main remuneration principles are 1) result-based and performance-based remuneration, 2) transparent and uniform remuneration principles and scheme, 3) competitive overall pay level and 4) increasing Company growth and value. The Company’s reward strategy emphasizes performance-based remuneration for the Company’s growth, success of its business operations, and engaging personnel.
The same principles are observed in the remuneration practices of the CEO. However, compared to Etteplan personnel on average, variable remuneration components, i.e. an annual performance bonus and a long-term incentive plan reward, constitute a significant share of the CEO’s overall remuneration. This ensures maintaining a strong connection between the Company’s financial performance and CEO remuneration. The Board of Directors decides on the structure and details of variable remuneration components annually. The annual performance bonus and long-term incentive plan reward typically constitute approximately half of the CEO’s overall remuneration.
The General Meeting shall decide on the remuneration payable for Board and Committee work as well as the basis for its determination. The Nomination and Remuneration Committee has been assigned the duty of preparing the remuneration of the Board. The Board of Directors shall decide on the remuneration of the CEO as well as other compensation payable to him or her. The compensation principles for the Management Group are determined by the CEO in cooperation with the Board of Directors.
Decisions on the remuneration of the Board of Directors are made annually by the Annual General Meeting. According to the resolution made by the Annual General Meeting held on April 9, 2024 the annual remuneration of the Chairman of the Board is EUR 84,000 and of a member of the Board EUR 42,000. The annual remuneration is paid in cash.
According to the resolution made by the Annual General Meeting held on April 9, 2024, the remuneration for the Chairmen of the Board of Directors as well as the Audit Committee and Nomination and Remuneration Committee is EUR 1,200 per meeting. The remuneration for each member of the Board of Directors as well as the Audit Committee and Nomination and Remuneration Committee is EUR 600 per meeting. This attendance remuneration is paid for each meeting the Chairmen or members attend. Daily allowances and travel expenses are paid to the Board members according to the Company’s travel policy.
The annual remuneration of the Board of Directors is not paid partially in shares, share-based rights or in cash with an obligation to acquire Company shares. The members of the Board are not part of the Company’s long-term incentive plan and they have not received other financial benefits during the financial period of 2024. The members of the Board do not have an employment or service contract with the Company nor do they act as advisors for the Company.
The Annual General Meeting held on April 9, 2024 re-elected Matti Huttunen, Robert Ingman, Päivi Lindqvist, Tomi Ristimäki, Sonja Sarasvuo and Mikko Tepponen to the Board of Directors. Leena Saarinen acted as a Board member and a member of the Audit Committee until the Annual General Meeting 2024.
The CEO’s remuneration comprises a fixed annual salary (including car, phone, and medical benefits) and variable remuneration components, i.e. an annual performance bonus and a long-term incentive plan reward. The fixed annual salary is reviewed annually. The share of the variable remuneration components was 14,5 percent of the CEO’s overall remuneration in the financial period of 2024.
The term of notice for the CEO is six months. In the event of dismissal, the CEO is at the most entitled to receive compensation equivalent to 18 months’ salary which includes the salary for a six-month term of notice. In the financial period 2024, no additional accrual basis pension insurance policy was paid for the CEO.
Annual performance bonus
The annual performance bonus of the CEO is based on result targets which support the implementation of the Company’s strategy and which are determined by the Board of Directors annually. These targets usually relate to key figures, e.g. operative growth and result objectives, or objectives supporting sustainability The maximum amount of annual performance bonus is 100 percent of the annual salary. The annual performance bonus is always paid in cash after each one-year earning period in the financial period following the earning period.
In the financial period of 2024 the CEO received an annual performance bonus of EUR 78,795. The performance bonus was accrued in the financial period of 2023. The performance bonus was 17 percent out of the maximum amount. The proportion of the performance bonus was 100 percent of the variable remuneration components in the financial period of 2024.
In the financial period of 2024 the structure of the annual performance bonus remained unchanged and the essential targets were updated. The possible bonus will be paid in the financial period of 2025.
Share-based incentive plan
The long-term remuneration of the CEO is based on a share-based incentive plan. The Board of Directors decides on the incentive plan in three year intervals, and it is based on the targets to promote the Company long-term financial performance, growth, increase in shareholder value as well as support sustainability. The purpose of the long-term incentive plan is to reward the creation of long-term shareholder value and the achievement of set strategic and financial targets. The objective of the program is to engage the CEO to the Company and align the interests of the CEO and shareholders. The potential reward of the plan will be paid in the financial period following the earning period.
The CEO belongs to a share-based incentive plan for the Group key personnel that was established by the Board of Directors on April 19, 2023. The plan includes one earning period comprising calendar years 2023-2025. The aim of the plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the Company, to commit the key personnel to the Company, and to offer them a competitive reward plan based on holding the Company shares. The earnings criteria of the plan are Etteplan Group´s revenue increase and earnings per share development. Approximately 35 people belong to the plan, including the CEO and other Management Group members. The potential reward will be paid after the end of the earning period in 2026 partly in the Company's shares and partly in cash. The proportion to be paid in cash is intended to cover taxes and tax-related costs arising from the reward to the key personnel.
The CEO belonged to a share-based incentive plan for the Group key personnel that was established by the Board of Directors on May 5, 2020. The plan included one earning period comprising calendar years 2020-2022. The earnings criteria of the plan were Etteplan Group´s revenue increase and the development of Total Shareholder Return (TSR), and the plan included approximately 25 people. According to the decision of the Board of Directors the rewards paid on the basis of the plan corresponded to the value of an approximate maximum total of 390,000 Etteplan Oyj shares (including also the proportion to be paid in cash). The reward was paid in April 2023, and the CEO received according to the plan a total reward of EUR 898,299, constituting 26,891 Company shares and a cash reward intended to cover taxes and tax-related costs arising from the reward. The proportion of the share-based incentive plan reward was 80 percent of the variable remuneration components in the financial period of 2023.
The CEO belonged to a share-based incentive plan established by the Board of Directors which was intended for key personnel and comprised the calendar years 2017-2019. The earnings criteria of the plan were Etteplan Group´s revenue increase and the development of Total Share-holder Return (TSR), and the plan included approximately 20 people. According to the decision of the Board of Directors the rewards paid on the basis of the plan corresponded to the value of an approximate maximum total of 260,000 Etteplan Oyj shares (including also the proportion to be paid in cash). The reward was paid in April 2020, and the CEO received according to the plan a total reward of EUR 321,512, constituting 20,901 Company shares and a cash reward intended to cover taxes and tax-related costs arising from the reward. The proportion of the share-based incentive plan reward was 71 percent of the variable remuneration components in the financial period of 2020.
The remuneration of Management Group members comprises a fixed annual salary (including car, phone and medical benefits) and variable remuneration components, i.e. an annual performance bonus and a long-term incentive plan reward.
The term of notice for Management Group members is at least four months. In the event of dismissal, Management Group members are at the most entitled to receive compensation equivalent to 10 months’ salary which includes the salary for a four-month term of notice. In the financial period of 2024, no additional accrual basis pension insurance policy was paid for the Management Group members.
Annual performance bonus
The annual performance bonus of Management Group members consists of key targets based on the Group’s financial result and other financial and operative targets that are decided on annually by the CEO and the Board of Directors. The maximum amount of annual performance bonus is 33-100 percent of the annual salary. The annual performance bonus is always paid in cash after each one-year earning period in the financial period following the earning period.
In the financial period of 2024 Management Group members received an annual performance bonus of EUR 214,240 in total. The performance bonus was accrued in the financial period of 2023.
In the financial period of 2024 the structure of the annual performance bonus remained unchanged and the essential targets were updated. The possible bonus will be paid in the financial period of 2025.
Share-based incentive plan
The long-term remuneration of Management Group members is based on a share-based incentive plan. The Board of Directors decides on the incentive plan in three year intervals and it is based on the strategic development of the business operations of the Group, financial indicators and total shareholder return. In addition to remuneration, the objective of the program is to engage Management Group members to the Company and align the interests of Management Group members and shareholders. The potential reward of the plan will be paid in the financial period following the earning period.
The Management Group members belong to a share-based incentive plan for the Group key personnel that was established by the Board of Directors on April 19, 2023. The plan includes one earning period comprising calendar years 2023-2025. The aim of the plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the Company, to commit the key personnel to the Company, and to offer them a competitive reward plan based on holding the Company shares. The earnings criteria of the plan are Etteplan Group´s revenue increase and earnings per share development. Approximately 35 people belong to the plan. The potential reward will be paid after the end of the earning period in 2026 partly in the Company's shares and partly in cash. The proportion to be paid in cash is intended to cover taxes and tax-related costs arising from the reward to the key personnel.
Management Group members belonged to a share-based incentive plan for the Group key personnel that was established by the Board of Directors on May 5, 2020. The plan included one earning period comprising calendar years 2020–2022. The earnings criteria of the plan were Etteplan Group´s revenue increase and the development of Total Shareholder Return (TSR), and the plan included approximately 25 people. According to the decision of the Board of Directors the rewards paid on the basis of the plan corresponded to the value of an approximate maximum total of 390,000 Etteplan Oyj shares (including also the proportion to be paid in cash). The reward was paid in April 2023, and the the Management Group members received according to the plan a total reward of EUR 1,389,893, constituting 43,141 Company shares and a cash reward intended to cover taxes and tax-related costs arising from the reward.
Management Group members belonged to share-based incentive plan established by the Board of Directors which was intended for key personnel and comprised the calendar years 2017–2019. The earnings criteria of the plan were Etteplan Group´s revenue increase and the development of Total Share-holder Return (TSR), and the plan included approximately 20 people. According to the decision of the Board of Directors the rewards paid on the basis of the plan corresponded to the value of an approximate maximum total of 260,000 Etteplan Oyj shares (including also the proportion to be paid in cash). The reward was paid in April 2020, and the Management Group members received according to the plan a total reward of EUR 598,338, constituting 37,273 Company shares and a cash reward intended to cover taxes and tax-related costs arising from the reward.