Detailed information on the compensation of the Board of Directors and the management.
Alma Media applies the Finnish Corporate Governance Code for listed companies, issued by the Securities Market Association on June 15, 2010 and valid as of October 1, 2010, in its unaltered form. This remuneration statement has been prepared in accordance with Section 7 (Remuneration), Recommendation 47.
Remuneration of the members of the Board of Directors
The Annual General Meeting of Alma Media Corporation decides on the remuneration of the Board members, on the basis of a proposal prepared by the Nomination and Compensation Committee of the Board of Directors.
In accordance with the decision of Alma Media’s Annual General Meeting of 2016, the following fees are paid to the Board members for their work in the Board of Directors and its Committees: the Chairman of the Board shall be paid an annual fee of EUR 40,000, the Deputy Chairman EUR 32,000 and ordinary members EUR 27,000. In addition, the chairmen of the Board and the Committees will be paid a fee of EUR 1,000, the deputy chairmen EUR 700 and ordinary members EUR 500 for each Board and Committee meeting they attend. Furthermore, travel expenses will be compensated in accordance with the company’s travel policy.
In accordance with a decision of the AGM, Board members acquire a number of Alma Media Corporation shares corresponding to approximately 40 per cent of the full amount of the annual remuneration for Board members, taking into account tax deduction at source, at the public trading price. Members of the Board are obligated to arrange the acquisition of the shares within two weeks of the release of the first quarter 2016 interim report or, if this is not possible because of insider trading regulations, at the earliest possible time thereafter. If it was not possible to acquire the shares by the end of 2016 for a reason such as pending insider transactions, the remuneration shall be paid in cash. Shares acquired in this way may not be transferred until the recipient’s membership on the Board has expired. The company is liable to pay any asset transfer taxes which may arise from the acquisition of shares.
The members of the Board of Directors were paid the following fees (EUR) for their work on the Board and its committees in 2015, with comparison data from the previous financial period:
|Nomination and Compensation Committee||Fees|
|Annual fee||Annual fee paid|
in shares, no. of shares*
* The number of shares corresponds to approximately 40% of the full amount of the annual fee after taxation
In the financial year 2015, the fees paid on an accrual basis to the Board members totalled EUR 274,500.
Members of the Board of Directors of Alma Media Corporation do not have an employment relationship with the company. They are not included in the option programmes, share-based incentive plans or other incentive programmes of Alma Media and have not received any other financial benefits.
Remuneration of the President and CEO and the top management
The Board of Directors of Alma Media Corporation decides on the salary and reward scheme of the parent company’s President and CEO and the CEO’s direct subordinates, on the basis of the proposal of the Nomination and Compensation Committee.
The reward scheme of the President and CEO of Alma Media Corporation and other senior management consists of a fixed monetary salary (monthly salary), fringe benefits (company car and mobile telephone benefit, and housing benefit for the President & CEO), an incentive bonus related to the achievement of financial and operational targets (short-term reward scheme), a stock option scheme and a share-based incentive scheme for key employees of the Group (long-term reward scheme), as well as a pension benefit for management. Eligibility for remuneration programmes is determined by the job.
The principles of Alma Media's management incentive programme follow the terms and conditions of Alma Media's incentive programme, based on the principle of continuous improvement of performance. The incentive bonus for members of the Group Executive Team and heads of business units may be no more than 40% of their respective annual salaries. The incentive bonus of Alma Media Corporation’s President and CEO may be up to 60% of his annual salary.
The incentive bonus is defined for each calendar year based on three criteria: meeting Alma Media Group's financial targets (weight 40%), meeting the business unit's financial targets (weight 40%) and meeting personal performance targets (weight 20%).
In 2015, the President and CEO of Alma Media Corporation received a total of EUR 552,885 in salary, rewards and benefits, of which EUR 102,509 were based on the incentive bonus scheme. The total amount of salaries, rewards and benefits paid to other members of the Group Executive Team was EUR 1,515,867, of which EUR 136,732 were based on the incentive bonus scheme.
|Annual salary||Performance-based bonuses||Fringe benefits||Option benefits||Share-based payments|
|President & CEO|
|Group Executive Team|
In addition to the incentive remuneration system, Alma Media has the option programme 2009 in effect for Group management. The granting of option rights is decided by Alma Media's Board of Directors on the basis of a proposal by the Nomination and Compensation Committee and according to the terms and conditions decided by the Annual General Meeting. The terms and conditions of the option programme 2009 can be reviewed at Alma Media’s website (pdf).
The option rights granted to the President and CEO of Alma Media and other members of the Group Executive Team (31 December 2015) are as follows:
|Kai Telanne, President and CEO||100,000|
*employment relationship ended on 26 June 2015.
The share subscription period for 2009A and 2009B options has ended.
The stock option rights granted under Alma Media Corporation’s option programme 2009C were not used to subscribe any shares during the financial period 2015.
Share-based incentive plan
The Board of Directors of Alma Media Corporation has approved the establishment of a new long-term share-based incentive programme for the key management of Alma Media (below LTI 2015).
The objective of LTI 2015 is to align the interests of the participants with those of AlmaMedia’s shareholders by creating a long-term equity interest for the participants and, thus, to increase the company value in the long term as well as to drive performance culture, to retain participants and to offer them with competitive compensation for excellent performance in the company.
LTI 2015 consists of annually commencing individual plans, each subject to separate Board approval. Each of the individual plans consists of three main elements: an investment in Alma Media shares as a precondition for the key management member’s participation in LTI 2015, matching shares based on the above share investment and the possibility to earn performance matching shares.
The matching share plan
In the matching share plan the participant receives a fixed amount of matching shares against an investment in Alma Media shares.
In the first matching share plan commencing in the year 2015 the participant will receive two matching shares for each invested share free of charge after a two-year vesting period. If all the eligible key management members participate in the matching share plan by investing the maximum amount of shares, the maximum aggregate amount of the first matching shares is 159,000 shares (gross amount from which taxes are withheld).
The performance matching plan
The performance matching plan comprises a five-year performance period in total. The potential share rewards will be delivered in tranches after three and five years if the performance targets set by the Board of Directors are attained.
The performance measures used in the first performance matching plan commencing in the year 2015 are based on the company’s profitable growth and share value. If the performance targets set by the Board of Directors are attained in full, the participant will receive in total four matching shares for each invested share free of charge. In that case, if all the eligible key management members participate in the performance matching plan by investing the maximum amount of shares, the maximum aggregate amount of the first performance matching shares is 318,000 shares (gross amount from which taxes are withheld).
Eligible to participate in the first plan of LTI 2015, commencing in the year 2015, are 35 persons in the maximum.
The Board of Directors anticipates that no new shares will be issued in connection with the new share-based incentive plan and, therefore, the plan will have no dilutive effect on the number of the company’s registered shares. The Annual General Meeting held on 17 March 2015 authorized the Board of Directors to decide on the repurchase of a maximum of 754,000 shares in one or more lots and, further, to decide on a share issue by transferring shares in possession of the company to implement incentive programmes.
|Based on share investment (shares max)||Performance matching (shares max)|
|Based on share investment (shares max)||Performance matching (shares max)|
|Kai Telanne, President and CEO||30,000||60,000|
*employment relationship ended on 26 June 2015
The period of notice of the President and CEO of Alma Media Corporation, Mr Telanne, is six months. In addition, he has a director contract under which he is entitled to a compensation corresponding to his base salary for 12 months if he is dismissed by the employer without being in breach of contract. This compensation corresponding to the 12-month salary is not paid if the President and CEO resigns on his own initiative. Alma Media’s Board of Directors decides on the appointment and, as necessary, dismissal of the President and CEO.
The period of notice for the other members of Alma Media Group's Executive Team is six months. In addition, members of the Executive Team will receive a compensation corresponding to their respective basic salaries for six months in the event that the dismissal is initiated by the employer without the members' own fault or negligence.
The President and CEO appoints and, if necessary, dismisses the other members of the Executive Team. However, the members of the Group's Executive Team who act as Editors-in-Chief of Aamulehti, Iltalehti, Kauppalehti, Lapin Kansa, Pohjolan Sanomat or Satakunnan Kansa constitute an exception to this procedure. Their appointments and dismissals are confirmed by the Board of Directors of Alma Media Corporation, on the basis of the CEO's proposal.
The CEO of Alma Media Corporation and members of the Group Executive Team have a defined contribution group pension plan. The members of the Executive Team who were appointed before 2008 will receive a contribution of 20% of their annual pay, while other members will receive a contribution of 15% of their annual pay. The retirement age is 60, at which time the contributions end. The pension is determined on the basis of the insurance savings accrued by the time of retirement. Retirement can be postponed up to 70 years of age. In such cases, the pension is determined by the accrued savings adjusted with the value development of the investments.
The terms and conditions of the group pension plan for Alma Media’s President and CEO and the other members of the Executive Team give the insured persons, after three-year insurance coverage, the right to receive a premium-free policy corresponding to the savings accrued until the termination of employment (paid-up policy). The paid-up policy includes old-age pension after retirement age, coverage for incapacity for work and coverage in the event of death. In 2014, the expenses related to the group pension plan for Alma Media's President and CEO totalled EUR 213,345 and for the other members of the Group Executive Team EUR 371,117. In total, the group pension plan expenses amounted to EUR 584,462.
Kai Telanne has held the position of President and CEO at Alma Media Corporation since 2005. The curriculum vitaes of the members of the Group Executive Team, available on CEO and group management page, include information on when they have started in their current positions.