Remuneration

Detailed information on the compensation of the Board of Directors and the management.

In 2017 Alma Media applied the Finnish Corporate Governance Code 2015 for listed companies, issued by the Securities Market Association on 1 October 2015, in its unaltered form.

The Finnish Corporate Governance Code for listed companies can be reviewed on the website of the Securities Market Association or on Alma Media's page.

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. The Shareholder's Nomination Committee of Alma Media Corporation prepares proposals related to the election and remuneration of the members of the Board of Directors to the Annual General Meeting.

In accordance with the proposal of the Shareholders’ Nomination Committee, the AGM decided on March 15, 2019 that the annual remuneration of the Board of Directors be increased, as it had been unchanged since 2016, and that the following annual remuneration be paid to the members of the Board of Directors for the term of office ending at the close of the Annual General Meeting 2020: to the Chairman of the Board of Directors, EUR 62,500 (previously 40,000) per year; to the Vice Chairman, EUR 40,000 (previously 32,000) per year, and to members EUR 32,500 (previously 27,000) per year.

In addition, the Chair of the Board of Directors and the Chair of the Audit Committee will be paid a fee of EUR 1,500 (previously EUR 1,000), the Chair of the Nomination and Compensation Committee a fee of EUR 1,000 (previously EUR 1,000), the Deputy Chairs of the committees a fee of EUR 700 (previously EUR 700) and members a fee of EUR 500 (previously EUR 500) for those Board and Committee meetings that they attend. It is proposed that the travel expenses of Board members be compensated in accordance with company travel regulations.
It is proposed that the above-mentioned attendance fee for each meeting be

- doubled for (i) members living outside Finland in Europe or (ii) meetings held outside Finland in Europe; and
- tripled for (i) members resident outside Europe or (ii) meetings held outside Europe.

The members of the Board shall, as decided by the Annual General Meeting, 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 trading price on the regulated market arranged by the Helsinki Stock Exchange. Members of the Board are required to arrange the acquisition of the shares within two weeks of the release of the first quarter 2019 interim report or, if this is not possible due to insider trading regulations, as soon as possible thereafter. If it is not possible to acquire the shares by the end of 2019 for a reason such as pending insider transactions, the annual remuneration shall be paid in cash. Shares acquired in this way cannot be transferred until the recipient’s membership of the Board has ended. The company is liable to pay any asset transfer taxes which may arise from the acquisition of shares. 
Year Name Position Board meetings 
 
 
Audit 
Committee 
Nomination and Compensation Committee Fees 
total 
     Annual fee  Annual fee paid 
in shares, no. of shares* 
Meeting 
fees 
     
2018 Petri Niemisvirta  Chairman ¹) 
 
40,000  2,182  11,400    5,000  56,400 
2017 Petri Niemisvirta  Deputy Chairman  32,000  2,273  9,800  -  4,000  45,800 
2018 Harri Suutari  Chairman 2) 
 
 
-  -    2,000  -  1,000     3,000 
2017 Harri Suutari  Chairman  40,000  2,841  13,000  -  2,000  55,000 
2018 Catharina Stackelberg-Hammarén  Deputy Chairman 3)  32,000  1,745   8,000     500   3,000  43,500 
2017 Catharina 
Stackelberg- 
Hammarén 
Member  27,000  1,918  7,000  2,500  -  36,500 
2018 Peter Immonen  Member4)  27,000  1,473  5,000  -   6,000  38,000 
2018 Matti Korkiatupa  Member  27,000  1,473   6,000     500   3,000  36,500 
2017 Matti Korkiatupa  Member  27,000  1,918  7,000  2,500  -  36,500 
2018 Esa 
Lager 
Member  27,000  1,473   6,000  5,000  -  38,000 
2017 Esa 
Lager 
Member  27,000  1,918   6,500  5,000  -  38,500 
2018 Alexander Lindholm  Member 4)  27,000  1,473    5,000   2,000  -  34,000 
2018 Päivi Rekonen  Member 4)  27,000  1,473   9,000  4,000  -  40,000 
2018 Mitti Storckovius  Member 5)  -  -   1,000  -   1,000     2,000 
2017 Mitti Storckovius 
 
Member  27,000  1,918   7,000  -   2,000  36,000 
2018 Heike Tyler 
 
Member 4)  27,000  1,473    8,000   2,000     -  37,000 

 *The number of shares corresponds to approximately 40% of the full amount of the annual fee after taxation 

1)Chairman since 14 March 2018, Deputy Chairman until 14 March 2018 
2)Chairman until 14 March 2018 
3)Deputy Chairman since 14 March 2018, member until 14 March 2018 
4)Member since 14 March 2018 
5)Member until 14 March 2018  

In the financial year 2018, the fees paid on an accrual basis to the Board members totalled EUR 328,400. 

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 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 44% of their respective annual salaries. The incentive bonus of Alma Media Corporation’s President and CEO may be up to 66% 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 2018, the President and CEO of Alma Media Corporation received a total of EUR 1,128,356 in salary, rewards and benefits, of which EUR 260,755 was based on the incentive bonus scheme and EUR 393,866 on the share-based incentive scheme. The total amount of salaries, rewards and benefits paid to other members of the Group Executive Team was EUR 3,047,501, of which EUR 503,173 was based on the incentive bonus scheme and EUR 787,732 on the share-based incentive scheme. 

 Annual salary  Performance-based bonuses  Fringe benefits  Option benefits  Share-based payments  
President & CEO          
2018 420,038  260,755  53,697    393,866 
2017 442,689  281,898  52,830    167,265 
2016 445,783  195,043  49,601     
2015 402,210  102,509  48,166     
2014 429,475  20,000  47,478  830   
Group Executive Team          
2018 1,676,001  503,172  80,595    787,732 
2017 1,590,915  417,832      334,530 
2016 1,349,769  206,914  86,467     
2015 1,297,042  136,732  82,093     
2014 1,264,934  41,000  82,026  583   

Share-based incentive plan

The Board of Directors of Alma Media Corporation 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, which commenced in 2015 (LTI 2015 I) the participant receives two matching shares for each invested share free of charge after a two-year vesting period, provided that the other conditions stipulated for the receipt of the share based incentive by the terms of the plan are still satisfied at the time.

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 commenced 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, provided that the other conditions stipulated for the receipt of the share based incentive by the terms of the plan are still satisfied at the time.

 

Share-based incentive schemes started in 2016 and 2017: LTI 2015 II and LTI 2015 III

On 17 March 2016, the Board of Directors of Alma Media Corporation decided on a share-based incentive scheme to be launched in 2016 based on the LTI 2015 scheme (LTI 2015 II) and, on 22 March 2017, the Board made a corresponding decision on a share-based incentive scheme to be launched in 2017 (LTI 2015 III). The main terms of the incentive schemes correspond to those of the share-based incentive scheme that was launched in 2015.

The Board of Directors has estimated that no new shares will be issued in connection with LTI 2015. Therefore, the plan will have no dilutive effect on the number of the company’s registered shares.

The Annual General Meeting of Alma Media Corporation held on 17 March 2016 authorised the Board of Directors to decide on the repurchase of a maximum of 824,000 shares in one or more lots, and further authorised the Board of Directors to decide on a share issue by transferring shares in possession of the company to implement incentive programmes.

The allocation and maximum reward potential of the share-based incentive scheme for the President and CEO and the Group Executive Team: The information covers the LTI I, LTI II and LTI III schemes:

Share-based incentive scheme
LTI 2015
Based on share investment (shares max)Performance matching (shares max)Maximum number of people entitled to participate
Launched in 2015
 LTI 2015 I
159,000 318,000 35
Launched in 2016
LTI 2015 II
195,000 390,000 43
Launched in 2017
LTI 2015 III
195,000 390,000 44
 Based on share investment (shares max.)   Performance matching (shares max.)    
   2017  2018  2015  2016  2017  2018 
Kai Telanne, President and CEO   36,000  36,000  30,000  68,000  72,000  72,000 
Santtu Elsinen*   9,000  9,000  -  12,000  18,000  18,000 
Kari Juutilainen   -      -  -   
Virpi Juvonen   4,000  6,000  4,000  12,000  8,000  12,000 
Tiina Järvilehto   6,000  9,000  4,000-  8,000  12,000  18,000 
Kari Kivelä   13,000  12,000  10,000  20,000  26,000  24,000 
Mikko Korttila   9,000  9,000  6,000  16,000  18,000  18,000 
Elina Kukkonen     5,000  -      10,000 
Juha-Petri Loimovuori   13,000  12,000  10,000  26,000  26,000  24,000 
Raimo Mäkilä   13,000    10,000  26,000  26,000   
Juha Nuutinen   9,000  6,000  6,000  16,000  18,000  12,000 

New share-based long-term incentive scheme LTI 2019: Matching share plan and Performance share plan

In December 2018, the Board of Directors of Alma Media Corporation decided on changes to the share-based, long-term incentive scheme of the company’s top management. At the same time, the Board of Directors decided to establish a new share-based long-term incentive scheme for the other key employees of Alma Media Corporation. The new incentive scheme, LTI 2019, entered into effect from the beginning of 2019.

Severance pay

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 terms of employment of the other members of the Executive Team are decided on by the Board of Directors based on the proposal of the Nomination and Compensation Committee. The President and CEO appoints and, if necessary, dismisses the other members of the Executive Team.

Pension agreements

The CEO of Alma Media Corporation and members of the Group Executive Team have a defined contribution group pension plan. Pension accumulates at a rate of 15–37% of annual earnings depending on when the person in question became a member of the Group Executive Team. 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 2017, the expenses related to the group pension plan for Alma Media's President and CEO totalled EUR 234,683 and for the other members of the Group Executive Team EUR 421,787. In total, the group pension plan expenses amounted to EUR 656,470.

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.