Remuneration

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

Alma Media applies 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.

In February 2020, in accordance with the EU Shareholder Rights Directive, Alma Media published its Remuneration policy, which documents the principles of the remuneration of the  Groups governing bodies and the key terms applicable to service contracts.


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.

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. 

In accordance with the proposal of the Shareholders’ Nomination Committee, the Annual General Meeting decided that the remuneration be kept unchanged, 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 2021: to the Chairman of the Board of Directors, EUR 62,500 per year; to the Vice Chairman, EUR 40,000 per year, and to members EUR 32,500 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, the Chair of the Nomination and Compensation Committee a fee of EUR 1,000, the Deputy Chairs of the committees a fee of EUR 700 and members a fee of EUR 500 for those Board and Committee meetings that they attend. The travel expenses of Board members will be compensated in accordance with the company’s travel policy.

The attendance fees for each meeting are:

- 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 2020 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 2020 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 on the Board has ended. The company is liable to pay any asset transfer taxes which may arise from the acquisition of shares.

Information on fees paid to the Board of Directors can be found in the remuneration report.

Remuneration of the President and CEO

The Board of Directors of Alma Media Corporation decides on the salary and reward scheme of the parent company’s President and CEO on the basis of the proposal of the Nomination and Compensation Committee.
 

The fixed components of the remuneration of the President and CEO, such as the basic salary, fringe benefits and pension benefits, are based on the President and CEO’s service contract. The variable components, the short-term incentive bonus scheme and the long-term share-based incentive scheme are based on pre-defined and measurable performance and result criteria. Maximum limits have been set for the variable remuneration components. 

The President and CEO’s earning opportunity based on incentive schemes is set at a competitive level in accordance with the market. Remuneration is closely aligned with the principle of performance-based remuneration. If performance relative to the indicators used in the incentive schemes is good or excellent, the incentive bonuses may represent a significant proportion of the President and CEO’s overall remuneration. The President and CEO’s variable remuneration consists of a short-term incentive (STI) bonus scheme related to the achievement of short-term financial and operational targets and long-term remuneration schemes (LTI). The earning opportunity based on the STI scheme is limited to 66 percent of the President and CEO’s fixed annual salary. The measurement period is five years for the LTI 2015 scheme and three years for the LTI 2019 scheme. Dividing the maximum incentive reward over the remuneration periods on average, the maximum incentive reward based on the LTI scheme is limited to 95 per cent of the President and CEO’s fixed annual salary.

 Basic salaryFixed monetary salary (monthly salary), fringe benefits (company car, mobile telephone benefit, and housing benefit).
In the overall remuneration package, the purpose of the fixed salary is to establish a competitive level of basic remuneration that allows the President and CEO to focus on performing his duties and the long-term implementation of the company’s strategy.
In the overall remuneration package, the purpose of the fringe benefits is to provide benefits that are in line with the company’s current practices as well as market practices.
InsuranceLife and health insurance
PensionIn addition to statutory employment pension security, the President and CEO has a defined contribution group pension benefit. His pension accumulates by 37% of the annual earnings. The CEO has the opportunity to retire upon reaching 60 years of age. The payment of insurance contributions ends at the termination of employment. 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. At this time, the pension is determined on the basis of insurance savings adjusted according to the value development of the investment objects.
It is included in the terms and conditions of Alma Media President and CEO’s group pension insurance that when the insured has been within the scope of the agreement for three years, he has the right to a paid-up policy corresponding to the insurance savings accumulated by the termination of the employment relationship. The paid-up policy includes old-age pension after retirement age, coverage for incapacity for work and coverage in the event of death.
In the overall remuneration package, the purpose of the supplementary pension is to provide a reward for the long-term fulfilment of tasks and obligations.
Short-term remuneration schemeA short-term incentive (STI) bonus scheme related to the achievement of short-term financial and operational targets.
The structure, performance indicators and target levels of the incentive bonus scheme are determined, and may vary, according to the decisions of Alma Media’s Board of Directors. The targets of the President and CEO’s incentive bonus scheme are primarily Group-level result and operational targets.
The incentive bonus of Alma Media’s President and CEO may be up to 66% of his annual salary.
In the overall remuneration package, the purpose of the scheme is to incentivise the achievement of Alma Media’s key financial targets and other key performance targets that support the Group’s strategy at the annual level. 
In addition to the afore-mentioned earning opportunity based on the incentive bonus scheme the President and CEO may be eligible for one-off project bonuses for example based on key development projects, projects relating to significant changes in the group structure or to M&A transactions and based on other one-off projects or arrangements as in each case determined by the Board of Directors.
Long-term remuneration schemeAlma Media’s long-term remuneration scheme consists of a share-based incentive scheme but, subject to the Board of Directors’ decision, it may also be cash-based. When the scheme is share-based, the rewards under it may also be paid in cash subject to the Board of Directors’ decision.
The structure, performance indicators and target levels of the long-term remuneration scheme are determined, and may vary, according to the decisions of Alma Media’s Board of Directors. Depending on the decision of the Board of Directors, there may be one or several structures in effect. The targets under the scheme may be linked to the Group’s strategic objectives, long-term financial targets, the development of shareholder value, the environment, social responsibility and corporate governance, or they may be other performance indicators as decided by the Board of Directors. The performance indicators may measure either absolute or relative performance.
The measurement period is five years for the LTI 2015 scheme and three years for the LTI 2019 scheme. Dividing the maximum incentive reward over the measurement period on average, the maximum incentive reward based on the LTI scheme is limited to 95 per cent of the President and CEO’s fixed annual salary.
In the overall remuneration package, the purpose of the scheme is to incentivise the long-term achievement of Alma Media’s key financial targets and other key performance targets that support the Group’s strategy as well as to increase shareholder value over the long term by aligning the President and CEO’s interests with the interests of the shareholders.  
Severance packagesThe notice period is six months. An additional contractual compensation equal to 12 months’ salary is paid if the employer terminates his contract without the President and CEO 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 dismissal of the President and CEO.

In the event of the service contract being terminated, the potential rewards payable under the remuneration schemes in effect at the time shall be determined according to the criterion that was the basis for the termination of the service contract. As a rule, if the service contract is terminated due to resignation or dismissal, rewards under the remuneration schemes in effect at the time are not paid.

If the service contract is terminated on certain separately defined grounds, such as retirement or permanent disability, part of the rewards based on the remuneration schemes in effect at the time may be paid subject to the terms of the scheme in question.
ClawbackUnder the long-term and short-term incentive schemes, the Board of Directors may reduce, cancel or clawback previously paid rewards in the event of misconduct.
Guidelines concerning share ownershipIn accordance with the Board of Directors’ recommendation concerning share ownership, the President and CEO is expected to retain ownership of at least half of the net shares received through the company’s share-based incentive schemes until the total value of the Alma Media shares held corresponds to at least one year’s fixed gross annual salary.

If the service contract with Alma Media is terminated before the share-based reward is due to be paid, the participant is not, as a rule, entitled to the reward under the scheme.

The objective of the recommendation concerning share ownership is, alongside the share-based incentive scheme, to align the President and CEO’s interest with the interests of the shareholders in order to increase shareholder value in the long term.

In 2019, the main elements of the short-term incentive bonus scheme were based on three criteria: Achievement of Alma Media Group’s financial targets (weight 20%), achievement of the business unit’s financial targets (weight 40%) and achievement of departmental/personal performance targets (weight 40%) for each calendar year.

In 2019, the President and CEO of Alma Media Corporation, Kai Telanne, received a total of EUR 1,111,781 in salary, rewards and benefits, of which incentive bonuses accounted for EUR 182,000 and the share-based incentive scheme accounted for 418,000. In addition, a total of EUR 239,895 was paid into the President and CEO’s supplementary pension arrangement.

EUR 1,000

 

 

 

2019

2018

Salaries and other short-term employee benefits

 

 

717

 723

Post-employment benefits

 

 

371

 368

Granted stock options to be settled in shares

 

354

 468

Total

 

 

 

1,442

1,559

The figures in the table are presented on an accrual basis. The post-employment benefits include the statutory TYEL pension insurance contributions as well as the contributions towards the President and CEO’s supplementary pension arrangement.

Remuneration of the other members of the Group Executive Team

The fixed components of the remuneration of the other members of the Group Executive Team, such as the basic salary, fringe benefits and pension benefits, are based on their service contracts. The variable components, the short-term incentive bonus scheme and the long-term share-based incentive scheme are based on pre-defined and measurable performance and result criteria. Maximum limits have been set for the variable remuneration components. 

Basic salary Fixed monetary salary (monthly salary), fringe benefits (company car, mobile telephone benefit).
Insurance Life insurance and the opportunity to take out health insurance
Pension The members of the Group Executive Team have a defined contribution group pension plan. Pension accumulates at a rate of 15–34% of annual earnings depending on when the person in question became a member of the Group Executive Team. Members of the Group Executive Team have the opportunity to retire upon reaching 60 years of age. The payment of insurance contributions ends at the termination of employment. 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 this case, the pension is determined on the basis of insurance savings adjusted according to the value development of the investment objects.
The terms and conditions of the group pension plan for the members of Alma Media’s Group 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.
Short-term remuneration scheme A short-term incentive (STI) bonus scheme related to the achievement of short-term financial and operational targets. Eligibility for remuneration schemes is determined by the job.
The incentive bonus for members of the Group Executive Team and the heads of business units may not exceed 44% of their respective annual salaries.
In addition to the afore-mentioned earning opportunity based on the incentive bonus scheme the members of the Group Executive Team may be eligible for one-off project bonuses for example based on key development projects, projects relating to significant changes in the group structure or to M&A transactions and based on other one-off projects or arrangements as in each case resolved determined by the Board of Directors.
Long-term remuneration scheme Alma Media’s long-term remuneration scheme consists of a share-based incentive scheme but, subject to the Board of Directors’ decision, it may also be cash-based. When the scheme is share-based, the rewards under it may also be paid in cash subject to the Board of Directors’ decision.
Eligibility for remuneration schemes is determined by the job.
Severance packages The period of notice for the members of the Group 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. If necessary, the President and CEO decides on the dismissal of the members of the Executive Team.
This compensation corresponding to six months’ salary is not paid if the Group Executive Team member resigns on their own initiative.
Clawback Under the long-term and short-term incentive schemes, the Board of Directors may reduce, cancel or claw back previously paid rewards in the event of misconduct.
Guidelines concerning share ownership In accordance with the Board of Directors’ recommendation concerning share ownership, each member of the Group Executive Team is expected to retain ownership of at least half of the net shares received through the company’s share-based incentive schemes until the total value of the Alma Media shares held corresponds to at least one year’s fixed gross annual salary.
If the service contract with Alma Media is terminated before the share-based reward is due to be paid, the participant is not, as a rule, entitled to the reward under the scheme.

The total amount of salaries, rewards and benefits paid to other members of the Group Executive Team was EUR 2,874,768, of which EUR 333,000 was based on the incentive bonus scheme and EUR 862,000 on the share-based incentive scheme. In addition, a total of EUR 351,461 was paid into the supplementary pension arrangement for the Group Executive Team’s members.

EUR 1,000

   

2019

2018

Salaries and other short-term employee benefits

  

2,054

 2,227

Benefits paid in connection with dismissal

 

0

 0

Post-employment benefits

  

713

 774

Granted stock options to be settled in shares

 

673

 928

Total

   

3,440

3,929

The figures in the table are presented on an accrual basis. The post-employment benefits include the statutory TYEL pension insurance contributions as well as the contributions towards the supplementary pension arrangement for the members of the Group Executive Team

Incentive bonus scheme (short-term retention and incentive scheme)

Alma Media has annually determined incentive bonuses for the purpose of short-term remuneration. Alma Media’s Board of Directors decides on the criteria for the management’s incentive bonus scheme annually. The principles of Alma Media's management incentive scheme are in line with the terms of Alma Media's incentive scheme.

The incentive bonus is determined based on the achievement of Alma Media Group’s financial targets, the business unit’s financial targets, the successful implementation of the business unit’s strategy and the achievement of departmental or individual targets linked to the implementation of the business unit’s strategy for each calendar year.

Alma Media’s Board of Directors monitors and evaluates the achievement of performance and result criteria and their impact on the company’s long-term financial success.

Share-based retention and incentive scheme (long-term retention and incentive scheme)

Long-term retention and incentive scheme for senior management 

In December 2018, Alma Media’s Board of Directors decided on the revised structure of the matching share plan for senior management. The matching share plan for Alma Media’s senior management consists of annually commencing individual plans, each subject to separate Board approval. 

Each individual plan has the following main elements: 
• the participant’s own investment in Alma Media shares is a precondition for participation, 
• matching shares based on the investment in shares, using a fixed multiplier, after a three-year restriction period, 
• the opportunity to earn performance-based matching shares based on a three-year performance period, and 
• a two-year transfer restriction applied to half of the shares received. 

The share rewards will be paid in shares of Alma Media Corporation. 

MSP scheme launched in 2019 (LTI 2019)

In the first matching share plan for the members of Alma Media’s Group Executive Team within the revised plan structure, MSP 2019, the participant will receive two matching shares for each invested share free of charge after a three-year holding period. If all the eligible individuals participate in MSP 2019 by making the required share investment, the maximum aggregate amount of matching shares to be delivered based on the fixed matching ratio is 125,000 shares (representing a gross reward from which the applicable payroll tax is withheld and the remaining net value is paid to the participants in shares). The fixed matching shares will be delivered in the spring of 2022.

In MSP 2019, the potential performance-based matching share rewards will be delivered to the participants after the three-year performance period in the spring of 2022 provided that the performance targets set by the Board of Directors for the plan are achieved.

The performance targets applied to MSP 2019 are based on: 
• The absolute total shareholder return of Alma Media’s share (TSR) 
• The growth of Alma Media’s digital business. 

If the performance targets set by the Board of Directors are achieved in full, the participant will receive in total four performance-based matching shares for each invested share free of charge. In that case, if all the eligible individuals participate in MSP 2019 by making the required share investment, the maximum aggregate amount of performance-based matching shares delivered based on MSP 2019 is 250,000 shares (representing a gross reward from which the applicable payroll tax is withheld and the remaining net value is paid to the participants in shares).

Share-based incentive scheme launched in 2015

In 2015, the Board of Directors of Alma Media Corporation approved the establishment of a long-term share-based incentive scheme for the key management of Alma Media (hereinafter referred to as “LTI 2015”). 
The performance targets applied to LTI 2015 are based on the absolute total shareholder return of Alma Media’s share (TSR) and the company’s profitable growth. 

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 participation in the scheme, matching shares based on the said share investment and the possibility of earning performance-based 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 by the terms of the plan for the receipt of the share-based incentive 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, which commenced in 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.

 

The individual holdings of Alma Media shares on 31 December 2019 were as follows *      
    Performance-based 
   SharesFixed matching share plan 2015 LTIIVmatchingmatching 
pcs   share plan 2015 LTIII, III, IV share plan LTI I, II, III and IVMatching share plan LTI 2019
Jorma Ollila, Chairman of the Board      o      
Petri Niemisvirta, Deputy Chairman of the Board 21,949        
Catharina Von Stackelberg-Hammarén, member of the Board23,164        
Peter Immonen, member of the Board   1,473        
Esa Lager, member of the Board     15,298        
Alexander Lindholm, member of the Board   1,473        
Päivi Rekonen     1,473        
               
Kai Telanne, President and CEO     175,273 36,000 106,000 136,000 135,000
Santtu Elsinen, member of the Group Executive Team   31,736 9,000 24,000 24,000 27,600
Virpi Juvonen, member of the Group Executive Team   20,592 6,000 16,000 20,000 19,800
Tiina Järvilehto, member of the Group Executive Team   21,040 9,000 19,000 23,000 27,600
Kari Kivelä, member of the Group Executive Team     45,175 12,000 35,000 45,000 45,000
Mikko Korttila, member of the Group Executive Team   32,061 9,000 26,000 32,000 27,600
Elina Kukkonen, member of the Group Executive Team   2,500 5,000 5,000 5,000 19,800
Juha-Petri Loimovuori, member of the Group Executive Team   49,987 12,000 38,000 48,000 45,000
Vesa-Pekka Kirsi member of the Group Executive Team   0      
Juha Nuutinen, member of the Group Executive Team   29,884 6,000 23,000 29,000 27,600
Total 473,078 104,000 292,000 362,000 375,000
               
* The figures include holdings of entities under their control as well as holdings of related parties.