Starting from the financial period 2020, the principles of the remuneration of Sievi Capital’s governing bodies, that is, the Board of Directors and the CEO, are defined in the Remuneration Policy that was first discussed in the Annual General Meeting on 29 April 2020.
Sievi Capital draws up a remuneration report for each financial period. It is presented to the Annual General Meeting each year and explains the remuneration paid and due to the governing bodies for the previous financial period.
Remuneration of the members of the Board of Directors
In accordance with the decision of the Annual General Meeting of 2020, the Chair of the Board of Directors will be paid a remuneration of EUR 3,400 per month and the members of the Board a remuneration of EUR 2,200 per month. In addition, the members of the Board of Directors are reimbursed travel expenses in accordance with the company’s Travel Policy.
Remuneration of the CEO
Sievi Capital’s CEO Jussi Majamaa’s fixed remuneration consists of a monthly salary of EUR 15,000, including fringe benefits.
No short-term or long-term incentives have been defined for the CEO.
The CEO’s service contract is valid until further notice. Both the company and the CEO have the right to terminate the service contract with one month’s notice provided, however, that the contract shall remain in force at least until 1 March 2022.
The CEO’s retirement age and the basis for determining the pension are determined by law.
Remuneration of other management
The Board of Directors decides on the remuneration and incentive scheme for the company’s other management. The company’s other management includes the CFO. The CFO’s fixed remuneration consists of a monthly salary and fringe benefits.
No ordinary short-term incentive scheme based on certain profit or performance indicators has been defined for the CFO. Instead, an amount equal to a maximum of two months’ fixed salary per year may be paid to the CFO as a reward for good work.
The CFO’s long-term incentive scheme consists of share-based incentive schemes: the matching share plan and the performance-based share scheme. These are described in detail under “Share-based incentive schemes”.
Sievi Capital’s CFO is subject to a shareholding obligation under which the CFO must retain at least 50 per cent of the company’s shares received under incentive schemes until the value of the CFO’s shareholding in Sievi Capital corresponds to the amount of their fixed gross annual salary in the previous calendar year.
The mutual notice period for the CFO is six months. There is no separate severance payment in the contract.
Share-based incentive schemes
In March, Sievi Capital’s Board of Directors decided on the establishment of a matching share plan and a performance-based share scheme for the company’s key personnel and on the launching of the first plan (LTI 2020–2022) under the performance-based share scheme. These schemes replaced all of the company’s earlier long-term incentive schemes.
The purpose of the above-mentioned long-term incentive schemes is to continue to serve as incentive and enhance the commitment of the company’s key personnel and, in this manner, contribute to and harmonise the goals of the company, its key personnel and its shareholders. The incentive schemes are subject to continued employment in the company. Accordingly, if the participant’s employment or service relationship with Sievi Capital ends before the share award payment date, the participant is, as a rule, not entitled to any remuneration under the scheme.
Matching share plan
The matching share plan consists of an initial investment in the company’s shares in the share issue organised in March 2020 and the right to receive without consideration, after the waiting period ending on 31 March 2021, one (1) matching share (gross) (jointly “Matching Shares”) for each share that the plan participant subscribed in the share issue and holds at the end of the waiting period, in line with the terms and conditions of the matching share plan.
The Matching Shares will be issued to the participants on the date of their delivery in the manner decided by Sievi Capital.
Matching Shares awarded to the participants on the basis of the matching share plan are subject to a three-year transfer restriction: during this three-year period, the Matching Shares may not be sold, transferred or pledged and any rights related to them may not be otherwise transferred.
Performance-based share scheme and LTI 2020–2022
The performance-based share scheme consists of three individual plans starting annually. Each plan includes a three-year vesting period that always starts on 1 January as well as the award of shares, if any, at the end of the vesting period, provided that the award terms and conditions are fulfilled. The launching of each individual plan requires separate approval from the company’s Board of Directors.
The Board of Directors has approved the first plan (LTI 2020–2022) under the share scheme. Its vesting period started on 1 January 2020 and the award of shares, if any, will take place in spring 2023, provided that the performance targets that the Board of Directors has set for the plan are achieved. The shares awarded, if any, are Sievi Capital shares.
The performance targets applied to the first LTI 2020–2022 plan are based on Sievi Capital’s average return on equity (ROE).
The maximum annually-earned remuneration to be paid on the basis of all plans within the scope of the performance-based share scheme is limited to 50 per cent of the participant’s fixed annual salary for the CEO and other management and to 20–40 per cent the participant’s fixed annual salary for other key personnel.