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President and CEO

Sponda’s President and CEO is appointed by the company’s Board of Directors. The President and CEO manages the company’s day-to-day operations in accordance with the instructions and stipulations of the Board of Directors. The President and CEO is responsible for ensuring that the company’s accounts comply with legal provisions and that the company has sufficient capital funds for its purposes. The President and CEO is assisted by the Group’s Executive Board, of which he is the chairman. Kari Inkinen (b. 1957) has served as Sponda’s President and CEO since 2005.

The President and CEO’s terms of employment are set out in a written contract of employment approved by the Board. Under the terms of the contract of employment, the term of notice of the President and CEO is six months. Should the company terminate the President and CEO’s contract of employment, he is entitled to compensation equivalent to twelve (12) months’ salary. The retirement age of the President and CEO is 63, and his pension is determined in accordance with the Finnish Employees Pension Act (TEL). The President and CEO is covered by a contribution-based group pension insurance scheme. Sponda Plc pays the annual premium under the scheme until the President and CEO reaches the age of 63. The insurance premium amounts to 7.5 per cent of the President and CEO’s fixed annual salary.

The President and CEO is paid a total salary, and in addition he participates in the company’s annual remuneration scheme. The maximum remuneration payable under the company’s annual remuneration scheme is 40 per cent of the annual salary.

The President and CEO also participates in the long-term share-based incentive scheme for the Group’s key personnel approved by the Board of Directors. The revised incentive scheme implemented in 2009 comprised two one-year vesting periods (the 2010 and 2011 calendar years) and two three-year vesting periods (2010–2012 and 2011–2013). In 2012, Sponda’s Board of Directors decided on the implementation of a new incentive scheme, which is effective from the beginning of 2012. The incentive scheme comprises three three-year vesting periods, which correspond to the calendar years 2012–2014, 2013–2015, and 2014–2016. The Board of Directors decides separately on the earning criteria and the targets to be established for each vesting period.

The earning criteria for the vesting periods that began prior to 2012 were tied to cash flow from operations per share and return on capital employed. The earning criteria for the 2012–2014 vesting period are the Group’s average Return on Capital Employed (ROCE) in the financial periods 2012–2014 and the Group’s cumulative Operational Cash Earnings Per Share (CEPS) for the financial periods 2012–2014. In addition, the Board of Directors will assess the Group’s success in relation to the prevailing market conditions. The earning criteria for the 2013–2015 vesting period are the Group’s average Return on Capital Employed (ROCE) in the financial periods 2013–2015, the Group’s cumulative Operational Cash Earnings Per Share (CEPS) for the financial periods 2013–2015, and real estate sales. In addition, the Board of Directors will assess the Group’s success in relation to the prevailing market conditions. The Board of Directors monitors the fulfilment of the targets set for the earning criteria regularly.

Any remuneration paid, less taxes, is used to purchase the company’s shares on behalf of the persons participating in the incentive scheme. The remuneration amount includes the purchased company shares as well as taxes and tax-like charges incurred from the remuneration to the persons participating in the scheme and settled by the company.

The shares may not be disposed of within a set commitment period following their receipt. The duration of this period is two years for the one-year vesting periods and three years for the three-year vesting periods. The commitment period for the 2012–2014 vesting period ends on 31 December 2017 and the commitment period for the 2013–2015 vesting period on 31 December 2018. After the commitment period ends, a member of the Group’s Executive Board must own one half of the shares paid on the basis of the scheme, until the value of the shares he or she owns equals the amount of his or her gross annual salary. This ownership obligation shall be in effect for as long as the employment contract of the member of the Executive Board continues.

In 2013, salaries paid to the President and CEO amounted to EUR 439,880.78 and other remuneration to EUR 629,539.85, in total EUR 1,069,420.63. Remunerations paid to the President and CEO in 2013 consist of the annual remuneration and the remuneration based on the long-term share-based incentive scheme in effect in 2013, based on which 64,678 Sponda Plc shares were purchased for the President and CEO.

Salaries and remuneration paid to President and CEO

 

Annual salary, € **)

Fringe benefits, €***)

Annual salary

and fringe benefits, total, €

 

Annual 
remuneration €

 

Incentive
remuneration, €

Remunerations in total, €

All in total, €

2013 *)

427,290.78

12,590.00

439,880.78

 

129,892.30

 

499,647.55

629,539.85

1,069,420.63

2012

416,607.06

13,500.00

430,107.06

 

107,626.30

 

172,560.68

280,186.98

710,294.04

2011

418,900.18

13,320.00

432,220.18

 

115,592.00

 

383,151.98

498,743.98

930,964.16

*) Amounts in this table are those actually paid in 2013. The variable remunerations (annual remuneration and incentive remuneration) are based on the 2012 results.

**) annual salary excl. fringe benefits

***) car and phone benefit