Other Remuneration Information:
1. Decision-making procedure of remuneration
The decision-making procedure of remuneration of Elisa Board members and CEO is described in the Elisa Remuneration Statement.
The salaries and other remuneration of the CEO and other members of the Executive Board, as well as their long-term incentive plans, are decided by the Board of Directors. The Board of Directors also decides on the short-term incentive plan for the CEO. In addition, the Board decides on the maximum limits of the short-term incentive plan for the Executive Board. The People and Compensation Committee prepares the aforementioned matters to be decided by the Board with the assistance of independent external experts as necessary. The CEO decides on the targets for the short-term incentive plan for the Executive Board.
On 5 April 2023, Elisa's General Meeting of Shareholders authorised the Board to decide on a share issue and the issue of special rights giving entitlement to shares, issues can be executed as directed. The authorisation is valid for 18 months from the date of the resolution of the General Meeting. The Board may also use them for remuneration.
2. Remuneration of the Board
The remuneration of the Board is decided annually by Elisa’s General Meeting in accordance with the company’s remuneration policy. The Annual General Meeting in 2023 decided on the following remuneration based on the proposal
of the Shareholder’s Nomination Board:
- The annual fee for the chair is EUR 140,000.
- The annual fee for the deputy chair and the chairs of the committees is EUR 86,000.
- The annual fee for a member is EUR 71,000.
- The meeting fee is EUR 800 per meeting of the Board and of a Committee. However, if a Board member is physically present at a Board or Committee meeting that is held in a country other than his/her permanent home country, then the meeting fee is EUR 1,600.
In accordance with the decision of the General Meeting, the annual fee will be paid in the form of company shares and cash in such a way that shares in the company are acquired in the name of and on behalf of Board members equivalent to 40 per cent of the amount of the fee, and the rest is paid in cash for tax withholding purposes. In addition, Board members were reimbursed for any travel and other expenses incurred due to Board work according to the actual costs.
Shares acquired as part of the annual fee do not include a fixed-term restriction on the transfer of shares, although the Shareholder’s Nomination Board does require Board members to have shareholdings in the company.
3. Remuneration of the CEO and the Executive Board
The total salary of the CEO consists of a fixed monetary salary and taxable fringe benefits. The fixed salary totals EUR 641,640 per year. In addition, holiday pay is paid. The taxable fringe benefits totalled EUR 20,077 in 2022. The total remuneration of the CEO also includes short- and long-term incentive bonuses.
Members of the Executive Board are paid a total salary that includes a fixed monetary salary and taxable fringe benefits. In addition, members of the Executive Board fall within the scope of the short- and long-term incentive plans. The fixed monetary salary of members of the Executive Board totals EUR 2,263,892 in 2022. In addition, holiday pay is paid. The taxable fringe benefits totalled EUR 54,084 (the figures do not include the CEO's salary and taxable fringe benefits).
3.1 Short- and long-term incentive plans
Short-term incentive plan
The CEO and Other members of the Elisa Executive Board are paid a performance-based bonus based on criteria defined in Remuneration Statement set by the company's Board of Directors: earnings per share, revenue development and development of customer satisfaction. The target period of this short-term incentive plan is six months, and any bonuses are paid every six months.
Long-term incentive plans
Performance-based Shares Plan 2018–2022
On 14 December 2017, the Board of Directors of Elisa Corporation approved the Performance-based Shares Plan 2018-2022 for the Group’s key employees. The aim of the plan is to align the objectives of the shareholders and the key employees in order to increase the value of the Company in the long term, to keep the key employees at the Company, and to offer them a competitive reward plan that is based on earning and accumulating the Company’s shares. The Performance Share Plan is directed to approximately 200 people, including the members of the Corporate Executive Board.
The Performance-based Share Plan includes three 3-year performance periods: the calendar years 2018–2020, 2019–2021 and 2020–2022. The Board of Directors of the company will decide on the Plan’s performance criteria and required performance levels for each criterion at the beginning of a performance period. The potential reward of the plan from each performance period will be based on the Group’s earnings per share (EPS), on new business development and on other essential business goals.
The potential rewards will be paid partly in the company’s shares and partly in cash. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the participant. As a rule, no reward will be paid if a participant’s employment or service ends before the reward payment.
The CEO of the Company and members of the Corporate Executive Board must hold a minimum of 50 per cent of the net shares given on the basis of the plan until the CEO’s total shareholding in the company corresponds to the value of his or her annual salary and the member’s total shareholding in the company corresponds to the value of half of his or her annual salary.
Performance-based Shares Plan 2021–2025
On 4 March 2021, the Board of Directors of Elisa Corporation approved a share-based incentive plan for the Group key employees. The aim of the new plan is to align the objectives of the shareholders and the key employees in order to increase the value of the Company in the long-term, to retain the key employees at the Company, and to offer them a competitive reward plan that is based on earning and accumulating the Company´s shares. The Performance Share Plan is directed to approximately 200 people, including the members of the Corporate Executive Board.
The new Performance Share Plan includes three three-year performance periods, calendar years 2021–2023, 2022–2024 and 2023–2025. The Board of Directors of the Company will resolve on the Plan’s performance criteria and required performance levels for each criterion at the beginning of a performance period. The potential reward of the Plan from the performance period 2021–2023 will be based on the Group’s Earnings per Share (EPS), on the international digital services growth, and annual progress in key business targets.
The rewards to be paid on the basis of the performance period 2021–2023 correspond to the value of a maximum total of 410.700 Elisa Corporation shares (including also the proportion to be paid in cash). The potential reward on the basis the performance period 2021–2023 will be paid partly in the Company’s shares and partly in cash in 2024.
The rewards to be paid on the basis of the performance period 2022–2024 correspond to the value of a maximum total of 360.500 Elisa Corporation shares (including also the proportion to be paid in cash). The potential reward on the basis the performance period 2022–2024 will be paid partly in the Company’s shares and partly in cash in 2025.
The rewards to be paid based on the performance period 2023–2025 correspond to the value of a maximum total of 395.800 Elisa Corporation shares (also including the proportion to be paid in cash). The potential reward on the basis the performance period 2023–2025 will be paid partly in the Company’s shares and partly in cash in 2026.
The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the participant. As a rule, no reward will be paid, if a participant’s employment or service ends before the reward payment.
The CEO of the Company and a member of the Corporate Executive Board must hold a minimum of 50 per cent of the net shares given on the basis of the plan, until the CEO’s shareholding in the Company in total corresponds to the value of his annual salary and, respectively, the member’s shareholding in the Company in total corresponds to the value of half of his or her annual salary.
Restricted Share 2019 Plan
On 30 January 2019, the Board of Directors decided on the Restricted Share 2019 Plan to align the objectives of the shareholders and the key employees in order to increase the value of the Company in the long term, to keep the key persons at the Company, and to offer them a competitive reward plan based on earning the Company’s shares.
The Restricted Share 2019 Plan is directed at selected key persons. The commitment periods are 12–36 months. Any bonus will be paid only if a key person's employment is valid when the bonus is due to be paid. The bonuses to be paid on the basis of the commitment period of 2019–2025 correspond to the value of a maximum total of 500,000 Elisa Corporation shares, including the proportion to be paid in cash.
Based on the Plan 9,152 shares were transferred to the key persons on 18 June 2021.
The CEO’s and Elisa's Executive Board's Other members' long-term incentive schemes:
| | Short‑term incentive plan | | | Long‑term incentive plans | | |
| | Performance-based bonus scheme 2023 %* | Share-based incentive plan 2018-2022, Earnings period 2019-2021
shares (max)
| Share-based incentive plan 2018-2022, Earnings period 2020-2021
shares (max) | Share‑based incentive plan 2021-2025, Earnings period 2021-2023
shares (max)
| Share‑based incentive plan 2021-2025, Earnings period 2022-2024
shares (max) | Share‑based incentive plan 2021-2025, Earnings period 2023-2025
shares (max) |
| CEO | 90% | 39,000 | 32,000 | 32,000 | 32,000
| 38,430 |
| Other members of the Executive Board | 69%** | 134,100 | 118,000 | 94,100 | 86,000 | 109,000 |
* The maximum limits are presented as percentages of the fixed earnings for the target period
**Average for the other members of the Executive Board
3.2 Supplementary pension contributions
Chief Executive Officer
The CEO’s supplementary pension coverage is based on a defined contribution scheme. The pension arrangement includes a right to a paid-up policy. In the 2020 financial year, the Board agreed with the CEO that he would continue to serve as the company’s CEO until further notice. According to the previous CEO contract, he would have retired when he turned 60. An increase in the statutory retirement age is compensated for by a decision of the Board.
Liability for the CEO’s pension was increased by a EUR 43,045 provision on the balance sheet. For the insurance based supplementary pension scheme, contribution for the CEO was EUR 174, 407. The insurance based supplementary pension scheme can be utilised earliest at the age of 62.
The period of notice applicable to the CEO’s service contract is six months for Elisa and three months for the CEO. Should the contract be terminated by Elisa, the CEO is entitled to receive severance pay equal to the total salary of 24 months, less the salary for the period of notice.
Other members of Elisa’s Executive Board
The contractual relationship between the company and each member of Elisa's Executive Board who began their role there before 2013 will terminate when the member turns 62 years of age. For the CFO, on May 2023, it was agreed that the contractual relationship will continue until further notice. These members have a defined contribution supplementary pension plan concluded with a pension insurance company, which includes a paid-up pension. The right to a pension will start when the contractual relationship with the company ends. In 2022 EUR 56,050 was paid to the supplementary pension scheme of Elisa's Executive Board members.
The period of notice for members of the Executive Board is six months from Elisa's side and three months from the member's side. Should the contract be terminated by Elisa, the member of the Executive Board entitled to receive a severance payment that equals the total salary of 15 months minus their salary for the period of notice.
All salaries and financial benefits paid to the CEO and Other members of the Executive Board during the 2022 financial year:
| | Salary in cash, EUR | Taxable fringe benefits, EUR | Performance-based bonuses, EUR | Total value of share-based incentive, EUR*
| Supplementary pension, EUR | Total,
EUR | Portion of share-based remuneration paid as shares, number of |
| CEO | 674,640 | 20,077
| 365,377
| 715,958
| 217,452
| 1,993,504
| 6,426
|
| Other members of Elisa's Executive Board | 2,263,892
| 54,084
| 914,689
| 1,966,128 | 56,050 | 5,254,843
| 15,006
|
* According to the stock exchange price of the assignment date of 2 February 2022