Other Remuneration Information
1. Decision-making procedure of remuneration
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 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.
3. Remuneration of the CEO and the Executive Board
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 2,242,040 in 2023. In addition, holiday pay is paid. The taxable fringe benefits totalled EUR 46,065 (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
Long-term incentive plans
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 2024–2028
On 31 January 2024, the Board of Directors of Elisa Corporation deciden on the Performance-based Shares Plan. The purpose of the plan is to align the interests of the company’s shareholders and key employees to increase the company’s value in the long-term, to commit key employees to implement the company's strategy, objectives and long-term interest and to offer them a competitive incentive plan based on earning and accumulating the company´s shares. The target group in the performance period 2024–2026 consists of approximately 220 key employees, including the members of the Executive Board and the CEO.
The Performance-based Share Plan 2024–2028 consists of three performance periods, covering the financial years 2024–2026, 2025–2027 and 2026–2028 respectively. The Board of Directors will resolve annually on the commencement and details of a performance period. The potential reward of the Plan from the performance period 2024–2026 will be based on the Group’s Earnings per Share (EPS, weight 60%), on the International Digital services growth (weight 20%), on Employee Engagement (weight 10%) and annual progress in specific key business growth and ESG (climate) targets (weight 10%).
The value of the rewards to be paid on the basis of the plan in the performance period 2024–2026 corresponds to a maximum total of 460.000 shares of Elisa, including also the proportion to be paid in cash. The potential reward will be paid in 2027 partly in Elisa shares and partly in cash
The cash proportion of the reward is intended to cover taxes and statutory social security contributions arising from the reward to the key employee. As a rule, no reward will be paid if the key employee’s employment or director contract terminates before the reward payment.
The Executive Board member must hold 50 per cent of the received shares, until the value of the Executive Board member’s total shareholding in Elisa equals to 50 per cent of their annual base salary for the calendar year preceding the payment of the reward. Respectively, the CEO must hold 50 per cent of the net reward shares received from the plan, until the CEO´s shareholding in Elisa equals to 100 per cent of the CEO’s annual base salary of the preceding year. Such number of Elisa shares must be held as long as the membership in the Executive Board or the position as the CEO continues.
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 2021-2025, Earnings period 2021-2023
| Share‑based incentive plan 2021-2025, Earnings period 2022-2024
| Share‑based incentive plan 2021-2025, Earnings period 2023-2025
|Share‑based incentive plan 2024-2028, Earnings period 2024-2026
|Other members of the Executive Board
* 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 42,865 provision on the balance sheet (43,045 in 2022). For the insurance based supplementary pension scheme, contribution for the CEO was EUR 176,207 (174,407 in 2022). 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 2023 EUR 60,720 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 2023 financial year:
|Salary in cash, EUR
|Taxable fringe benefits, EUR
|Performance-based bonuses, EUR
|Total value of share-based incentive, EUR*
|Supplementary pension, EUR
|Portion of share-based remuneration paid as shares, number of
|Other members of Elisa's Executive Board
* According to the stock exchange price of the assignment date of 1 February 2023.