Remuneration Statement

A. Decision-making procedure

Elisa's General Meeting of Shareholders annually decides on the remuneration of Board members on the basis of the proposal prepared by the shareholders' nomination board. 

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 12 April 2018, 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 and on 3 April 2019 to decide on the acquisition of the company's own shares. The share issue authorisation is valid until 30 June 2020 and share acquisition authorisation until 30 June 2020. The Board may also use them for remuneration.

B. Main principles of remuneration 

Remuneration of Board members

Board members are paid an annual remuneration fee and meeting remuneration fees for attending Board and committee meetings. After the publication of the first-quarter results, 40 per cent of the annual remuneration fees are used to purchase Elisa shares in the name of the members of the Board, and Elisa covers possible costs relating to these transactions. At the Annual General Meeting of 2018, it was decided to pay the following remuneration fees to Board members:

  • - annual remuneration fee for the Chair of EUR 120,000
  • - annual remuneration fee for the Deputy Chair and the Committee Chairs of EUR 80,000
  • - annual remuneration fee for the members of EUR 65,000
  • - meeting remuneration fee of EUR 700 per meeting for each participant

Elisa's shareholders' nomination board requires that members of the Board have shareholdings in the company.

The Chair of the Board of Directors is not paid any remuneration fees for attending the meetings of Elisa's shareholders' nomination board.  

Remuneration of the CEO and the Executive Board
 
Chief Executive Officer

Annual salary

The total salary of the CEO consists of a fixed monetary salary and taxable fringe benefits. The fixed salary totals EUR 637,291 per year. In addition, holiday pay is paid. The taxable fringe benefits total EUR 22,709 per year. The total remuneration of the CEO also includes short- and long-term incentive bonuses.

Short- and long-term incentive plans

The CEO is paid a performance-based bonus based on financial and operational targets set by the company's Board of Directors. The target period of this short-term incentive plan is six months, and any bonuses are paid every six months.

The long-term incentive plan of the CEO consists of share-based incentive plans. The key targets of the currently valid share-based incentive plan are described in the section 'Share-based incentive plans for key personnel'. The maximum bonus limits are described in Table 1.  

Pensions and terms and conditions related to contract termination

According to the CEO's contract, the contractual relationship with the CEO ends when he turns 60 years of age. The supplementary pension is based on a defined contribution plan. Elisa's CEO is entitled to a vested pension right. The increase in the statutory retirement age is compensated based on a decision of the Board of Directors.

The period of notice for the CEO is six months from Elisa's side and three months from the CEO's side. Should the contract be terminated by Elisa, the CEO is entitled to receive a severance payment that equals the total salary of 24 months minus his salary for the period of notice.

Other members of Elisa’s Executive Board

Annual salary

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 2,023,524 per year. In addition, holiday pay is paid. The taxable fringe benefits total EUR 54,527 per year (the figures do not include the CEO's salary and taxable fringe benefits).

Short- and long-term incentive plans

As a short-term incentive for Elisa's Executive Board, Elisa pays a performance-based bonus, which is based on achieving the financial and operational targets in the scorecards of Elisa and its units. The target period is six months, and any performance-based bonus is paid every six months. 

Elisa's Executive Board also falls within the scope of the company's long-term incentive plan, i.e. the share-based incentive plan (see 'Share-based incentive plans for key personnel'). The maximum limits for bonuses are stated in Table 1.  

Pensions and terms and conditions related to contract termination

The contractual relationship with the company of members who started on Elisa’s Executive Board before 2013 will terminate when the member turns 62 years of age, except the deputy CEO, whose contractual relationship will terminate when he turns 63 years and 9 months of age. 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.

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.

Table 1. Maximum limits for the bonuses under the short- and long-term incentive plans.

  Short-term incentive plan

Long-term incentive plans

     
 

Performance-based bonus scheme 2019 %*

Share-based incentive plan 2014,
shares (max)
Earnings period 2017-2019

Share-based incentive plan 2018-2022,
shares (max)
Earnings period 2018-2020

Share-based incentive plan 2018-2022,
shares (max)
Earnings period 2019-2021

Share-based incentive plan 2018–2022,
shares (max)
Earnings period 2020–2022
CEO 90% 45,000 39,650 39,000 32,000
Other members of the Executive Board 66%** 148,350 140,250 134,100 114,000

* The maximum limits are presented as percentages of the fixed earnings for the target period
**Average for the other members of the Executive Board

Share-based incentive plans for key personnel

Share-based incentive commitment plan 2019–2025

On 30 January 2019, the Board of Directors decided on a share-based incentive commitment 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 Performance Share 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. A total of 22,500 shares have been allocated from the plan and the commitment period ends in June 2021. The target group of the commitment plan covers less than ten key persons.

Share-based incentive plan 2018–2022

On 14 December 2017, the Board of Directors of Elisa Corporation approved a share-based incentive plan 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 at approximately 200 people, including the members of the Corporate Executive Board.

The Performance 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 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.

The potential reward of the plan from the performance period 2018–2020 will be based on the Group’s earnings per share (EPS), on new business development and on other essential business goals. The rewards to be paid on the basis of the performance period correspond to the value of a maximum total of 550,000 Elisa Corporation shares (including the proportion to be paid in cash). The potential rewards will be paid in 2021.

The potential reward of the plan from the performance period 2019–2021 will be based on the Group’s earnings per share (EPS), on new business development and on other essential business goals. The rewards to be paid on the basis of the performance period correspond to the value of a maximum total of 536,000 Elisa Corporation shares (including the proportion to be paid in cash). The potential rewards will be paid in 2022.

The potential reward of the plan from the performance period 2020–2022 will be based on the Group’s earnings per share (EPS), on new business development and on other essential business goals. The rewards to be paid on the basis of the performance period correspond to the value of a maximum total of 407,600 Elisa Corporation shares (including the proportion to be paid in cash). The potential rewards will be paid in 2023.

Share-based incentive plan 2014

On 11 December 2014, Elisa’s Board of Directors decided to implement two share-based incentive plans for key personnel in the Elisa Group. The plans are designed to align the goals of shareholders and key personnel in increasing the value of the company, to secure the commitment of key employees to the company, and to offer them a competitive compensation plan that is based on holding shares in the company. The target group of the incentive plan covers no more than 200 employees.

There are three 3-year earnings periods in the share-based incentive plan, the calendar years of 2015–2017, 2016–2018 and 2017–2019. Elisa's Board of Directors will decide on the plan's performance criteria and their targets at the beginning of each earnings period. Rewards from the plan from the earnings period 2015–2017 and from the earnings period 2016–2018, and potential rewards from the earnings period 2017–2019 will be based on EPS, the revenues of new business operations and on other essential goals.

The rewards paid through the incentive plan for the earnings period 2015–2017 equalled the value of 481,229 shares in Elisa (including the portion payable in cash). The rewards for the 2015–2017 earnings period were paid in 2018, partly in company shares and partly in cash.

The bonuses to be paid through the share-based incentive plan for the earnings period 2016–2018 equalled the value of 367,588 shares in Elisa (including the portion payable in cash). Rewards for the 2016–2018 earnings period were be paid in 2019, partly in company shares and partly in cash.

The bonuses to be paid through the share-based incentive plan for the earnings period 2017–2019 corresponded to the value of an total of 392,176 Elisa shares (including the proportion to be paid in cash). The potential reward on the basis the performance period 2017–2019 was paid partly in shares and partly in cash in 2020.

The cash payments are intended to cover any taxes and tax-like costs arising from the reward for the participant. As a rule, no bonus is paid if a key person's employment ends before the reward payment.

C. REMUNERATION REPORT 2018

(Published 29 January 2020)

Board of Directors

The table below present the fixed annual remuneration fees decided by the Annual General Meeting on 3 April 2019, meeting remuneration fees from 2019, Elisa’s shares acquired with fixed remuneration fees, and share-holdings of the Board on 31 December 2019.

Table 2. Remuneration fees of Board members in 2019

  Position on the Board Fixed remuneration fees, EUR* Meeting remuneration fees, EUR*** Committee meeting remuneration fees, EUR*** Total remuneration fees, EUR

Elisa's shares acquired with fixed remuneration fees, number of shares*

Share-holings of the Board on 31 Dec 2019, number of shares**
Anssi Vanjoki Chair 120 000 9 100 700 129 800 1 275 2 600
Clarisse Berggårdh Member 65 000 9 100 3 500 77 600 696 2 778
Kim Ignatius Member from 3.4.2019 65 000 7 000 2 800 74 800 691 691
Petteri Koponen Deputy Chair 80 000 8 400 2 800

91 200

857 4 762
Raimo Lind Chair until 3.4.2019  - 2 100 700 2 800 - ****
Leena Niemistö Member 65 000 9 100 3 500 77 600 696 10 440
Seija Turunen Chair of the Audit Committee
 
80 000 9 100 3 500 92 600 857 3 329
Antti Vasara Member 65 000 9 100 3 500 77 600 696 2 045

Total

 

540 000

63 400

23 300

623 300

5 750

26 605

* For the Board members appointed by the Annual General Meeting on 3 April 2019, Elisa shares have been purchased on 24 April 2019 based on the decision of the Annual General Meeting on 3 April 2019.

** Based on the number of meetings. Reward for the meetings was EUR 700 per meeting.

*** Shareholdings on 31 December 2019 (including legal entities controlled). Up-to-date information on changes in the shareholdings is available on Elisa's website, on Elisa's Management Transactions releases and table on the Corporate Governance Statement.

**** Not published. Raimo Lind was not a member of the Board of Directors on 31 December 2019.

CEO and the Executive Board

Table 3. Salaries and financial benefits paid to the CEO and the company's other Executive Board members in 2019

  Monetary salaries, EUR Taxable fringe benefits, EUR Performance-based bonuses, EUR Total value of the share-based bonus, EUR Total,
EUR
Part of the share-based bonus paid in shares, number of shares
CEO 632 418 12 281 264 431 760 224* 1 708 354    18 175
Other members of Elisa's Executive Board 2 023 524 54 527 696 975 4 747 885** 7 522 911 58 113
Total 2 655 942 72 808 961 406     5 508 109 9 231 265 76 288

* According to the stock exchange price of the assignment date of 5 February 2019

The CEO's accrued supplementary pension for his 60th and 61st years of age was covered by a provision of EUR 157,723 on the balance sheet, and for the 62nd year of age with an insurance premium that equalled EUR 159,698. With regard to the Executive Board, the annual supplementary pension insurance premiums totalled EUR 145,698.