Remuneration

Remuneration

Remuneration of the Board

The Annual General Meeting decides on the remuneration of the Board members based on the recommendation of the Shareholders’ Nomination Board. 

The remuneration of the Chairman, as decided by the 2015 Annual General Meeting, is EUR 84,000 per year, EUR 63,000 per year for the Vice Chairman as well as for the Chairman of the Audit Committee and EUR 42,000 per year for the other members of the Board. In addition, the remuneration for attendance at Board meetings is EUR 1,500 per meeting for Board members residing outside Finland. As regards the permanent Board committees and the Nomination Board, the remuneration for attendance at committee and the Nomination Board meetings is EUR 1,500 per meeting.

For 2015, the total remuneration of the members of the Board and its committees amounted to EUR 502,250. The total remuneration of each member is set forth in the table below.

Members of the Board and/or its committees and the Shareholders’ Nomination Board at December 31, 2015

Remuneration in 2015 (EUR)

Remuneration in 2014 (EUR)

Robin Ahlström (January 2015)

7,000

76,500

Lori J. Cross

66,000

67,500

Alexander Ehrnrooth (as of April 2015)

45,000

 

Johannes Gullichsen (as of April 2015)

37,500

 

Jan Inborr (as of April 2015)

57,750

 

Esa Ikäheimonen (until March 2015)

23,250

81,750

Daniel Meyer (until March 2015)

15,000

57,000

Anders Moberg

70,500

76,500

Markus Rauramo

68,250

43,500

Panu Routila

97,000

39,000

Thomas Ahlström

7,500

7,500

Risto Murto

7,500

7,500

 

The Board members do not receive shares or share-related rights as remuneration for their membership and they do not participate in the Company’s incentive or pension plans. 

Travel expenses are reimbursed in accordance with Ahlstrom’s travel policy.

Remuneration of the President & CEO and the other members of the Executive Management Team

The remuneration of the President & CEO (“CEO”) and the other members of the Executive Management Team (“EMT”) consists of base salary, customary fringe benefits (such as car, phone and, with regard to some members of the EMT, housing and/or healthcare benefits), bonuses and long term incentives as well as voluntary pension insurances as described in more detail below.

Decision-making procedures

Based on the recommendations of the Human Resources Committee, the Board decides on

  • the compensation and benefits of the CEO including his individual performance target setting, and
  • the Group Long Term Incentive Plans for the EMT and other management and key employees as well as the financial performance objectives and the payout under such plans.
  • the compensation and benefits of the members of the EMT
  • the Group Bonus Plan for the EMT and other management and key employees as well as the financial performance objectives and the payout under such plans.

Incentive Plans

Both the Group Bonus Plan and Long Term Incentive Plans have been documented in writing. The target setting under the plans shall be made so that the achievement of such targets will strengthen the competitiveness of the Company, contribute to its long-term success and increase shareholder value. The maximum payouts are defined in each plan.  

Bonus Plan

Annual bonuses are payable based on the attainment of key performance targets of the Group, business area or unit as well as individual/team performance targets. For 2015, the key performance targets of the CEO and other members of the EMT were based on the Group’s operating profit, operating working capital, commercial excellence project and company’s engagement index and accident frequency rate.

Individual/team performance targets are mutually agreed upon between the participant and his/her manager in the annual Goal and Development Plan. Individual/team targets must be defined precisely to measure the value-added outputs of the job(s). The bonus payout shall be approved by applying the so called one above principle, i.e. shall be approved by at least one organizational level above the respective participant’s manager. The progress in the achievement of the performance targets is evaluated in bi-annual reviews between each participant and his/her manager.

The annual bonus payable to the CEO for achieving his targets could as a maximum amount to the equivalent of 100% of his annual salary and for each other member of the EMT, 50% of his/her annual salary. 

Long Term Incentive Plan 2011 – 2015

A share-based Long Term Incentive Plan 2011 – 2015, which consists of three earning periods, offers for the EMT and other key personnel (maximum 50 persons in total per earning period) a possibility to receive Ahlstrom shares and cash (equalling the amount of taxes of the total reward) as a reward, if ROCE and EPS targets set by the Board for each earning period are achieved. If the targets of the plan are attained in full for all three earning periods, the reward to be paid on the basis of the plan will in its entirety correspond to a gross value of approximately 1,000,000 shares.

The restriction period for each earning period is one year after the earning period in question. The Board recommends that the CEO holds shares in the Company corresponding in value to his annual net salary and that the other EMT members hold shares in the Company corresponding in value to half of their annual net salary.

Neither the CEO, nor other member of the EMT nor any other key personnel earned any shares or money from the earning period 2011-2012 as the set ROCE or EBIT targets were not achieved.

The reward for the earning period of 2012 – 2014 amounted to approximately 16% of the maximum reward and was paid in cash to all 24 plan participants in March 2015.

The reward for the earning period of 2013-2015 amounted to approximately 67% of the maximum reward. Ahlstrom's Board of Directors has decided to transfer without consideration a maximum of 110,000 of the company's own shares to a maximum of 27 recipients of the payout. In addition, the company will pay a cash portion to the recipients equalling the total amount of taxes payable for the total award. The handover date of the shares is April 30, 2016, at the latest.  

Long Term Incentive Plan 2014 – 2018 

The plan consists of approximately 50 persons and 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.

The plan consists of earning periods beginning on January 1, 2014; on January 1, 2015 and on January 1, 2016, and potential rewards will be paid after the end of each earning period. The shares received as reward may not be transferred during a restriction period that ends three years after the beginning of the earning period.

If the targets set by the Board of Directors for the earning periods are achieved, the plan offers an opportunity to receive Ahlstrom shares and a cash proportion which the company uses for taxes and tax-related costs arising from the reward to be paid. The reward from the first earning period was based on the Ahlstrom Group's net sales, earnings per share and percentage of sales from new products. As a rule, no reward will be paid if a key employee's employment or service ends before reward payment.

The President & CEO must hold 40% of the shares received on the basis of the plan as long as his service as the President and CEO continues, and the other members of the Executive Management Team must hold 40% of the shares received on the basis of the plan for two years after the end of a three-year earning period or after the end of the restriction period.

The reward for the earning period of 2014 amounted to approximately 10% of the maximum reward and was paid in cash in March 2015.

The reward for the earning period of 2015 was based on the Ahlstrom Group’s EPS and ROCE targets and it amounted to approximately 65% of the maximum reward. The payout will take place latest in November, 2016.

The third and last earning period of year 2016 will be launched during the first half of 2016.

Pension Plans

The CEO and the other members of the EMT may participate in voluntary pension insurances. All such pension insurances are country-specific defined contribution plans. The annual contribution of the Company to the CEO’s pension plan equals approximately to his three month’s salary (not including bonuses) and to the other EMT members’ respective plans in maximum his/her two month’s salary (including fringe benefits without bonuses).

The participants’ pensions will be determined based on the applicable local pension rules and the amount of their savings in the aforesaid defined contribution plans.

The CEO’s retirement age is 63 (August 2022). 

Share ownership plan

The share ownership plan for previous management has been dissolved and the holding company Ahlcorp Oy has been liquidated in 2015.

Other terms relating to the remuneration of the CEO and the other members of the EMT

The CEO’s contract may be terminated by either the CEO or the Company with six months’ notice. In the event the Company terminates the contract without cause, the Company shall, in addition to his salary during the notice period, pay to the CEO a severance payment corresponding to his 12 months’ salary.

According to the CEO’s contract, the Company maintains an insurance for him to cover permanent disability.

Five per cent of the annual base salary paid to the CEO is paid for membership on governing bodies of group legal units or associated companies.

The Company has not given any guarantees or other securities on behalf of the members of the EMT or the Board.

The total remuneration of the CEO and the other members of the EMT, including fringe benefits and bonuses, are set forth at the table below.

Remuneration of the CEO and the other members of the EMT in 2015 and 2014

 

2015

Salaries and fees with fringe benefits

(EUR)

Bonus pay

(EUR)

Long term plan based payments (EUR)

Total

(EUR)

Marco Levi, President & CEO

701,890.14

243,750.00

81,149.98

1,026,790.12

Other EMT members

1,622,675.37

315,740.62

140,832.37

2,079,248.36

            

 

2014

Salaries and fees with fringe benefits

(EUR)

Bonus pay

(EUR)

Long term plan based payments (EUR)

 

Total

(EUR)

Jan Lång, President & CEO

Until June 15, 2014

302,038.00

87,487.00

-

389,525.00

Marco Levi, President & CEO

As from June 16, 2014

544,214.80 *

-

932,400.00**

1,476,614.80

Other EMT members

2,495,045.36

241,603.78

-

2,736,649.14

* Including a one-time payment of EUR 216,000.00 (sign-in bonus)

** Value of shares at grant

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