Board of Directors’ Fees
According to the Finnish Companies Act, the Annual General Meeting of Shareholders decides on the fees payable to the members of the Company’s Board of Directors.
On 1 March 2021, the shareholders of the Company resolved unanimously as a part of the matters resolved in the Annual General Meeting that, subject to the completion of the Listing, the remuneration of the Chairman of the Board is EUR 4,750 per month and the remuneration of other members of the Board is EUR 2,250 per month. In addition, it was unanimously decided that an attendance allowance of EUR 1,000 will be paid for each meeting to the Chairman of the Board and the Chairmen of the Audit and Personnel Committees, and that an attendance allowance of EUR 400 will be paid for each meeting to the other members of the Board. The Chairman and members of the Nomination Committee will each be paid an attendance allowance of EUR 1,000 in total. The remuneration will be paid as of April, if the Listing is completed by the end of March.
Remuneration of the CEO and Members of Management Team
The Board of Directors decides on the remuneration and its terms of the CEO and the members of the management team. The remuneration of the management team and the CEO consists of a monthly salary, customary fringe benefits and incentives as in force from time to time.
The pension benefits of the Company’s CEO and the other members of the management team are determined in accordance with law and customary practice. The Company has not taken out additional pension insurance policies for the CEO or management team. The retirement age of the CEO of the parent company is 64 years and six months.
The period of notice of the CEO is six (6) months for both parties. Besides salary for the period of notice, the CEO is not entitled to a separate severance payment upon resigning. If the Company terminates the CEO’s employment due to a reason other than the CEO’s severe misconduct, crime or similar reason, the CEO is, in addition to salary for the sixmonth period of notice, entitled to compensation amounting to a maximum of six (6) months’ salary, provided that the CEO has not entered into an employment or service relationship with a third party during the said period.
Shortterm Incentive Plan
Sitowise has a short-term incentive program in place, the purpose of which is to incentivize the employees in contributing towards achieving the strategic goals of Sitowise, reward the employees for reaching the targets and to increase the commitment of the employees. The short-term incentive program is divided in two parts: (i) performance bonus system and (ii) one-off rewards. All employees in Finland are part of the short-term incentive program.
The shortterm incentive of the CEO and members of the management team is decided on by the Company’s Board of Directors. The shortterm incentive is comprised of an annual performance bonus. The Board of Directors annually confirms the conditions and reward criteria based on which performance bonuses are paid to the management team. Any performance bonus is based on reaching the set financial objectives, such as EBITDA or other objectives, at the level of the Group and/or the business unit concerned. In addition to these, members of the management team may have personal or teamspecific objectives.
Long-term Incentive Plan
In March 2021, the Board of Directors of the Company decided on the establishment of a new long-term incentive scheme which is conditional upon the execution of the Listing. The target group of the option program includes the CEO and the members of Sitowise’s management team and about 300 other Sitowise’s key employees that are specifically invited to participate in the scheme. The goal of the scheme is to encourage Sitowise’s key employees towards long-term shareholding in the Company by requiring an investment in the Shares in order to receive options. In addition, the options are used to encourage the key employees in the target group towards long-term efforts in order to increase shareholder value and to retain the key employees.
Under the option program, a maximum of 1,463,400 options will be issued, each of which will give the right to subscribe for one new or treasury Share. The options will be issued under the authorization granted to the Board of Directors by the unanimous resolution of the shareholders on 3 March 2021.
The option program includes 636,750 class A options and 826,650 class B options. Class A options have a three-year vesting period, and class B options have a four-year vesting period. The subscription of shares with class A options takes place between 1 April 2024 and 31 March 2025, and with class B options between 1 April 2024 and 31 March 2026, if the pre-defined threshold yield for the Share set for the commencement of the subscription period is met. The subscription price with the options equals to the subscription price of the Share in the Offering less annually paid dividends and capital repayments.
The class A and B options may be divided into matching and performance options. In order to receive matching options, the recipient of the options must hold or subscribe for in the Personnel Offering as many Shares as they have been allocated matching options. The Shares must be held until the subscription period for the shares to be subscribed with the options begins. As at the date of this Offering Circular, the number of allocated matching options is 923,400 in total. The performance options have a higher threshold yield for the Share regarding the commencement of the subscription period of the share than matching options.
In addition, members of the management team in the option program must acquire shares with 50 percent of their net profit from the options, until the total value of their shareholding in the Company corresponds to the value of their annual salary. This number of shares must be held as long as the membership of the management team continues.
The options will be forfeited and transferred back to the Company for no consideration if the option holder resigns or the employment relationship or service contract is terminated before the commencement of the subscription period of the Shares to be subscribed with the options. Under certain conditions, the Board of Directors may decide that the option holder may, however, keep a part of their options.