The President and CEO

Sponda’s President and CEO is appointed by the company’s Board of Directors. The President and CEO manages the company’s day-to-day operations in accordance with the instructions and stipulations of the Board of Directors. The President and CEO is responsible for ensuring that the company’s accounting complies with legal provisions and that the company has sufficient capital funds for its purposes. The President and CEO is assisted by the Group’s Executive Board, of which he is the chairman. Kari Inkinen (b. 1957) has served as Sponda’s President and CEO since 2005.

The President and CEO’s terms of employment are set out in a written contract approved by the Board. Under the terms of the service contract, the President and CEO’s term of notice is six months. Should the company terminate the President and CEO’s service contract, he is entitled to compensation equivalent to twelve (12) months’ salary. The retirement age of the President and CEO is 63, and his pension is determined in accordance with the Finnish Employees Pension Act (TEL).  The President and CEO is covered by a contribution-based group pension insurance scheme. Sponda Plc pays the annual premium under the scheme until the President and CEO reaches the age of 63. The insurance premium amounts to 7.5 per cent of the President and CEO’s fixed annual salary.

The President and CEO is paid a total salary, and in addition he participates in the company’s annual remuneration scheme. The maximum remuneration payable under the company’s annual remuneration scheme is 40 per cent of the President and CEO´s annual salary.

The President and CEO also participates in the long-term share-based incentive scheme for the Group’s key personnel approved by the Board of Directors. The incentive scheme has been in effect in its current form since the beginning of 2012. The three three-year vesting periods of the incentive scheme that came into effect in 2012 correspond to the calendar years 2012–2014, 2013–2015, and 2014–2016. Remuneration was paid in spring 2015 based on the vesting period 2012–2014 and the commitment period for that vesting period is still in effect. Sponda’s Board of Directors decided on a new incentive scheme in 2015. The incentive scheme comprises three three-year vesting periods, corresponding to the calendar years 2015–2017, 2016–2018, and 2017–2019. The terms and conditions of the scheme are the same as those of the previous incentive schemes. The Board of Directors decides separately on the earning criteria applicable to each vesting period and the targets to be established for them.

The earning criteria for the 2013–2015 vesting period are the Group’s average Return on Capital Employed (ROCE) in the financial periods 2013–2015, the Group’s cumulative Operational Cash Earnings Per Share (CEPS) for the financial periods 2013–2015, and real estate sales. In addition, the Board of Directors will assess the Group’s success in relation to the prevailing market conditions.The earning criteria for the 2014–2016 vesting period are the Group’s average Return on Capital Employed (ROCE) in the financial periods 2014–2016, the Group’s cumulative Operational Cash Earnings Per Share (CEPS) for the financial periods 2014–2016, and real estate sales. In addition, the Board of Directors will assess the Group’s success in relation to the prevailing market conditions. The earning criteria for the 2015–2017 vesting period are the Group’s average Return on Capital Employed (ROCE) in the financial periods 2015–2017, the Group’s cumulative Operational Cash Earnings Per Share (CEPS) for the financial periods 2015–2017, and real estate sales. In addition, the Board of Directors will assess the Group’s success in relation to the prevailing market conditions. The Board of Directors monitors the fulfilment of the targets set for the earning criteria regularly.

Any remuneration paid, less taxes, is used to purchase the company’s shares on behalf of the persons participating in the incentive scheme. The remuneration amount includes the purchased company shares as well as taxes and tax-like charges incurred from the remuneration to the persons participating in the scheme and settled by the company.  

Shares received on the basis of the share-based incentive scheme may not be disposed of within a set commitment period following their receipt. The commitment period for the 2012–2014 vesting period ends on 31 December 2017, the commitment period for the 2013–2015 vesting period on 31 December 2018, the commitment period for the 2014–2016 vesting period on 31 December 2019, and the commitment period for the 2015–2017 on 31 December 2020. Following the end of the commitment period, a key person must own one half of the shares paid on the basis of the scheme, until the value of the shares he or she owns equals the amount of his or her gross annual salary. This ownership obligation shall be in effect for as long as the employment contract of the key person continues.

The value of the remuneration to be paid for each vesting period shall be no more than the gross annual salary of the key person participating in the scheme. The gross annual salary refers to the person’s total annual salary at the start of the three-year vesting period in question, including fringe benefits and excluding remunerations paid on the basis of the annual remuneration system and the long-term share-based incentive scheme.

In 2015, salaries paid to the President and CEO amounted to EUR 464,855.54 and other remuneration to EUR 523,964.43, in total EUR 988,819.97. Remunerations paid to the President and CEO in 2015 consist of the annual remuneration and the remuneration based on the long-term share-based incentive scheme in effect in 2015, based on which 50,682 Sponda Plc shares were purchased for the President and CEO.

Salaries and remuneration paid to the President and CEO

 

Annual salary, € **)

Fringe benefits, € ***)

Annual salary and fringe benefits, total, €

Annual remuneration, 

Incentive remuneration, €

Total remunerations,

All in total, 

2015 *)

450,353.04

14,502.50

464,855.54

84,085.00

439,879.43

523,964.43

988,819.97

2014

430,322.00

14,340.00

444,662.00

64,398.55

270,415.59

334,814.14

779,476.14

2013

427,290.78

12,590.00

439,880.78

129,892.30

499,647.55

629,539.85

1,069,420.63

*) The amounts in this table are those actually paid in 2015. The variable remunerations (annual remuneration and incentive remuneration) are based on the 2014 results. (The amounts for the comparison years 2014 and 2013 are also based on actual amounts paid, which means that the variable remunerations for these years are based on the 2013 and 2012 results respectively).
**) Annual salary excluding fringe benefits
***) company car and phone benefit