Kreate’s Board of Directors appoints and dismisses the President and CEO. The Board of Directors also decides on the terms and conditions of the President and CEO’s employment, specified in a written service contract. In addition, the Board of Directors decides on the remuneration of the members of the Management Team.
In accordance with the Finnish Companies Act, the General Meeting determines the remuneration payable to the members of the Board of Directors, and its principles in accordance with the remuneration policy of Kreate as in force from time to time.
The Board of Directors decides on the remuneration, and its principles, of the President and CEO and the Management Team in accordance with the recommendation of the Remuneration and Nomination Committee and the remuneration policy of Kreate, as in force from time to time. In addition to the statutory pension insurance, the President and CEO and the Management Team are insured under a supplementary pension insurance plan.
The term of notice of the Management Team members’ employment contracts is three to six months. Of the members of the Management Team some are subject to certain conditions, entitled to receive a severance payment in addition to the salary for the notice period in the event that their employment contracts are terminated by Kreate.
Remuneration report of the governing bodies contains more information on the remuneration of the Board of Directors and CEO.
Remuneration policy and report
Remuneration policy sets out the key principles for the remuneration of Kreate’s governing bodies, such as members of the Board of Directors and the President and CEO. Remuneration report presents more information on the remuneration during the last financial year. More information on governance can be found from the Corporate Governance Statement 2023.Remuneration policy of the governing bodies
Kreate’s Board of Directors resolves on the incentive schemes of the President and CEO and the Management Team, such as a performance based bonus schemes and pension plans in accordance with the remuneration policy of Kreate, as in force from time to time. Kreate’s President and CEO and members of the Management Team are entitled to a yearly performance bonus of up to seven months’ salary. The performance based bonus scheme is based on the financial result and performance of Kreate and the payment of the performance based bonus is conditional upon the achievement of the key performance targets set for Kreate. The performance based bonus scheme is in place and the Board of Directors decides on the continuation of the bonus scheme separately each year.
The Board of Directors of Kreate Group Plc has decided on 2021 to launch two new long-term share-based incentive plans for the key employees of the Group and the Group’s associated company.
The Performance Share Plan 2021–2024 consists of 2 two-year performance periods, the calendar years 2021–2022 and 2023–2024. Each performance period is followed by a two-year restriction period. The company’s Board of Directors decides on the plan’s performance criteria and the targets set for each criterion at the beginning of each performance period. For the 2021–2022 performance period, the bonus was based on the Group’s cumulative operating profit (EBITA), Kreate’s total shareholder return (TSR) and the completion of the company’s strategic goals. The share bonus plan offers the key persons in the target group an opportunity to earn shares in the company by converting into shares a portion, decided by the Board of Directors, of the performance bonus earned within the performance bonus plan. A performance bonus converted into shares is multiplied by a bonus multiplier decided by the Board of Directors before the payment of the bonus.
A member of the company’s Management Team must hold at least 50 percent of the net number of shares paid based on the new plans until the member’s shareholding in the company in total corresponds to the value of their gross annual salary. This shareholding must be held as long as the membership in the Management Team continues.
The aim is to pay the rewards of the incentive plans using the treasury shares held by the company leaving the plans with no dilution effect.
The Performance Share Plan 2021–2024 consists of two two-year performance periods, calendar years 2021–2022 and 2023–2024. A performance period is followed by a two-year restriction period. The Board of Directors of the company decides on the plan’s performance criteria and targets to be set for each criterion at the beginning of a performance period. During the performance period 2021–2022, the Management Team members belong to the target group of the Performance Share Plan.
The Share Bonus Plan offers the key employees in the target group an opportunity to earn the company’s shares as a reward by converting into shares the portion decided by the Board of Directors of the performance bonus to be earned in the performance-based bonus scheme. Before the reward payment, the performance bonus converted into shares will be multiplied by the reward multiplier decided by the Board of Directors. Approximately 60 key employees, including the members of the company’s Management Team belong to the target group of the Share Bonus Plan