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. Kreate’s Annual General Meeting held on 12 May 2020, resolved that for 2020 the members of the Board of Directors shall be paid the following remuneration: EUR 13,500 to the Chairman of the Board of Directors and EUR 9,000 to the members of the Board of Directors. However, of the members of the Board of Directors, no remuneration shall be paid to Janne Näränen for his work on the Board. On 16 December 2020 the shareholders of Kreate resolved through an unanimous resolution to amend the remuneration of the Chairman of the Board of Directors so that the Chairman of the Board of Directors is paid a monthly fee of EUR 4,725 from 1 December 2020. Further, on 16 December 2020 through an unanimous resolution, the shareholders of Kreate resolved that Elina Pienimäki is paid as remuneration EUR 750 for December 2020. In addition, on 25 January 2021 through an unanimous resolution, the shareholders of Kreate resolved that the members of the Board of Directors shall be paid the following remuneration: the Chairman of the Board of Directors is paid EUR 4,750 per month and the members of the Board of Directors are paid EUR 2,000 per month in 2021. In addition, it was resolved that an additional annual remuneration of EUR 1,500 is paid to each member of the Board of Directors elected as the chair or member of the Audit Committee and as chair or member of the Remuneration and Nomination Committee.
Remuneration of the CEO and Management Team
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 pension expenses of the supplementary pension plan amounted to EUR 33,6 thousand, with respect to the CEO, and EUR 63,3 thousand, with respect to members of the Management Team during the financial year ended 31 December 2019.
The term of notice of the Management Team members’ employment contracts is three to six months. Of the members of the Management Team, Timo Vikström, Antti Heinola, Sami Rantala, Jaakko Kivi, Tommi Lehtola, Ville Niutanen and Juha Salminen are, subject to certain conditions, entitled to receive a severance payment equivalent to a three to eight months’ salary in addition to the salary for the notice period in the event that their employment contracts are terminated by Kreate.
Kreate’s CEO has been paid a fee of EUR 200,000 in January 2021, consisting mainly of a performance bonus for the financial year of 2020. Other than the abovementioned, there have not been any significant changes between 31 December 2020 and the date of the Offering Circular to the remuneration of Kreate’s President and CEO and the Management Team.
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.
Kreate’s Board of Directors is investigating the establishment of a share based incentive scheme for Kreate’s key personnel with the goals of committing the participants to Kreate and the long-term continuation of their shareholdings in Kreate. The incentive scheme would be a share savings plan, where key personnel would be given the option of receiving their personal performance bonuses as shares instead of cash. For the key personnel participating in the incentive scheme, the performance bonus would be paid in shares after a waiting period and partly in cash to cover taxes. In connection with the payment of the performance bonus shares, participants in the incentive scheme would be entitled to receive additional shares from Kreate, the amount of which would be based on the amount of performance bonus paid in shares. The establishment of a possible incentive scheme and its terms and content will be decided after the listing.
The company publishes its Corporate Governance Statement and Remuneration Report on the company website in accordance with the Finnish Corporate Governance Code 2020.