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 5 May 2021, resolved that the members of the Board of Directors shall be paid the following remuneration: To the Chair of the Board of Directors EUR 4,750 per month and to each other member of the Board of Directors EUR 2,000 per month. Further, the Annual General Meeting resolved that the member of the Board of Directors elected as Chair or member of the Audit Committee or the Nomination and Remuneration Committee shall receive additional compensation of EUR 1,500 per year, and that reasonable travel expenses will be refunded in as invoiced.
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.
The Board of Directors of Kreate Group Plc has decided on June 23 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 aim of the new plans is to align the objectives of the company, shareholders, and key employees for increasing the value of the company in the long-term, to retain the key employees at the company and to offer them competitive reward plans that are based on earning and accumulating the company’s shares as well as on the share value increase.
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 number of shares 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 for 2022. Before the reward payment, the performance bonus converted into shares will be multiplied by the reward multiplier decided by the Board of Directors. Preliminary, approximately 60 key employees, including the members of the company’s Management Team belong to the target group of the Share Bonus Plan
The company publishes its Corporate Governance Statement and Remuneration Report on the company website in accordance with the Finnish Corporate Governance Code 2020.