Remuneration

The Annual General Meeting decides on the remuneration of the Chairman, Vice Chairman, and Board members as well as on the remuneration of the auditor.

The objective of remuneration is to encourage employees as individuals and as team members to achieve the financial and
operational targets set. In determining the remuneration, Vaisala takes into account its financial performance, job grade classification commonly used by peer companies, and external remuneration references. All employees are included in an incentive (STI) plan that promotes the development of net sales and operating result.

Compensation of key executives includes a competitive salary and employee benefits according to local market practices as well as short-term incentive plans (STI) based on predefined annual performance indicators. Incentive plans promote development of net sales and operating result. The key executives also participate in long-term sharebased incentive plans (LTI), which are based on the development of the company’s profitability and total shareholder return (TSR).

The Board of Directors approves the company’s incentive plans and their target groups annually. The Board of Directors also decides on the compensation of the President and CEO and approves the compensation of the direct reports of the President and CEO.

Remuneration of the Board of Directors

The Annual General Meeting held on March 26, 2019 decided that the annual fee payable to the Board members for the term until the close of the Annual General Meeting in 2020 is: the Chairman of the Board of Directors EUR 45,000 and each Board member EUR 35,000. Approximately 40 percent of the annual remuneration will be paid in Vaisala Corporation’s series A shares acquired from the market and the rest in cash.

In addition, the Annual General Meeting decided that the compensation fee per attended meeting for the Chairman of the Audit Committee is EUR 1,500 and EUR 1,000 for each member of the Audit Committee, the Chairman and each member of the Remuneration and HR Committee, and any other committee established by the Board of
Directors for the term until the close of the Annual General Meeting in 2020. The meeting fees will be paid in cash.

Remuneration of the Board of Directors (accrual basis)

 

EUR 1,000 2019 2018
Petri Castrén 44 43
Petra Lundström 39 35
Yrjö Neuvo (until March 26, 2019)   35
Mikko Niinivaara (until March 26, 2019) 2 43
Jukka Rinnevaara (as of March 26, 2019) 37  
Kaarina Ståhlberg 41 43
Tuomas Syrjänen (as of March 26, 2019) 35  
Pertti Torstila  35 35
Raimo Voipio 46 48
Ville Voipio 42 35
Total 321 317

 

Re​muneration of the management

President and CEO

The Board of Directors decides on the remuneration of the President and CEO. The overall compensation consists of a monthly salary, fringe benefits, a pension plan, and an incentive plan (STI) as well as the payment of share-based incentive plan LTI 2016. The maximum annual incentive is limited to 72 percent of the President and CEO’s annual salary. The President and CEO belongs to a voluntary pension plan, which defines the retirement age as 62 years.

The notice period is 6 months for the President and CEO and 12 months for the employer. Severance pay and conditions of other
severance payments are equal to the respective salary.

Man​agement Group

The Board of Directors approves the compensation of the direct reports of the President and CEO. Overall compensation of the Management Group members consists of a monthly salary, fringe benefits, pension plan, and an incentive plan (STI) as well as the payment of share-based incentive plan LTI 2016. The maximum annual incentive (STI) is limited to 60 percent of the annual salary. The Management Group members belong to a voluntary pension plan, which defines the optional retirement age as 62 years.

Remuneration of the President and CEO (payment basis)

EUR 1,000

2019 2018
Salary 515 515
Bonuses 263 302
Share-based payment 514 502
Obligatory pension 135 146
Voluntary pension 120 120
Total 1,547 1,586

 

Remuneration of the members of the Management Group, excluding President and CEO (payment basis)

EUR 1,000

2019 2018
Salary 1,492 1,393
Bonuses 478 622
Share-based payment 1,061 1,319
Obligatory pension 342 360
Voluntary pension 242 235
Total 3,616 3,929

 

Share-base​d incentive plans

The share issue without payment approved by Vaisala’s Annual General Meeting on April 10, 2018 doubled the total number of series K and A shares. All share-related figures have been adjusted to reflect the increased number of shares. Until the end of 2017, the cost of the share part of the share-based payments corresponded to the value of Vaisala’s series A share closing price on the effective date of the incentive plan, and the cash-settled part of the share-based payments was valued at the closing price of the share. As of January 1, 2018, the cost of the share part of the share-based payments as well as the cash-settled (cash) part of the share-based payments correspond to the value of Vaisala’s series A share closing price on the effective date of the incentive plan.

On December 16, 2015, the Board of Directors resolved for the group key employees a share-based incentive plan that was based on the development of group’s profitability in calendar year 2016. The reward payment corresponded to 49% of the maximum target. On March 5, 2019, a total of 88,452 company’s series A shares were conveyed without consideration to the 30 key employees participating in this incentive plan. The rest of the reward was paid in cash. Closing price of Vaisala’s series A share was EUR 11.57 on the effective date of the incentive plan. A total expense of EUR 2.3 million was recognized of this plan in 2016–2019.

On December 15, 2016, the Board of Directors resolved for the group key employees a share-based incentive plan that was based on the development of group’s profitability in calendar year 2017. The reward will be paid partly in Vaisala’s series A shares and partly in cash in spring 2020. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. The maximum amount of this plan originally corresponded to 400,000 series A shares and the reward payment will correspond to 65% of the maximum target. No reward will be paid if a key employee’s employment or service ends before the reward payment date. The expenses of this share-based incentive plan are accrued over the term of the plan from April 2017 to March 2020.  Closing price of Vaisala’s series A share was EUR 17.90 on the effective date of the incentive plan. On December 31, 2019, this
share-based incentive plan was directed to approximately 35 persons and the maximum reward payable totals to 237,900 Vaisala’s series A shares, including the cash portion.

On February 7, 2018, the Board of Directors resolved for the group key employees a share-based incentive plan that was based on the development of group’s profitability in calendar year 2018. The reward will be paid partly in Vaisala’s series A shares and partly in cash in spring 2021. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. The maximum amount of this plan originally corresponded to 320,000 series A shares, and the reward payment will correspond to 55% of the maximum target. No reward will be paid if a key employee’s employment or service ends before the reward payment date. The expenses of this share-based incentive plan are accrued over the term of the plan from April 2018 to March 2021. Closing price of Vaisala’s series A share was EUR 22.10 on the effective date of the incentive plan. On December 31, 2019, this share-based incentive plan was directed to approximately 30 persons and the maximum reward payable totals to 168,970 Vaisala’s series A shares, including the cash portion.

On February 12, 2019, the Board of Directors resolved for approximately 45 group key employees a share-based incentive plan
that is based on the development of the total shareholder return (TSR) and profitability in 2019–2021. The reward will be paid partly in Vaisala’s series A shares and partly in cash in spring 2022. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. The maximum amount of this plan originally corresponded to 330,000 series A shares. No reward will be paid if a key employee’s employment or service ends before the reward payment date. In addition, Vaisala’s Board of Directors requires that the President and CEO and each member of the Management Group retains his/her ownership of shares received under this plan until the value of his/her ownership in Vaisala corresponds to at least his/her annual gross base salary. The expenses of this share-based incentive plan are accrued over the term of the plan from April 2019 to March 2022. Closing price
of Vaisala’s series A share was EUR 19.06 on the effective date of the incentive plan. On December 31, 2019, this share-based incentive plan was directed to approximately 45 persons.

On June 28, 2019, Vaisala had conveyed a total of 2,195 company’s series A shares without consideration to a person participating in the share-based incentive plans 2017 and 2018.

Expenses for the share-based incentive plans

EUR million 2015 2016 2017 2018 2019
Share-based incentive plan 2015 0.5 1.1 1.6 -0.1  
Share-based incentive plans 2016   0.7 1.2 0.7 0,2
Share-based incentive plan 2017     1.1 1.3 1,5
Share-based incentive plan 2018       0.6 1,2
Share-based incentive plan 2019         0,6


Corporate Governance Statement 2019