Remuneration

The Annual General Meeting decides on the remuneration of the Chairman, Vice Chairman and Board members as well as on the remuneration of 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, remuneration levels for similar positions among peer companies and external references. All employees are included in a bonus plan that promotes the development of net sales, operating result and cash flow.

Remuneration for key executives includes a competitive salary and employee benefits according to local market practices as well as bonuses based on predefined annual performance indicators. Bonus plans promote development of net sales, operating result and cash flow. The key executives also belong to long-term share-based incentive plans, which are based on the development of the company’s profitability.

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 28, 2017 decided that the annual fee payable to the Board members for the term until the close of the Annual General Meeting in 2018 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 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 for the term until the close of the Annual General Meeting in 2018. The compensation per attended meeting for the Chairman and each member of the Remuneration and HR Committee and any other committee established by the Board of Directors is EUR 1,000 for the term until the close of the Annual General Meeting in 2018.

Remuneration of the Board of Directors (accrual basis)

EUR 1,000 2017 2016
Petri Castrén (since March 28, 2017) 30 -
Petra Lundström 36 41
Yrjö Neuvo 39 40
Mikko Niinivaara 44 44
Kaarina Ståhlberg (since April 5, 2016) 43 34
Maija Torkko (until April 5, 2016) - 11
Pertti Torstila  39 35
Raimo Voipio 49 50
Ville Voipio 35 35
Total 315 290

 

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 a performance bonus as well as the Share-Based Incentive Plans 2015, 2016 and 2017. The maximum annual bonus 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 compensations 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 a performance bonus as well as the Share-Based Incentive Plans 2015, 2016 and 2017. The maximum annual bonus 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 (accural basis)

EUR 1,000

2017 2016
Salary 512 494
Bonuses 323 178
Share-based payment 639 315
Obligatory pension 126 135
Voluntary pension 120 116
Total 1,720 1,238

 

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

EUR 1,000

2017 2016
Salary 1,363 1,129
Bonuses 650 355
Share-based payment 1,580 846
Obligatory pension 320 275
Voluntary pension 228 195
Total 4,142 2,800

 

Remuneration of the President and CEO and the members of the Management Group in 2017 (accrual basis)

EUR 1,000 Salary Bonuses Share-based payment Obligatory pension Voluntary pension Total
President and CEO 512 323 639 126 120 1,720
Other Management Group Members 1,363 650 1,580 320 228 4,412
Total 1,875 973 2,219 446 348 5,861

Share-base​d Incentive Plans

On February 10, 2014, the Board of Directors resolved for the Group key employees a share-based incentive plan that was based on the development of Group’s profit ability in calendar year 2014. On March 8, 2017, a total of 21,006 company’s series A shares were conveyed without consideration to the 22 key employees participating in this incentive plan. The rest of the reward was paid in cash. The cost of the proportion of share reward corresponded to the value of Vaisala’s series A share closing price of EUR 23.69 on the effective date of the incentive plan, and the cash proportion was valued at the closing price of the share on March 8, 2017. A total expense of EUR 1.2 million was recognized of this plan in 2014–2017.

On December 18, 2014, the Board of Directors resolved for the Group key employees a share-based incentive plan that was based on the development of Group’s profit ability in calendar year 2015. The reward will be paid partly in Vaisala’s series A shares and partly in cash in spring 2018. 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 160,000 shares. 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 May 2015 to March 2018. The cost of the proportion of share reward corresponds to the value of Vaisala’s series A share closing price of EUR 24.16 on the effective date of the incentive plan, and the cash proportion is valued at the closing price of the share on December 31, 2017. This share-based incentive plan was directed to approximately 30 persons on December 31, 2017. The maximum reward payable on the basis of this share-based plan totals to 95,104 Vaisala’s series A shares, including the cash portion.

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 profit ability in calendar year 2016. The reward will be paid partly in Vaisala’s series A shares and partly in cash in spring 2019. 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 200,000 shares. 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 May 2016 to March 2019. The cost of the proportion of share reward corresponds to the value of Vaisala’s series A share closing price of EUR 23.13 on the effective date of the incentive plan, and the cash proportion is valued at the closing price of the share on December 31, 2017. This share-based incentive plan was directed to approximately 25 persons on December 31, 2017. The maximum reward payable on the basis of this share-based plan totals to 89,910 Vaisala’s series A shares, including the cash portion.

On February 10, 2016, the Board of Directors resolved for a share-based incentive plan, in which the earning criteria is uninterrupted employment of certain Group employees for a defined number of years. The reward will be paid partly in Vaisala’s series A shares and partly in cash in three equal installments during the term of the plan. 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 9,000 shares. 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 May 2016 to March 2018. The cost of the proportion of share reward corresponds to the value of Vaisala series A share closing price of EUR 23.13 on the effective date of the incentive plan, and the cash proportion is valued at the closing price of the share on December 31, 2017. The maximum reward payable on the basis of this share-based plan totals to 3,000 Vaisala series A shares, including the cash portion.

On December 15, 2016, the Board of Directors resolved for the Group key employees a share-based incentive plan that is 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 200,000 shares. 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. The cost of the proportion of share reward corresponds to the value of Vaisala’s series A share closing price of EUR 35.80 on the effective date of the incentive plan, and the cash proportion is valued at the closing price of the share on December 31, 2017. This share-based incentive plan was directed to approximately 35 persons on December 31, 2017. The maximum reward payable on the basis of this share-based plan totals to 128,375 Vaisala’s series A shares, including the cash portion.

Expenses for the share-based incentive plans

EUR million 2014 2015 2016 2017
Share-based incentive plan 2014 0.2 0.3 0.6 0.1
Share-based incentive plan 2015   0.5 1.1 1.6
Share-based incentive plans 2016     0.7 1.2
Share-based incentive plan 2017       1.1


Corporate Governance Statement 2017