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, 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, and operating result.

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 and operating result. 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 April 10, 2018 decided that the annual fee payable to the Board members for the term until the close of the Annual General Meeting in 2019 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 2019. 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 2019.

Remuneration of the Board of Directors (accrual basis)

 

EUR 1,000 2018 2017
Petri Castrén (since March 28, 2017) 43 30
Petra Lundström 35 36
Yrjö Neuvo 35 39
Mikko Niinivaara 43 44
Kaarina Ståhlberg 43 43
Pertti Torstila  35 39
Raimo Voipio 48 49
Ville Voipio 35 35
Total 317 315

 

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 payment of Share-Based Incentive Plan 2015. 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 payment of Share-Based Incentive Plan 2015. 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 (payment basis)

EUR 1,000

2018 2017
Salary 515 512
Bonuses 302 191
Share-based payment 502 205
Obligatory pension 146 126
Voluntary pension 120 120
Total 1,586 1,154

2017 figures converted to payment basis

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

EUR 1,000

2018 2017
Salary 1,393 1,363
Bonuses 622 423
Share-based payment 1,319 580
Obligatory pension 360 320
Voluntary pension 235 228
Total 3,929 2,915

2017 figures converted to payment basis

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 equity-settled (share) part of the share-based payments corresponded to the value of Vaisala’s series A share closing price on the grant 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 grant date of the incentive plan.

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 profitability in calendar year 2015. The reward payment corresponded to 74% of the maximum target. On March 12, 2018, a total of 95,092 company’s series A shares were conveyed without consideration to the 27 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 12.08 on the effective date of the incentive plan. A total expense of EUR 3.2 million was recognized of this plan in 2015–2018.

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 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 400,000 shares and the reward payment will correspond to 49% 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 May 2016 to March 2019. Closing price of Vaisala’s series A share was EUR 11.57 on the effective date of the incentive plan. On December 31, 2018, this share-based incentive plan was directed to approximately 30 persons and the maximum reward payable totals to 176,904 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 was uninterrupted employment of certain Group employees for a defined number of years. This share-based incentive plan ended in March 2018, and the remaining reward, corresponding to 3,000 Vaisala’s series A shares including the cash portion, was conveyed without consideration to the key employees participating in this incentive plan. A total expense of EUR 0.3 million was recognized of this plan in 2016–2018.

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 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, 2018, this share-based incentive plan was directed to approximately 35 persons and the maximum reward payable totals to 248,300 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 is 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 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 20.89 on the effective date of the incentive plan. On December 31, 2018, this share-based incentive plan was directed to approximately 30 persons and the maximum reward payable totals to 174,510 Vaisala’s series A shares, including the cash portion.

Expenses for the share-based incentive plans

EUR million 2015 2016 2017 2018
Share-based incentive plan 2015 0.5 1.1 1.6 -0.1
Share-based incentive plans 2016   0.7 1.2 0.7
Share-based incentive plan 2017     1.1 1.3
Share-based incentive plan 2018       0.6


Corporate Governance Statement 2018