Previous Remuneration Statement
Remuneration statement
Rapala VMC Corporation’s Top management consists of members of the Board of Directors, CEO and other members of the Executive Committee. Jussi Ristimäki acted as President and CEO until September 26, 2019. Nicolas Cederström Warchalowski acted as President and CEO of Rapala VMC Corporation from March 1, 2020 until November 16, 2022.
Louis d’Alançon acts as Chairman and President & CEO from November 16 onwards. He also acted as Interim President and CEO between September 27, 2019 and February 29, 2020.
Share-based payments
In 2018, The Board of Directors of Rapala VMC Corporation approved a new Performance Share Plan for the Group key employees. The new plan is directed to approximately 40 people, including the CEO and other members of the Executive Committee of the Group.
The new Performance Share Plan 2018–2020 includes one three-year performance period, calendar years 2018–2020. The potential reward from the performance period will be based on the Group’s financial performance criteria which will be measured during the financial year 2020 and the Company’s share price criterion which will be measured during a measurement period of forty (40) consecutive trading days in November-December 2020. The Board of Directors may also resolve on other 40 trading day measurement periods. The financial performance criteria for the performance period are the Group Product Sales in 2020, the Group’s Comparable Earnings before Interest and Taxes margin in 2020 (EBIT %) and the Group’s Average Working Capital Ratio in 2020.
The rewards to be paid on the basis of the plan correspond to the value of an approximate maximum total of 900,000 Rapala VMC Corporation shares including also the proportion to be paid in cash. The potential rewards from the performance period 2018–2020 will be paid partly in the Company’s shares and partly in cash in 2021. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the participant. As a rule, no reward will be paid, if a participant’s employment or service ends before the reward payment.
A significant proportion of the reward allocations of the CEO and other members of the Executive Committee of the Group will be dependent on their personal investments in the Company shares and share ownership of the shares acquired through such investments.
During the 2019 financial year, no share-based incentives were paid to the President and CEO or other Executive Committee members.
Remuneration in 2019
Board remuneration
Annual General Meeting decides on the remuneration to be paid to the members of the Board of Directors based on the proposition prepared by significant shareholders of Rapala VMC Corporation. In 2019, the annual fee to the Chairman of the Board was EUR 80 000 and the fee to other Board members was EUR 30 000. In addition, a reward of EUR 1 000 was paid of a Board or its Committee meeting. Remuneration is paid in cash. Members of the Board are reimbursed for travel expenses corresponding to the corporation’s traveling compensation principles.
The following fees were paid to members of Rapala VMC Corporation’s Board and Remuneration Committee work during the financial year 2019:
Remuneration of president and ceo
The Board of Directors decides the remuneration of the President and CEO. Prior to the decision-making of the Board of Directors, the matter is prepared by the Remuneration Committee. Service terms and conditions have been specified in writing in a service agreement approved by the Board.
The remuneration of CEO consists of fixed salary with fringe benefits and variable remuneration components that will be decided each year, which may include short-term Group’s senior management bonus scheme and long-term incentive plan.
CEO and other members of the Executive Committee participate in the Group’s senior management bonus scheme. The amount and payment of the bonus require that the established sales and result targets are achieved. If the targets are not achieved, payment of bonus is fully at the discretion of the Board of Directors. Bonuses awarded under the scheme are paid in two installments, the first when the audited results for the relevant financial year are known and the second after a predetermined vesting period, to encourage retention of senior management. Principally the bonus can be no more than 100 percent of the annual salary.
Rapala VMC Corporation announced the change of CEO on September 27, 2019. Louis d’Alançon was appointed as the company’s new President and CEO. Louis d’Alançon succeeded Jussi Ristimäki, who acted as President and CEO since 2016. Louis d’Alançon did not have any pension arrangements and his termination period is 1 month.
Jussi Ristimäki’s pension security as the CEO was arranged under the statutory Finnish contribution-based employee pension plan. There was no additional pension scheme. A mutual notice time of six months was applied for Ristimäki when terminating the CEO agreement. The CEO was also entitled to a severance compensation corresponding to 12 months’ salary (excluding profit bonuses).
Remuneration paid to President and CEO and other Executive Committee members in financial year 2019 is presented below:
Remuneration of executive committee
In addition to the monthly salary, CEO and other members of the Executive Committee participate in the Group’s senior management bonus scheme. The amount and payment of the bonus requires that the established sales, result and cash flow targets are achieved. If the targets are not achieved, payment of bonus is fully at the discretion of the Board of Directors. Bonuses awarded under the scheme are paid in two installments, the first when the audited results for the relevant financial year are known and the second after a predetermined vesting period, to encourage retention of senior management. Principally the bonus can be no more than 100 percent of the annual salary.
