Governance  

Governance

DESTIA PRESIDENT AND CEO AND MANAGEMENT TEAM

The duty of Destia Group Oyj’s President and CEO is to lead the Company’s business operations and administration with the focus on Group’s interest and strategy in accordance with the Limited Liability Companies Act and the instructions and directives issued by the Board of Directors. The President and CEO is not a member of the Destia Group Oyj Board of Directors. The relationship of the President and CEO with Destia is stipulated in an executive agreement approved by the Board of Directors. Hannu Leinonen has served as President and CEO of Destia Group since 1 October 2009.

The President and CEO is assisted by Destia’s Management Team. In addition to the President and CEO, the Management Team consists of the managers for operational business units, CFO as well as the personnel representative. The Management Team is in charge of the Group’s business structure, management systems and general planning and reporting systems. The President and CEO and Destia’s Management Team prepare the Group’s strategic plans, significant mergers and acquisitions and investments for the Board of Directors as well as oversee their implementation and risk management. Under the leadership of the President and CEO, the Management Team is also responsible for the implementation of measures concerning the budget approved by the Board of Directors, in accordance with instructions. The President and CEO informs the Board of Directors about the development of the company’s business and financial situation. A Charter has been approved for Destia’s Management Team. The Management Team convenes regularly. The President and CEO oversees the flow of information between the Board of Directors and the Management Team.

In 2014, the Destia Management Team comprised President and CEO Hannu Leinonen, CFO Pirkko Salminen and Executive Vice Presidents Minna Heinonen, Jouni Karjalainen, Pasi Kailasalo, Jukka Raudasoja, Marko Vasenius and Seppo Ylitapio. Jouko Korhonen served as personnel representative in the Management Team.

In addition to the persons mentioned above, the Extended Management Team also included in 2014 Senior Vice President, Human Resources Laura Ahokas, Senior Vice President, Corporate Communications and Marketing Miia Apukka, General Counsel Aki Markkola and Executive Vice President, Customer Solutions Tom Schmidt. The Extended Management Team’s aim was to prepare and guide development projects and strategy concerning the entire Group and to develop the management system.

At the beginning of 2015 the Extended Management Team was replaced by the Company Development Team comprising of the Destia Management Team members, Directors of the Support Functions as well as other Directors deemed to be appropriate from time to time. The Company Development Team convenes quarterly to handle critical matters relating to Destia’s strategy.

Key compensation principles for the President and CEO and other Company management

All personnel are included in the Company’s incentive system. The compensation criteria of the incen-tive system are based on the financial objectives of the Group, operational business units and projects in addition to the goals agreed during annual personal development discussions. The basis for incentive compensation is found in the objectives of the Group’s strategy period. The Board of Directors approves the compensation criteria for the incentive system.

In addition to this, there is a separate instant incentive offered, which is awarded for excellent perfor-mance involving objectives not included in the general objectives of the incentive system.

On October 30, 2014, Destia's Board of Directors decided on a bonus scheme for 2015 covering all personnel. The bonus scheme forms a part of the overall personnel remuneration scheme. The bonus scheme brings a supportive, in-house co-operation and strategy enhancing control and reward element to compensation. The scheme will support and develop the Company's profitability and operat-ing conditions. The target group for the new bonus scheme is comprised of five different personnel groups: 1) personnel working on Destia’s projects, 2) Project Managers, 3) support function personnel and business unit support personnel 4) Unit directors and 5) Directors in Business Units.

On October 30, 2014, Destia’s Board of Directors decided to terminate all previous long term incen-tive programs and introduce a new one for years 2014-2018 with an intention to engage certain key employees and to offer a competitive remuneration for them. The terms and participants of the long term incentive program are decided by the Board of Directors. There are approximately 75 persons included in the program. Earning period is 2014-2018 and earning criteria is an increase in the Com-pany’s value. Earning criteria are same for all program participants. The criteria are defined on group level and they are different from the ones in the annual bonus scheme. The earned incentive shall be paid as monetary reward during 2019 at the latest.

The Group Human Resources function is responsible for the remuneration system and its functions.

The Management Team’s salaries and remuneration are approved by the Board of Directors on the basis of preparations made by the Nomination and Remuneration Committee.

Remuneration of the President and CEO

The executive agreement between the Company and President and CEO, in which the remuneration principles are agreed, has been renewed on parent company level on December 2, 2014.

Salary and the benefits of President and CEO were altogether 419,414 euro between January 1 and December 31, 2014. Based on 2013 bonus scheme President and CEO has been paid 141,441 euros and based on 2014 bonus scheme he shall be paid 142.380 euros. In addition to that President and CEO has been paid 150,825 euros based on long term incentive programs during 2014.

The aggregate remuneration of President and CEO consists of fixed monthly salary, annual variable bonus reward and long term incentive reward. Annual bonus reward is 60 per cent of fixed annual salary at maximum.

Annual bonus scheme 2015 criteria for President and CEO are based on group level financial targets (95 per cent) and occupational safety targets (5 per cent). Long term incentive criteria for President and CEO correspond to the ones described above in respect of the current long term incentive program.

The retirement age of President and CEO is 63 years according to his executive agreement. Pension is based on Employees Pensions Act and additional pension insurance taken by the Company. Annual premium of the additional pension insurance was 69,086 euros during 2014.

Term of notice of President and CEO executive agreement is 12 months for both parties. In case the Company terminates the agreement, President and CEO is entitled to receive compensation corresponding to 12 months’ salary in addition to 12 months’ salary paid during the notice period.

The Company has taken accident, life, travel and medical expense insurances for President and CEO, amounting altogether 25,068 euros for 2014. Beside that the Company pays his ADSL connection with annual fee of 351 euros during 2014.

Compensation for other management

The aggregate remuneration of the members of the Group Management Team consists of fixed monthly salary, annual variable bonus reward and long term incentive reward. Annual bonus reward of each Management Team member corresponds to his/her five (5) months’ salary at maximum.

Salary and the benefits of the Management Team members were altogether 1,430,256 euros during 2014. Based on 2013 bonus scheme the Management Team members have been paid 281,100 euro and based on 2014 bonus scheme they have been paid / shall be paid altogether 203.677 euro. Beside that the Management Team members have been paid 424,290 euros based on long term incen-tive programs during 2014.

One member of the Management Team has additional pension insurance corresponding to the one President and CEO has. Annual premium thereof was 25,236 euros during 2014.