Remuneration for the Executive Committee

In addition to the fixed monthly salary paid in the form of money and benefits in kind, the Managing Director and other members of the Executive Committee responsible for business areas or with functional areas of responsibility are offered a short-term result- and performance-based bonus system as well as a long-term share-based incentive scheme.

Result- and performance-based bonus system

The individual performance-based salaries for the Managing Director and other members of the Executive Committee are based on strategy-related goals set for the Group's result and individual goals related to this. The bonuses are based on Group results (1/3), individual goals (1/3), and general evaluation (1/3) in relation to expectations. The goals are updated on certain intervals and evaluations are made after approving the financial statement. The individual bonus may amount to a maximum of three times the basic monthly salary. Decisions concerning the bonus system are made by the Board of Directors, for the Managing Director, and by board´s remuneration and Corporate Governance Committee for other members of the Executive Committee.

Based on the result for 2010, bonuses between 2.5 and 3 times the monthly salary were paid to members of the Executive Committee. In 2011, a result-based salary totalling EUR 69,120 has been paid to the Managing Director and to the other members of the Executive Committee a total of EUR 303,391. The result based salaries for 2011 will be defined during Q1 of 2012.

Share-based incentive scheme 2010

The share-based incentive scheme for 2010 gave the Managing Director and other members of the Executive Committee an extra bonus for acquisition of shares in the company.  The scheme 2010 gave them the opportunity to subscribe for a maximum of 55,833 A series shares.

The share-related bonus for 2010 was based on the Group's long-term strategic goals such as equity per share, profitable growth, cost efficiency and increased customer closeness.

Based on the result for 2010, the Board of Directors decided that members of the Executive Committee may subscribe for 27,918 series A shares based on the share-based incentive scheme, corresponding 50% of the total scheme.

Appropriated shares may be divested 2 years from acquisition at the earliest, in compliance with normal insider rules and other general restrictions concerning trading with company shares applicable at the time.  

Share-based incentive scheme 2011

A new share-based incentive scheme is introduced for the Managing Director and other members of the Executive Committee in 2011.

The reward will be paid partly as the A shares in Aktia plc and partly in cash. The proportion to be paid in cash is intended for taxes and tax-related costs arising from the reward to a key person. The incentive scheme is divided in two parts.

The first part of the scheme is based on earnings criteria and includes three earning periods; the calendar years 2011—2012, 2012—2013 and 2013—2014. The earnings criteria for the earning period 2011–2012 are based on the development of the Aktia Group's cumulated adjusted equity during the period 1 January 2011 – 31 December 2012 (NAV) (impact 50%) and of the Group's total net provision and insurance income in the period 1 January 2011 – 31 December 2012 (impact 50%).

The potential reward for each earning period will be paid in four instalments over a time of approximately three years after each earning period. The Board of Directors has stipulated a maximum level for the reward per key person. In general, the reward is not paid to a key person who is no longer employed by the Aktia Group at the time of payment of rewards.

The second part of the scheme enables key personnel to receive also a conditional reward on the basis of acquisition of A shares in Aktia plc when the incentive scheme is implemented. This conditional reward is paid to key personnel by the end of April 2016 at the latest, and it consists of both shares and cash providing that the key person is employed by the Aktia Group, and that the shares required for payment of the conditional reward have not been transferred, at the time of payment of rewards.

Key persons are obliged to hold half of all shares received through the incentive scheme until the total value of the shares amounts to the value of their gross annual salary. They shall hold the shares throughout their employment in the Group.

The maximum reward paid on the basis of the scheme may amount to 401,200 A shares in Aktia plc and a sum in cash corresponding the value of the shares. The new incentive scheme has been prepared in accordance with new regulations concerning remuneration schemes in the financial sector.

Membership in the personnel fund

The Managing Director and other members of the Executive Committee were members of the Group's personnel fund in 2011.

The Board of Directors establishes the calculation basis for a profit-sharing provision payable to the Group's pension fund annually. For 2011 a profit-sharing provision of 10% of the part of the operating profit for the period from 1 January to 31 December 2011 exceeding EUR 35 million according to Aktia plc's consolidated income statement, however, a maximum of EUR 3 million.

Based on Aktia's good result in 2010, the personnel fund received the maximum profit-sharing provision, i.e. EUR 3 million which was paid in 2011. The individual shares of the profit-sharing provision for the Managing Director and Executive Committee will be decided later during the year.
 
The profit-sharing provision for 2011 will be defined during Q1 of 2012.

Pension scheme

I addition to statutory pensions, Aktia has taken out supplementary pension insurance for the members of the Executive Committee. The retirement age of Executive Committee members is between 60 and 63. On reaching retirement age, members of the Executive Committee receive a pension of 60% of the pensionable salary. The cost for the supplementary pension insurance (excluding the Managing Director) amounted to EUR 206,194 in 2011. 
 

Remuneration paid to members of the Executive Committee,
excluding the Managing Director