Remuneration and incentive schemes

The Annual General Meeting decides on the remuneration of the members of the Supervisory Board annually, on the basis of the proposal prepared to the Annual General Meeting by the Shareholders’ Nomination Board. The remuneration paid to the Supervisory
Board in 2019 was as follows:

• Meeting compensation: EUR 250/meeting
• Compensation for loss of working time: EUR 250 for meeting and assignment dates
• Fee of the Chairman of the Supervisory Board: EUR 1,500/month
• Fee of the Deputy Chairman of the Supervisory Board: EUR 750/month
• Travel allowance according to the Company’s travel policy.

Meeting compensation and compensation for loss of working time is paid for meetings of Supervisory Board and for Chairman and Deputy Chairman for those Board of Director`s meeting where they attend to carry out the tasks of Supervisory Board.

The members of the Supervisory Board have no share incentive plans or share-based bonus schemes, nor are they entitled to any other financial benefits besides the remunerations decided on by the Annual General Meeting.

In 2019, the monthly and meeting fees paid to the members of the Supervisory Board for participating in the work of the Supervisory Board (including fees for work performed in other companies within the same Group) were as follows:

More detailed brakdown of the remuneration is available in the Annual Report on page 122.

The Annual General Meeting decides on the remuneration of the members of the Board of Directors annually, on the basis of the proposal prepared to the Annual General Meeting by the Shareholders’ Nomination Board. Remuneration is handled in the form of monetary compensation. The members of the Board of Directors have no share incentive plans or share-based bonus schemes, nor are they entitled to any other financial benefits besides the remunerations decided on by the Annual General Meeting.

The remuneration paid to the Board of Directors in 2019 was as follows:

• Meeting compensation: EUR 300/meeting
• Compensation for loss of working time: EUR 300 for meeting and assignment dates
• Fee of the Chair of the Board of Directors: EUR 4,700/month
• Fee of the Deputy Chair of the Board of Directors: EUR 2,500/month
• Fee of members of the Board of Directors: EUR 2,000/month
• Travel allowance according to the Company`s travel policy.

Meeting compensation and compensation for loss of working time is paid for members of Board of Directors beside of Board meetings also for meetings of Remuneration and Nomination Committee and those meetings of Supervisory Board where Board members attended.

In 2019 monthly fees and meeting fees paid to the members of the Board of Directors for participating in the procedures of the Board of Directors (including being a member of the Board of another company that is part of the same Group) were the following:

More detailed brakdown of the remuneration is available in the Annual Report on page 123.

The remuneration of Atria Plc’s management aims to promote the company’s long-term financial success and competitiveness and the favorable development of shareholder value. The bonus scheme for the management consists of a fixed monthly salary, merit pay and pension benefits. The company has a share incentive plan since 1 January 2018.

The Board of Directors’ Nomination and Remuneration Committee prepares the following for a decision to be made by the Board of Directors: (i) the terms of the service contracts of the CEO and Deputy CEO; (ii) the remuneration, fees and other employment benefits of the directors who report to the CEO; (iii) the forms and criteria of the bonus and incentive schemes of top management; and (iv) the content and group assignments of the pension programs of the company’s management.

Atria Plc’s Board of Directors decides on the remuneration, other financial benefits and criteria applied in the merit pay system for the Group’s CEO, Deputy CEO and Management Team, as well as the merit pay principles used for other management members. The directors of each business area and the Group’s CEO decide on the remuneration of the members of the management teams of the various business areas according to the one-over-one principle. The performance bonus systems for the management teams of the business areas are approved by the Group’s CEO.

The base salary for CEO is EUR 541,415/year containing fringe benefits. The remuneration of the CEO and the Deputy CEO consists of base salary (including fringe benefits), short and long-term variable remuneration, pension and other benefits. The proportion of variable elements of the CEO´s and Deputy CEO´s total remuneration is depending on the Atria share value as parts of the variable remuneration is given in shares. To illustrate, at a share value of EUR 10,00, variable remuneration corresponds to maximum 45% of the CEO’s and maximum 36% of the Deputy CEO’s total remuneration, respectively. At a share value of EUR 13,50, variable remuneration corresponds to maximum 50% of the CEO’s and maximum 40% of the Deputy CEO’s total remuneration, respectively. In year 2019 the part of the variable remuneration was 7 % of the CEO`s total remuneration and 3 % of Deputy CEO`s total remuneration.

For the members of Atria Group Management Team there has been agreed a group pension arrangement accepted by the Atria Board of Directors. The retirement age based on the group pension arrangement is for Atria Group Management Team members 63 years. According to the pension arrangement agreement, if the legislation concerning pension changes, the retirement age may be altered. Some of the members of Atria Group Management Team, for example CEO and Deputy CEO, have nevertheless the right to retire at the age of 60. The pension arrangement is payment based and the amount of pension is based on the annual earnings as decided by the Board of Directors (including monetary salary and fringe benefits without cash payments of incentive schemes).

The agreements for CEO and Deputy CEO are valid until further notice. According to the CEO’s contract, the period of notice is six months for both parties. If the company terminates the contract, the CEO is entitled to the salary for the period of notice and severance pay, which together correspond to 18 months’ salary. There are no terms and conditions for any other compensation based on the termination of employment. According to the Deputy CEO’s contract, the period of notice is six months for both parties. If the company terminates the contract, the Deputy CEO is entitled to the salary for the period of notice and severance pay, which together correspond to 14 months’ salary. There are no terms and conditions for any other compensation based on the termination of employment.

Long-term share incentive plan
In 2017, Atria Plc’s Board of Directors decided on the long-term incentive programme for management and key personnel for the period 2018–2020. The aim of the share incentive programme is to encourage Atria’s management to acquire shares in the company and to take action and make decisions that will increase the company’s long-term value.

The programme based on share and cash incentives is divided into three year-long earning periods, the second earning period having started 1 January 2019 and expired 31 December 2019. The bonuses payable under the programme are based on the company’s earnings per share (EPS) (70%) and organic growth (30%). The bonuses for 2019 will be paid in three equal instalments in 2020, 2021 and 2022, partly in the form of shares in the company and partly in cash. The cash sum is intended to cover the taxes and tax-like fees arising from the bonus. If a person’s employment relationship ends before the payment of the bonus, the bonus will not usually be paid. The target group for the share incentive programme can contain a maximum of 40 people. The estimated total value of bonuses payable for the 2019 earning period is approximately EUR 0.1 million.

The ended long-term incentive plan
All payments from the earning period implemented in 2015–2017 were based on the Group’s earnings per share (EPS) excluding non-recurring items. Cash bonuses payable under the plan for the entire 2015–2017 earning period was capped at EUR 4.5 million. The plan expired on 31 December 2017, and it covered a maximum of 45 people. The CEO as well as members of the Group’s Management Team and the Management Teams of Business Areas were covered by the programme. For the entire 2015–2017 earning period, bonuses worth EUR 2.1 million were accrued. The final bonus payment will be paid in March 2020 and is estimated at EUR 0.2 million.

Short-term incentive plan
The maximum amount of bonus pay under Atria’s short-term incentive plan is 25 to 50% of the annual salary, depending on the effect on the results and the level of competence required for the role. The criteria in the bonus pay plan are the performance requirements and net sales at Group level and in the area of responsibility of the person concerned. In addition to the CEO and other members of the Management Team, Atria Plc’s merit bonus plans cover approximately 40 people.

The Board of Directors’ valid authorisations concerning remuneration Atria Plc’s Annual General Meeting held on 29 April 2020 authorised the Board of Directors
to decide on the acquisition of a maximum of 2,800,000 of the company’s own series A shares; and an issue of a maximum of 5,500,000 new series A shares and/ or on the disposal of any series A shares held by the company through a share issue or by granting option rights or other special rights entitling people to shares as referred to in Chapter 10, Section 1 of the Limited Liability Companies Act, in both cases under terms and conditions which enable the use of the acquired and/or issued shares as part of the company’s incentive plan.