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Principles applied to remuneration schemes

 

The goal of remuneration schemes is to promote competitiveness and long-term financial success of the Company and to contribute to the favourable development of shareholder value. Remuneration schemes are based on predetermined and measurable performance and result criteria.

The task of Board’s Nomination and Remuneration Committee is to assist the Board of Directors in matters related to the remuneration of the Company's CEO, the deputy CEO and other executives and to prepare matters related to the reward schemes for employees.

 

Decision-making process

 

The General Meeting shall decide on the remuneration payable for Board and Committee work as well as the basis for its determination. The Nomination and Remuneration Committee has been assigned the duty of preparing the remuneration of the Board. The Board of Directors shall decide on the remuneration of the CEO as well as other compensation payable to him or her. The compensation principles for the Management Group are determined by the CEO in cooperation with the Board of Directors.

 

Remuneration of the Board of Directors

 

According to the resolution passed by the Annual General Meeting of 2017, the remuneration for each member of the Board of Directors is 600 euros per meeting and for the Chairman of the Board of Directors 1,200 euros per meeting. In addition, each member of the Board receives 24,400 euros per year and the Chairman of the Board of Directors 48,800 euros per year. Daily allowances and travel expenses are paid to the Board members according to the Company’s travel policy.

According to the resolution passed by the Annual General Meeting of 2017, the remuneration for each member of the Nomination and Remuneration Committee is 600 euros per meeting and for the Chairman of the Nomination and Remuneration Committee 1,200 euros per meeting. In addition daily allowances and travel expenses are paid for the meetings to the committee members according to the Company’s travel policy.

Remuneration for Board and Committee work is not paid in the form of Company shares and the Board members are not in the target group of Company’s share based incentive plan.

 

Remuneration of the CEO

 

The CEO’s compensation consists of a basic salary and a yearly bonus decided annually by the Board on the basis of the Group’s financial result and other key targets. The maximum amount of yearly bonus is decided annually. In addition the CEO has car and phone benefits. The CEO has an agreement of a share based incentive plan. Statutory retirement age applies to the CEO. The term of notice for the CEO is six months. In the event of dismissal, the CEO is at the most entitled to receive compensation equivalent to 18 months’ salary which includes the salary for a six-month term of notice.

 

Information on the service contract of the CEO

 

In 2016 President and CEO Juha Näkki’s basic salary was EUR 274,407.60. In 2016, his car, phone and medical expenses insurance benefits totalled to EUR 16,050.60. EUR 140,510.00 of performance based bonus accrued from year 2015 was paid to the President and CEO in 2016.

In 2014 a share-based incentive plan was created for the Company´s President and CEO. The Restricted Stock Plan included one three year vesting period which included calendar years 2014-2016. The potential reward of the Plan was bound to the validity of the CEO's service and was paid in February 2017. In addition the President and CEO is included in the share-based incentive plan for the Group key personnel. No company-held shares were disposed in 2016 for the share-based incentive plan.

In 2016 no additional accrual basis pension insurance policy was paid for the President and CEO Juha Näkki.

 

Remuneration of other executives

 

The system of compensation for the members of the Management Group includes a basic salary and a performance based bonus. The principles for performance based bonus are decided annually. The maximum of the yearly bonus is 33-100 percent of the recipient’s annual salary depending on the member’s duties. No separate agreement has been made regarding early retirement for the members of the Management Group. The term of notice for a Management Group member is at least 4 months. In the event of dismissal, a Management Group member is at the most entitled to receive compensation equivalent to 10 months’ salary which includes the salary for a four-month term of notice.

In 2016 the Management Group members’ basic salary was in total EUR 1,032,619.93. In 2016, the car, phone and medical expenses insurance benefits of the Management Group members totalled to EUR 18,498.70. In total EUR 222,325.74 of performance based bonus accrued from year 2015 was paid to Management Group members in 2016.

 

Share-based incentive plan

 

The Board of Directors of Etteplan Oyj decided in February 2014 on a new share-based incentive plan for the Company´s President and CEO. The aim of the Plan was to combine the objectives of the shareholders and the CEO in order to increase the value of the Company, to commit the CEO to the Company, and to offer him a competitive reward plan based on earning the Company shares.

The new Restricted Stock Plan included one three year vesting period. The potential reward of the Plan was bound to the validity of the CEO's service. The reward from the vesting period was paid partly in the Company's shares and partly in cash in February 2017. The cash proportion was intended to cover taxes and tax related costs arising from the reward to the CEO. No reward would have been paid, if the CEO had terminated his service contract before the reward payment.

The reward paid on the basis of the Restricted Stock Plan amounted up to a maximum total of 25,000 Etteplan Oyj shares. In addition, the Company paid taxes and tax-related costs arising from the reward to the CEO.

The Board of Directors of Etteplan Oyj decided in June 2014 to establish a new share-based incentive plan for the Group key personnel. The aim of the Plan was to combine the objectives of the shareholders and the key personnel in order to increase the value of the Company, to commit the key personnel to the Company, and to offer them a competitive reward plan based on holding the Company shares.

The Plan included one earning period which included calendar years 2014, 2015 and 2016. The earnings criteria were Etteplan Group´s revenue increase and the development of Total Shareholder Return (TSR). Approximately 15 people belonged to the target group of the Plan.

The potential reward was paid partly in the Company's shares and partly in cash. The proportion paid in cash was intended to cover taxes and tax-related costs arising from the reward to the key personnel.

The rewards paid on the basis of the plan corresponded to the value of an approximate maximum total of 450,000 Etteplan Oyj shares (including also the proportion paid in cash).

In April 2016, the Nomination and Remuneration Committee of Etteplan’s Board of Directors decided, upon the implementation of the share issue, to revise the share-based incentive plans directed at the President and CEO and Etteplan’s key personnel. The number of shares paid under the plans will be increased by a factor of 1.05, which corresponds to the trading-weighted average of the closing prices of the Etteplan share between April 6 and May 6, 2016, divided by the share price inclusive of the TERP (Theoretical Ex-Rights Price) discount.

The shares paid out as potential rewards were transferred from the shares held by the Company or shares acquired from the market.

In its meeting in February 2017, Etteplan’s Board of Directors decided to transfer 26,263 shares in the Company to the President and CEO in accordance with the terms of the incentive plan described above. The shares paid out as rewards were transferred from the shares held by the Company. The Company paid taxes and tax-related costs arising from the reward. The transfer date of the shares was February 28, 2017.

In its meeting in February 2017, Etteplan’s Board of Directors decided to transfer 169,939 shares in the Company to key personnel in accordance with the terms of the incentive plan described above. The Company paid taxes and tax-related costs arising from the reward. The shares to be paid out as rewards were transferred from the shares held by the Company.
The transfer date of the shares was April 28, 2017.

Remuneration statement

A remuneration statement is updated regularly.

Etteplan remuneration statement 2016:
Etteplan_remuneration_statement_2016.pdf

Etteplan remuneration statement 2015:
Etteplan_remuneration_statement_2015.pdf

Etteplan remuneration statement 2014:
Etteplan_remuneration_statement_2014.pdf

Etteplan remuneration statement 2013:
Etteplan_remuneration_statement_2013.pdf

Etteplan remuneration statement 2012:
Etteplan_remuneration_statement_2012.pdf

Etteplan remuneration statement 2011:
Etteplan_remuneration_statement_2011.pdf

Etteplan remuneration statement 2010:
Etteplan_remuneration_statement_2010.pdf

Etteplan remuneration statement 2009:
Etteplan_remuneration_statement_2009.pdf

 

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Key financial data

5 year history

Back to Key financial data EUR 1 000, Financial period 1.1.-31.12. 2016 IFRS 2015 IFRS 2014 IFRS 2013 IFRS 2012 IFRS Revenue 183,938 141,143 131,916 128,647 134,479 Change in revenue, % 30.3 7.0 -1.9 -4.3 12.6 EBIT from business operations 12,071 9,540 7,394 6,280 9,297 % of revenue 6.6 6.8 5.6 4.9 6.9 Operating profit (EBIT) 10,131 8,594 7,856 6,366 8,715 % of revenue 5.5 6.1 6.0 4.9 6.5 Profit before taxes and non-controlling interest 9,441 7,933 7,168 5,672 7,542 % of revenue 5.1 5.6 5.4 4.4 5.6 Profit for the financial year 7,604 6,189 6,147 4,390 5,585 Return on equity, % 17.4 19.5 22.7 17.5 24.8 ROCE, % 14.8 17.4 17.8 14.6 20.4 Equity ratio, % 40.0 37.8 39.5 35.9 32.4 Gross investments 34,269 9,867 3,565 2,344 9,508 % of revenue 18.6 7.0 2.7 1.8 7.1 Net gearing, % 55.9 41.6 56.5 73.4 62.8 Personnel, average 2,407 1,948 1,813 1,736 1,756 Personnel at year end 2,545 2,074 1,859 1,728 1,776 Wages and salaries 129,172 101,452 94,367 70,363 70,571   Back to Key financial data Read more

Consolidated statement of comprehensive income

Back to Key financial data EUR 1,000 Note 1.1.-31.12.2016   1.1.-31.12.2015   Revenue 7 183,938   141,143   Other operating income 9 517   309   Materials and services 12 -13,893   -7,918   Staff costs 13 -129,172   -101,452   Other operating expenses   -26,440   -20,384   Depreciation and amortization 20, 21 -4,818   -3,104   Operating profit (EBIT)   10,131 5.5% 8,594 6.1% Financial income 15 555   589   Financial expenses 16 -1,245   -1,251   Profit before taxes   9,441   7,933   Income taxes 18 -1,838   -1,744   Profit for the financial year   7,604   6,189   Other comprehensive income, that may be subsequently reclassified to profit or loss           Foreign subsidiary net investment hedge 4.1.1 103   -41   Currency translation differences   -1,157   650   Change in fair value of investments available-for-sale   -7   43   Tax from items, that may be subsequently reclassified to profit or loss 18 -19   0   Other comprehensive income for the year, net of tax   -1,080   652   Total comprehensive income for the year   6,524   6,841               Income attributable to           Equity holders of the parent company   7,436   6,122   Non-controlling interest   168   67       7,604   6,189   Total comprehensive income attributable to           Equity holders of the parent company   6,356   6,779   Non-controlling interest   168   62       6,524   6,841   Earnings per share calculated from the result attributable to equity holders of the parent company           Basic earnings per share, EUR 19 0.33   0,28*   Diluted earnings per share, EUR 19 0.33   0,28*     *Comparison period's earnings per share have been issue adjusted. The rights issue factor was 1.050. The notes are an integral part of the financial statements.     Back to Key financial data Read more

Consolidated statement of financial position

Back to Key financial data (EUR 1,000 ) Note 31/12/2016 31/12/2015 ASSETS       Non-current assets       Tangible assets 20 2,910 2,179 Goodwill 21 58,128 42,734 Other intangible assets 21 18,036 9,418 Investments available-for-sale 22 680 687 Other non-current receivables 36 41 54 Deferred tax assets 35 365 161 Non-current assets, total   80,159 55,232         Current assets       Inventory 24 255 0 Trade and other receivables 25 49,180 28,296 Current tax assets 26 139 177 Cash and cash equivalents 27 4,750 8,807 Current assets, total   54,324 37,281 TOTAL ASSETS   134,483 92,513         EQUITY AND LIABILITIES       Capital attributable to equity holders of the parent company       Share capital 28 5,000 5,000 Share premium account 28 6,701 6,701 Unrestricted equity fund 28 18,524 4,406 Own shares 28 -386 -949 Cumulative translation adjustment 28 -1,981 -863 Other reserves 28 219 225 Retained earnings 28 17,099 13,980 Profit for the financial year 28 7,436 6,122 Capital attributable to equity holders of the parent company, total   52,613 34,621 Non-controlling interest   165 -3 Equity, total   52,777 34,618         Non-current liabilities       Deferred tax liabilities 35 3,293 1,754 Financial liabilities 30 23,807 8,296 Other non-current liabilities 32 649 92 Non-current liabilities, total   27,750 10,142         Current liabilities       Financial liabilities 30 10,461 14,925 Trade and other payables 33 42,513 31,901 Current income tax liabilities 34 982 927 Current liabilities, total   53,956 47,753 Liabilities, total   81,706 57,895 TOTAL EQUITY AND LIABILITIES   134,483 92,513   The notes are an integral part of the financial statements.   Back to Key financial data Read more

Consolidated statement of cash flow

Back to Key financial data EUR 1,000 1.1.-31.12.2016 1.1.-31.12.2015 OPERATING CASH FLOW     Cash receipts from customers 174,644 138,557 Operating expenses paid -165,607 -126,897 Operating cash flow before financial items and taxes 9,037 11,659       Interest and payment paid for financial expenses -813 -636 Interest received 44 40 Income taxes paid -2,606 -1,131 Operating cash flow (A) 5,661 9,932       INVESTING CASH FLOW     Purchase of tangible and intangible assets -1,879 -1,621 Acquisition of subsidiaries -22,262 -1,907 Proceeds from contingent asset 215 0 Proceeds from sale of tangible and intangible assets 24 1 Proceeds from sale of investments 0 1 Purchase of investments -10 0 Loan receivables, decrease 45 1 Investing cash flow (B) -23,866 -3,526       Cash flow after investments (A+B) -18,204 6,406       FINANCING CASH FLOW     Share issue net of cost 13,937 0 Purchase of own shares -693 -75 Short-term loans, increase 11,685 2,567 Short-term loans, decrease -22,547 -8,687 Long-term loans, increase 20,601 10,000 Long-term loans, decrease -4,569 0 Payment of finance lease liabilities -1,184 -985 Dividend paid and other profit distribution -3,046 -2,981 Financing cash flow (C) 14,184 -160       Variation in cash (A+B+C) increase (+) / decrease (-) -4,020 6,246       Assets at the beginning of the financial period 8,807 2,575 Exchange gains or losses on cash and cash equivalents -37 -14 Assets at the end of the financial period 4,750 8,807   The notes are an integral part of the financial statements.   Back to Key financial data Read more

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