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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 the Board’s Nomination and Remuneration Committee is to assist the Board of Directors in matters related to the remuneration of the Company's 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 held in April 2019, 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 36,000 euros per year and the Chairman of the Board of Directors 72,000 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 held in April 2019, 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 100 per cent of the annual salary. In addition, the CEO has car and phone benefits. 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.

In 2019 President and CEO Juha Näkki’s basic salary was EUR 306,576.00. In 2019, his car, phone and medical expenses insurance benefits totalled to EUR 21,781.92. EUR 163,379.66 of performance based bonus accrued from year 2018 was paid to the President and CEO in 2019. 

The President and CEO is included in the share-based incentive plan for the Group's key personnel. The incentive plan includes one three year earning period comprising calendat years 2017-2019. The potential nonrecurring reward of the incentive plan will be paid after the earning period in 2020.

The President and CEO is included in the share-based incentive plan for the Group's key personnel. The incentive plan includes one three year earning period comprising calendat years 2020-2022. The potential nonrecurring reward of the incentive plan will be paid after the earning period in 2023.

In 2019, 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 2019 the Management Group members received a total of EUR 967,503.05 in basic salary. Car, phone and medical expenses insurance benefits in 2019 totalled to EUR 48,364.15. A total of EUR 463,665.39 of performance based bonus accrued from year 2018 was paid to Management Group members in 2019.

 

Share-based incentive plan

 

The Board of Directors of Etteplan Oyj decided on February 5, 2020, to establish a new share-based incentive plan for the Group’s key personnel. The incentive plan includes one earning period, comprising the calendar years 2020-2022. The earnings criteria are Etteplan Group’s revenue increase and the development of Total Shareholder Return (TSR). The potential reward will be paid partly in the Company's shares and partly in cash. The proportion to be paid in cash is intended to cover taxes and tax-related costs arising from the reward to the key personnel. Approximately 25 people, including the Management Group of Etteplan, belong to the target group of the incentive plan. The rewards to be paid on the basis of the plan will correspond to the value of an approximate maximum total of 390,000 Etteplan Oyj shares (including also the proportion to be paid in cash). The shares to be paid out as potential rewards will be transferred from the shares held by the Company or shares acquired from the market, and therefore the incentive plan will have no diluting effect on the value of the share. The potential nonrecurring reward of the incentive plan will be paid after the earning period in 2023.

The Board of Directors of Etteplan Oyj decided on May 31, 2017, to establish a new share-based incentive plan for the Group’s key personnel. The incentive plan includes one earning period, comprising the calendar years 2017-2019. The earnings criteria are Etteplan Group’s revenue increase and the development of Total Shareholder Return (TSR). The potential reward will be paid partly in the Company's shares and partly in cash. The proportion to be paid in cash is intended to cover taxes and tax-related costs arising from the reward to the key personnel. Approximately 20 people belong to the target group of the incentive plan. The rewards to be paid on the basis of the plan will correspond to the value of an approximate maximum total of 260,000 Etteplan Oyj shares (including also the proportion to be paid in cash). The shares to be paid out as potential rewards will be transferred from the shares held by the Company or shares acquired from the market, and therefore the incentive plan will have no diluting effect on the value of the share. The potential nonrecurring reward of the incentive plan will be paid after the earning period in 2020.

During the 2019 financial period no nonrecurring rewards from share'based incentive plans were paid for either the Company's President and CEP or key personnel.

Remuneration statement

A remuneration statement is updated regularly.

Etteplan remuneration statement 2019:
Etteplan_remuneration_statement_2019.pdf

Etteplan remuneration statement 2018:
Etteplan_remuneration_statement_2018.pdf

Etteplan remuneration statement 2017:
Etteplan_remuneration_statement_2017.pdf

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 Jan 1 – Dec 31 2019 2018 2017 2016 2015 Revenue 263,292 236,477 214,768 183,938 141,143 Change in revenue, % 11.3 10.1 16.8 30.3 7.0 Operating profit (EBITA) 25,964 22,555 17,387 12,070 9,540 % of revenue 9.9 9.5 8.1 6.6 6.8 Operating profit (EBIT) 22,819 20,184 15,484 10,131 8,594 % of revenue 8.7 8.5 7.2 5.5 6.1 Profit before taxes and non-controlling interest  21,924 19,396 14,745 9,441 7,933 % of revenue 8.3 8.2 6.9 5.1 5.6 Profit for the financial year 17,387 15,280 11,586 7,604 6,189 Return on equity, % 24.1 24.4 20.9 17.4 19.5 ROCE, % 19.9 21.3 17.8 14.8 17.4 Equity ratio, % 38.9 42.9 40.7 40.0 37.8 Gross investments 36,908 16,527 7,589 30,186 9,867 % of revenue 14.0 7.0 3.5 16.4 7.0 Net gearing, % 52.6 29.8 43.0 55.9 41.6 Personnel, average 3,305 2,995 2,711 2,407 1,948 Personnel at year end 3,447 3,055 2,802 2,545 2,074 Staff costs 172,520 156,183 144,965 129,172 101,452   Back to Key financial data Read more

Consolidated statement of comprehensive income

Back to Key financial data   EUR 1,000 Jan 1 – Dec 31, 2019   Jan 1 – Dec 31, 2018   Revenue 263,292   236,477   Other operating income 2,582   1,172   Materials and services -26,550   -21,822   Staff costs -172,520   -156,183   Other operating expenses -29,273   -33,667   Depreciation and amortization -14,712   -5,792   Operating profit (EBIT) 22,819 8.7% 20,184 8.5% Financial income 695   791   Financial expenses -1,590   -1,580   Profit before taxes 21,924   19,396   Income taxes -4,536   -4,116   Profit for the financial year 17,387   15,280   Other comprehensive income, that may be reclassified to profit or loss         Currency translation differences -398   -1,200   Other comprehensive income, that will not be reclassified to profit or loss         Change in fair value of equity investments at fair value through other comprehensive income -75   3   Other comprehensive income for the year, net of tax -473   -1,197   Total comprehensive income for the year 16,915   14,083             Profit for the financial year attributable to         Equity holders of the parent company 17,387   15,280   Total comprehensive income attributable to         Equity holders of the parent company 16,915   14,083   Earnings per share calculated from the profit attributable to equity holders of the parent company         Basic earnings per share, EUR 0.70   0.62   Diluted earnings per share, EUR 0.70   0.62     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  Dec 31, 2019 Dec 31, 2018 ASSETS     Non-current assets     Goodwill 79,044 65,165 Other intangible assets 27,472 20,856 Tangible assets 17,264 4,065 Investments at fair value through other comprehensive income 387 695 Other non-current receivables 54 54 Deferred tax assets 259 161 Non-current assets, total 124,480 90,995       Current assets     Inventory 313 362 Work in progress 22,498 20,503 Trade and other receivables 39,332 32,367 Current tax assets 401 223 Cash and cash equivalents 15,878 16,115 Current assets, total 78,421 69,569 TOTAL ASSETS 202,901 160,564       EQUITY AND LIABILITIES     Equity     Share capital 5,000 5,000 Share premium account 6,701 6,701 Unrestricted equity fund 20,101 20,101 Own shares -700 -452 Cumulative translation adjustment -4,299 -3,901 Other reserves 108 231 Retained earnings 32,441 24,567 Profit for the financial year 17,387 15,280 Equity, total 76,740 67,527       Non-current liabilities     Deferred tax liabilities 6,481 4,518 Interest-bearing liabilities 33,116 24,105 Other non-current liabilities 27 2,036 Non-current liabilities, total 39,624 30,659       Current liabilities     Interest-bearing liabilities 23,139 12,147 Advances received 5,378 3,064 Trade and other payables 55,588 45,386 Current income tax liabilities 2,433 1,782 Current liabilities, total 86,537 62,378 Liabilities, total 126,161 93,037 TOTAL EQUITY AND LIABILITIES 202,901 160,564   The notes are an integral part of the financial statements.   Back to Key financial data Read more

Consolidated statement of cash flows

Back to Key financial data   EUR 1,000 Jan 1 - Dec 31, 2019 Jan 1 - Dec 31, 2018 OPERATING CASH FLOW     Cash receipts from customers 263,365 239,983 Operating expenses paid -225,189 -212,081 Operating cash flow before financial items and taxes 38,176 27,903       Interest and payment paid for financial expenses -1,192 -956 Interest received 162 59 Income taxes paid -4,262 -3,950 Operating cash flow (A) 32,884 23,055       INVESTING CASH FLOW     Purchase of tangible and intangible assets -2,063 -1,752 Acquisition of subsidiaries, net of cash acquired -21,049 -8,262 Proceeds from sale of tangible and intangible assets 81 21 Proceeds from sale of investments 215 1 Investing cash flow (B) -22,816 -9,992       Cash flow after investments (A+B) 10,068 13,063       FINANCING CASH FLOW     Purchase of own shares -519 -516 Expenses paid for directed share issue 0 -7 Issue of new current loans 2,020 3,559 Repayments of current loans -8,440 -24,743 Issue of new non-current loans 13,500 22,102 Payment of finance lease liabilities -9,624 -1,765 Dividend paid -7,454 -5,684 Financing cash flow (C) -10,517 -7,054       Variation in cash (A+B+C) increase (+) / decrease (-) -449 6,009       Assets at the beginning of the financial period 16,115 10,074 Exchange gains or losses on cash and cash equivalents 212 32 Assets at the end of the financial period 15,878 16,115   The notes are an integral part of the Financial Statements.   Back to Key financial data Read more

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