Remuneration

Remuneration Policy and Remuneration Reports

Optomed’s Annual General Meeting 2020 has approved  a remuneration policy for the Company. The remuneration policy presents the framework and governance for the remuneration of the members of the Board of Directors and the CEO of Optomed Plc. Optomed publishes yearly remuneration reports that describe the remuneration in more detail.

Remuneration of Members of the Board of Directors

The General Meeting of Shareholders determines the remuneration payable to the members of the Board of Directors.

The Annual General Meeting resolved the following on the Board of Directors’ annual remuneration:

• EUR 36,000 for the Chairman of the Board of Director
• EUR 18,000 for each member of the Board of Director

Further, the Annual General Meeting approved that a meeting fee in the amount of EUR 300 is paid to the Chairpersons and EUR 200 to the members of the Committees for Committee meeting. 40 percent of the Board of Directors remuneration is paid in Optomed shares and 60 percent in cash.

All in EUR thousand.

Remuneration of the CEO

The remuneration of the CEO of the Company consists of a monthly fixed salary of EUR 10,000 (effective 1 March 2020), customary fringe benefits and options granted as long-term incentive. The CEO Seppo Kopsala is also a large owner of the Company and therefore the interests of the CEO and the Company are efficiently aligned in terms of the Company’s share price development.

Optomed offers the CEO only the statutory Finnish TyEL pension. The current retirement age for the CEO follows the Finnish Employee’s Pension Act. The CEO’s contract may be terminated by either the CEO or Optomed with six months’ notice. If the Company terminates the CEO’s contract, the CEO is entitled to receive a severance pay corresponding to six month’s salary. The severance pay is not payable in case of a material breach by the CEO or when the contract is terminated on grounds equal to those under Chapter 7 Section 2 or Chapter 8 Section 1 or 3 of the Finnish Employment Contracts Act (55/2001, as amended).

The remuneration and benefits paid to the CEO during the financial years 2022 are presented in the following table:

^{All in EUR thousand.
1) Includes benefits}

Short Term Incentive

The short-term incentive (STI) performance criteria for 2022 were set by the Board in the beginning of the financial year, with a focus on growth and profitability and achievement of certain strategic targets.

The scheme includes several milestones that each have a revenue and EBITDA target. Both the EBITDA and revenue targets must be reached in order to trigger the payment for the milestone. The strategic targets mean various business development and other targets that must be reached in order to trigger the payment. Currently the scheme is heavily geared towards the revenue and EBITDA targets in terms of payouts. The STI scheme includes an aggregate payout limit of EUR 50,000 for the CEO. Based on the achieved performance during 2022, the CEO is not entitled to a bonus.

Long Term Incentive

For the financial period 2022, the salaries and benefits have completely consisted short term incentive scheme and fixed remuneration and no separate long-term incentive was paid. In addition, at the end of the year Seppo Kopsala has a total of 60,000 options of which 40,000 under the 2015 option program and 20,000 under the 2017 option program. The subscription prices of the options are EUR 3.50, and the exercise periods are 1 July 2020–1 July 2024 for both programs. The options are forfeited and automatically transferred to the Company without consideration if the employment or service relationship to the Group is terminated, for any reason whatsoever, or if the consultancy agreement with the Group is terminated, for any reason whatsoever, unless the Board of Directors decides to deviate from the rule.

Remuneration of Members of the Leadership Team

For the financial period 2022, the remuneration of the members of the Leadership Team of the Company (excluding the CEO) have consisted of a monthly fixed salary, customary fringe benefits and short and long term incentive schemes.

Short term incentive

In 2022, the Board approved short term incentive scheme of the Leadership team was based on revenue growth and profitability related targets. Based on the achieved targets of the short term incentive scheme in 2022, the Leadership Team excluding CEO will be paid a total combined bonus of EUR 0 in 2023.

Long term incentive

The members of the Leadership Team have received options entitling to shares in the Company as an incentive. The subscription prices of the options are EUR 3.50 – 5.00 and the exercise periods range between 1 July 2020– 31 December 2024. The options are forfeited and automatically transferred to the Company without consideration if the employment or service relationship to the Group is terminated, for any reason whatsoever, or if the consultancy agreement with the Group is terminated, for any reason whatsoever, unless the Board of Directors decides to deviate from the rule.

The remuneration presented below shows the remuneration paid to Optomed Plc’s leadership team (excluding the CEO) for the financial years 2022-2020:

Optomed offers the Leadership Team the statutory Finnish TyEL pension. The Leadership Team members’ employment contracts may be terminated on a mutual basis with a notice period ranging from two to six months. In addition, the Leadership Team members may be offered individual contribution-based pension plans amounting to a maximum of 20 percent of the fixed salary. Subject to approval by the Board of Directors of the Company, the Leadership Team members residing abroad may be offered pension plans paid in cash corresponding to the premium that would otherwise be payable to insurance companies. In addition, one member of the Leadership Team is subject to a separate pension arrangement.

The Leadership Team members’ employment contracts may be terminated on a mutual basis with a notice period ranging from two to six months. In addition, the Vice President of Software and the managing director of Optomed Software Oy, Markku Myllylä, is entitled to a severance pay of an amount equaling nine months’ salary in addition to the salary for the notice period if the Company terminates the managing director contract. The severance pay is not payable in case of a material breach by the CEO or when the contract is terminated on grounds equal to those under Chapter 7 Section 2 or Chapter 8 Section 1 or 3 of the Finnish Employment Contracts Act (55/2001, as amended).