Remuneration

Last modified: 25.8.2020

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Remuneration

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

In addition, a meeting fee in the amount of EUR 500 is paid to the Chairman of the Audit Committee for each Audit Committee meeting. 40 percent of the Board remuneration is paid in Optomed shares and 60 percent in cash. The remuneration will be paid once a year in August, after Optomed’s H1 report has been announced.

 

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.

The remuneration and benefits paid to the CEO for the financial years 2019, 2018, 2017 and 2016 are presented in the following table:

  FY 2019 FY 2018 FY 2017 FY 2016
In EUR thousand        
Salaries and benefits 105 108 109 127
Share-based payments 86 48
Pension costs
Total 105 108 195 175

 

For the financial period 2019, the salaries and benefits have completely consisted of fixed remuneration. In addition, 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.

Optomed offers the CEO 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).

 

Remuneration of Members of the Leadership Team

For the financial period 2019, 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 incentives as in force from time to time. The members of the Leadership Team have previously 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. Furthermore, the Vice President of Software, Markku Myllylä, is entitled to a separate bonus arrangement, based on which he can receive a maximum of EUR 60,000 and an additional 60,000 option rights provided that Optomed Software Oy reaches certain financial targets. The Board of Directors resolves upon the remuneration of the Leadership Team based on the proposal of the Remuneration Committee. The CEO prepares the remuneration proposal to the Remuneration Committee.

The current group level Leadership Team has been established in 2019 and the majority of the members of Optomed’s previous management team prior to 2019 are now part of the Devices segment management team. The remuneration presented below is the remuneration paid to Optomed Oy’s management team during the years 2016 to 2018. The remuneration and benefits paid to Optomed’s management team (excluding the CEO) for the financial years 2018, 2017 and 2016 are presented in the following table:

  FY 2019 FY 2018 FY 2017 FY 2016
In EUR thousand        
Salaries and benefits 615 703 510 459
Share-based payments 163 71 475 231
Pension costs
Total 740 887 1 062 758

 

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).