Statement on Digia Management Emoluments

This management emolument statement sets forth a summary of the financial benefits, remuneration system and thereto related decision-making pertaining to Board members and operative management of Digia Plc.

Board Emoluments

The Shareholders' Meeting decides on emoluments payable to the Board of Directors and grounds for the compensation of expenses. The 2013 AGM decided to pay monthly emoluments of EUR 2,500 to Board members, EUR 3,500 to the Vice Chairman and EUR 5,500 to the Chairman for their work on the Board. In addition, the AGM approved EUR 500 in fees per Board or committee meeting for all Board members. Moreover, the Shareholders’ Meeting decided that standard and reasonable costs resulting from work on the Board would be reimbursed against invoice.

In the 2013 financial year, a total of EUR 320,500 was paid in emoluments to the members of the Board of Directors for their work on the Board, as follows:

Päivi Hokkanen                                                                                                               EUR 38,000
Robert Ingman EUR 51,000
Kari Karvinen EUR 40,000
Pertti Kyttälä EUR 76,000
Seppo Ruotsalainen EUR 38,500
Leena Saarinen EUR 39,000
Tommi Uhari EUR 38,000


All emoluments were monetary. The company does not grant stock options or share-based remuneration for work on the Board.

Emoluments of the CEO and other management

Summary of the CEO remuneration system

The Board of Directors decides on the CEO’s salary, and other remuneration and benefits.


CEO Varelius’s remuneration package comprises a monthly salary in accordance with his director agreement, a bonus payable on the basis of reaching the set targets and the share bonus possibly payable pursuant to CEO’s share incentive scheme.

In addition to the monthly salary the CEO is paid a bonus equal to three months’ salary upon meeting the annual targets linked to the revenue and profit budgets set by the Board of Directors. If the targets are exceeded the bonus will increase up to a maximum amount equal to nine months’ salary for 120% outcome of the targets. In the event the profit target outcome is less than 80%, no bonuses will be paid at all, irrespective of the revenue outcome. Outcome of the targets shall be reviewed and the bonus paid biannually.

The share-based remuneration scheme for the top management of the Company was decided by the Board pursuant to authority given by the AGM in December 2013.

The scheme has three earning periods, which are years 2014-2016. The scheme provides the CEO with a possibility to earn a maximum bonus equal to the value of 100,000 shares in each earning period respectively pursuant to the earning criteria to be annually decided by the Board for the respective earning period. Regarding year 2014 the bonus shall be determined based on the earning per share (EPS) and revenue of the company. The minimum bonus (5,000 shares) requires an EPS of EUR 0.23 and revenue of EUR 90.0 million or an EPS of EUR 0.19 and revenue of EUR 94.0 million. Maximum bonus (100,000 shares) will become payable if the EPS amounts to a EUR 0.32 accompanied by a revenue of EUR 100.0 million or if the EPS amounts to a EUR 0.21 accompanied by a revenue of EUR 122.0 million.

Bonuses payable under the existing scheme will be paid in a 50/50 combination of shares and cash after the adoption of the financial statements following the close of the respective earning period. The cash payment is used primarily to cover taxes and other applicable fees and levies incurred from the bonus payment. The scheme includes no lock-up periods designed to restrict the disposal of shares already granted to the CEO.
 

CEO Financial benefits and main terms of service

In 2013 the CEO was paid EUR 378,312 in salary and benefits, of which salary and fringe benefits account for EUR 275,062 and bonuses for EUR 103,250.

The company may terminate the CEO’s service contract with six months’ notice. Upon such termination, he will receive remuneration for the notice period plus severance pay equalling 12 months’ salary. The CEO’s retirement age is as stipulated by law, and he has no supplementary pension agreement with the company.


Summary of the remuneration system of other management

Based on a proposal submitted by the CEO, the Board of Directors decides on the salary, other remuneration and other benefits to be paid to CEO’s direct subordinates.

Total remuneration package of CEO´s direct subordinates comprises a monthly salary and the bonus and share bonus payable on similar basis and terms as with the CEO.

Under the prevailing share bonus scheme the CEO’s direct subordinates will, in aggregate, be paid with a total maximum bonus equal to the value of 100,000 shares on same terms as the CEO.

Each GMT members’ retirement age is stipulated by law, and no member has a supplementary pension agreement with the company.