Corporate Governance in 2012
Annual General Meeting
Glaston Corporation’s Annual General Meeting was held in Helsinki on 27 March 2012. The Annual General Meeting was attended by 89 shareholders, representing a total of 57,002,318 shares and votes.
The Annual General Meeting confirmed the financial statements and discharged the President & CEO and the Members of the Board of Directors from liability for financial year 2011. All documents relating to the Annual General Meeting are available on the Company’s website.
Composition of the Board of Directors
The Annual General Meeting confirmed that the Board of Directors shall have six members. Claus von Bonsdorff, Teuvo Salminen, Christer Sumelius, Andreas Tallberg and Pekka Vauramo were re-elected as Members of the Board. Anu Hämäläinen was elected to the Board of Directors as a new member. After the Annual General Meeting, the Board of Directors elected Andreas Tallberg as Chairman of the Board and Christer Sumelius as Deputy Chairman.
The personal information of Members of the Board and information on their ownership of Glaston’s shares are presented at the website: Investors/Corporate Governance/Board of Directors.
In 2012 Glaston’s Board of Directors held 12 meetings, of which 4 were via telephone conference. The attendance of Members of the Board at meetings was 97%.
President & CEO and Executive Management Group in 2012
Arto Metsänen has served as the Company’s President & CEO since 1 September 2009.
The composition of Glaston’s Executive Management Group changed during 2012, and at the end of the year the Executive Management Group had eight members. The composition of the Executive Management Group, the personal information of the president&CEO and the other members, and information on their ownership of Glaston’s shares are presented on the website: Investors/Corporate Governance/ Executive Management Group.
The Executive Management Group met 11 times in 2012.
Remuneration of Board of Directors and the Executive Management Group in 2012
Remuneration of the Board of Directors
The 2012 Annual General Meeting approved annual remuneration to the Chairman of the Board of Directors amounting to EUR 40,000, to the Deputy Chairman EUR 30,000 and to other Members of the Board EUR 20,000. In addition, the Chairman of the Board was paid a meeting fee of EUR 800 and the other Members of the Board EUR 500 for those meetings of the Board that they attended. Remuneration for meetings held by telephone was paid on a different basis. The travel expenses of Members of the Board are compensated in accordance with the company’s travel rules. None of the Members of the Board receives from the company remuneration unconnected with their work on the Board of Directors. The Members of the Board are covered by voluntary pension insurance accrued from their Board of Directors’ remuneration. The value of the pension insurance corresponds with the Finnish TyEL pension scheme. Remuneration paid to the Board of Directors is outlined in more detail in Note 30 of the consolidated financial statements and in a separate salaries and bonuses report.
Remuneration of the President & CEO and the Executive Management Group
Remuneration of the President & CEO and the Members of the Executive Management Group consists of a fixed monthly salary, an annual bonus (variable salary component) and a share-based incentive plan (variable salary component) intended as a long-term reward. The annual bonus is determined on the basis of Glaston’s financial performance. The indicator’s used are the Group’s result and the business area’s or business unit’s result. The maximum amount of the President & CEO’s annual bonus is 50% of annual salary. For the other members of the Executive Management Group, the maximum amount of annual bonus is 40% of annual salary.
In addition, the President & CEO has a separate share bonus plan, on the basis of which he received one year after the start of his employment relationship, i.e. on 3 September 2010, a total of 50,000 Glaston Corporation shares as well as cash to the sum required for the taxes and tax-related payments arising from the distributed shares on the date that the shares were awarded. The President & CEO’s period of notice is three months. In addition, the President & CEO is paid compensation corresponding to 12 months’ salary if he is dismissed by the Company. If more than 50% of the Company’s shares are transferred to a new owner in connection with a merger or acquisition, the President & CEO shall have the right to terminate his employment contract with 1 month’s notice, in which case he shall be paid one-off severance pay of EUR 200,000.
The President & CEO has the opportunity to retire at 63 years of age. The President & CEO and one member of the Executive Management Group are entitled to a supplementary pension that exceeds the statutory scheme. The retirement age of other members of the Executive Management Group is in accordance with normal local legislation.
On 12 December 2011, Glaston’s Board of Directors decided on a new share-based incentive plan for the Group’s key personnel. The share bonus plan has three performance periods, namely the calendar years 2012, 2013 and 2014. The Company’s Board of Directors will decide on the plan’s performance criteria and the targets set for them at the beginning of each performance period. The possible bonus of the plan for performance period 2012 was based on the Glaston Group’s operating result (EBIT) and net profit. In 2012 the performance criteria were not fulfilled. The share bonus plan’s target group consists of around 25 people. The bonuses payable on the basis of the plan will correspond during three years to a maximum of 4.8 million Glaston Corporation shares.
Auditing
At the 2012 Annual General Meeting, the accounting firm Ernst & Young Oy was elected as the company’s auditor.
The responsible auditor was Harri Pärssinen APA. Auditing units representing Ernst & Young have mainly served as the auditors of the company’s subsidiaries in each country.
