Salary and remuneration report

Alma Media applies the Finnish Corporate Governance Code for listed companies, issued by the Securities Market Association on June 15, 2010 and valid as of October 1, 2010, in its unaltered form. This remuneration statement has been written in accordance with section 7 (Remuneration), Recommendation 47. The Finnish Corporate Governance Code for listed companies can be reviewed on the website of the Securities Market Association at www.cgfinland.fi.

Remuneration of the members of the Board of Directors

The Annual General Meeting of Alma Media Corporation decides on the remuneration of the Board members, based on a proposal prepared by the Nomination and Compensation Committee of the Board of Directors.

As decided by Alma Media's Annual General Meeting of 2010, the following fees are paid to the Board members for their work in the Board of directors and in its Committees: The Chairman of the Board shall be paid an annual fee of EUR 30,000, the vice chairman EUR 24,000 and ordinary members EUR 20,000. In addition, the chairmen of the Board and the Committees will be paid a fee of EUR 1,000, the vice chairman EUR 700 and ordinary members EUR 500 for each Board and committee meeting they attend. Additionally, travel expenses will be compensated.

The annual remuneration of the members of the Board of Directors is paid in Alma Media shares up to an amount corresponding to approximately 40% of the full amount of the remuneration, and the remainder in money for taxation purposes. Shares thus acquired may not be transferred until the recipient's membership in the Board has ended. In case shares cannot have been acquired until the end of 2010, for example due to a pending insider project, the full annual remuneration is paid in money.

The members of Board of Directors were paid the following fees for work in the Board and its committees in 2010 (EUR):

 
 

Annual fee

Fee paid in
shares

Meeting fee

Total

Kari Stadigh (Chairman)

30 000

 1606

20 000

50 000

Seppo Paatelainen
(Deputy Chairman)

24 000

1285

13 300

37 300

Lauri Helve

20 000

1070

9 500

29 500

Kai Seikku

20 000

1070

7 500

27 500

Erkki Solja

20 000

1070

8 000

28 000

Catharina Stackelberg-
Hammarén

20 000

1070

8 500

28 500

Harri Suutari

20 000

1070

10 500

30 500

In financial year 2010, the fees paid for the Board members totalled EUR 231 300.

Members of the Board of Directors of Alma Media Corporation are not in an employment relationship with the company. They are not included in the incentive system of Alma Media and have not received any other financial benefits. Alma Media does not have a share based incentive plan.

Remuneration of the President and CEO and the top management

The Board of Directors of Alma Media Corporation decides on the remuneration and reward system of the President and CEO of the parent company and his/her direct subordinates. The decision is based on the proposal prepared by the Nomination and Compensation Committee of the Board.

The reward system for the President and CEO of Alma Media Corporation, as well as the Group's top management, consists of a fixed salary (monthly salary), fringe benefits (car and mobile phone benefit), an incentive bonus for reaching financial and operational results (short-term remuneration scheme), an option programme (long-term remuneration scheme) and management retirement benefits. Alma Media does not have a share-based incentive plan. Eligibility for remuneration programmes is determined by the job position.

Alma Media's management incentive programme follows the terms and conditions of Alma Media's incentive programme, based on the principle of continuous result improvement. The incentive bonus for members of the Group Executive Team and heads of business units may be no more than 40% of their respective annual salaries. The CEO's incentive bonus may be up to 60% of his annual salary.

The incentive bonus is defined annually based on three criteria: meeting the Group's financial targets (weight 40%), meeting the business unit's financial targets (weight 40%) and meeting personal performance targets (weight 20%).

In 2010, the President and CEO of Alma Media Corporation received a total of EUR 590,251 in salary and other rewards, of which EUR 16,558 based on incentive bonus scheme. The total amount of salaries, rewards and benefits paid to other members of the Group Executive Team was EUR 1,543,516 of which EUR 44,357 were based on incentive bonus scheme.

Option programmes

In addition to the incentive remuneration system, Alma Media has two option programmes for the management in effect; the 2006 option programme and the 2009 option programme. The granting of option rights is decided by Alma Media's Board of Directors based on a proposal by the Nomination and Compensation Committee and according to the terms and conditions decided by the Annual General Meeting. The terms and conditions of the option programmes can be reviewed here.

The option rights granted to the President and CEO of Alma Media and other members of the Group Executive Team (December 31, 2010):


 

Options
2006A

Options
2006B

Options
2006C

Options
2009A

Options
2009B

Kai Telanne,
President and CEO

80 000

80 000 

80 000

100 000

100 000

Tuomas Itkonen

 

 

 

 30 000

30 000

Jouko Jokinen

25 000

25 000

25 000

30 000

30 000

Kari Kivelä

40 000

40 000

40 000

 45 000

45 000

Mikko Korttila

 

 5 000

10 000 

 30 000

30 000

Juha-Petri Loimovuori

10 000

40 000 

40 000 

 45 000

45 000

Raimo Mäkilä

40 000

40 000

40 000

 45 000

45 000

Minna Nissinen

25 000

25 000

25 000

 30 000

30 000

Total

220 000

255 000

260 000

355 000

355 000


The stock option rights granted under Alma Media Corporation's option programme 2006A have been used to subscribe to a total of 440,500 new Alma Media Corporation shares. For further information please refer to Stock Exchange Releases issued on May 7, 2010 and June 9, 2010.

Subscriptions made in 2010 have generated EUR 195,370 of financial benefit for the President and CEO and in total EUR 351,816 for the other members of the Group Executive Team.

Severance pay

The period of notice of the President and CEO of Alma Media Corporation, Mr Kai Telanne, is six months. Additionally, he has a director contract whereby he is entitled to a compensation corresponding to his base salary for 12 months in case he is dismissed by the employer and is not guilty of a breach of contract. In case the President and CEO resigns on his own initiative, he will not receive the compensation corresponding to the 12-month salary. It is a duty of the Board of Directors to appoint and, if required, dismiss the President and CEO.

The period of notice for the other members of Alma Media Group's Executive Team is six months. In addition, members of the Executive Team will receive a compensation corresponding to their respective base salaries for six months in case the dismissal is initiated by the employer without the managers' own fault or negligence. It is a duty of the President and CEO to appoint and, if required, dismiss the other members of the Alma Media Group Executive Team.

Pension agreements

The CEO of Alma Media Corporation and members of the Group Executive Team have a defined contribution group pension plan. Those members of the Executive Team, who have been appointed prior to the year 2008, will receive a contribution of 20% of their annual pay. Other members receive a contribution of 15% of their annual pay. The age of retirement is 60, at which time the contributions end. The pension is determined on the basis of savings accrued by the time of retirement. The beginning of the pension may be postponed no later than the age of 70. In this case, the pension is determined by the accrued savings adjusted with the value development of the investments.

The terms and conditions of the group pension plan for Alma Media's President and CEO and to other members of the Group Executive Team give the insured persons, after three-year insurance coverage, the right to receive a premium-free policy corresponding to the savings accrued until the termination of employment (paid-up policy). The paid-up policy includes old age pension after retirement age, coverage for incapacity for work and coverage in the event of death.

In 2009, the expenses related to the group pension plan for Alma Media's President and CEO totalled EUR 84,725 and EUR 233,296 for the other members of the Group Executive Team. It total, the group pension plan expenses totalled EUR 318,021 in 2010.

Kai Telanne has worked as the President and CEO of Alma Media Corporation since 2005. The curriculum vitaes of the members of the Group Executive Team include also infomation on when they have started in their current positions.