Fair and incentivizing compensation to all employees is an important factor in Sampo Group’s ability to enhance shareholder value in a competitive business environment. Compensation is an equally important determinant of success in the competition for talent. Sampo's compensation strategy is responsible both towards the employees and the shareholders and, consequently, long-term financial stability and value creation of the Group guides the design of compensation schemes.
Sampo plc's Board of Directors has approved common Compensation Principles applicable to all companies within Sampo Group.
Salary and Remuneration Report
Sampo has published a Salary and Remuneration Report on its website in accordance with section 7 (Remuneration) of the Corporate Governance Code.
Compensation of the Members of the Board of Directors
According to Sampo's Articles of Association, the Annual General Meeting decides on the compensation of the members of the Board of Directors.
In accordance with the decision of the Annual General Meeting in 2011, the following annual fees will be paid to the members of the Board of Directors for their Board and committee work up to the close of the Annual General Meeting in 2012: EUR 160,000 to the Chairman, EUR 100,000 to the Vice Chairman, and EUR 80,000 to the other members of the Board, with 50 per cent of each Board member's fee being paid, after taxes and corresponding charges, in Sampo A shares and the rest in cash. Board members employed by the company will not receive separate compensation for Board work during the validity of the employment or service relationship.
Members of the Board of Directors have not received any other benefits, nor do they participate in Sampo's incentive systems.
Compensation of the Managing Director and Other Executives
The Board of Directors decides on the terms of employment and compensation of the Group CEO and other executives on the Sampo Group Executive Committee, on the basis of a proposal by the Nomination and Compensation Committee. However, the Nomination and Compensation Committee can decide, upon authorization by the Board of Directors, on the salaries of the members of the Group Executive Committee, excluding the Group CEO and Deputy CEO.
Principles of the Compensation System
In addition to receiving monthly salaries, executives who are members of the Group Executive Committee are participants in the Group's short-term variable compensation system, which is decided upon separately each year. The short-term variable compensation is determined on the basis of the Group result, the business area result and individual performance. The maximum amount that can be paid for 2011 to members of the Executive Committee is an amount corresponding to nine months' fixed salary.
The members of the Group Executive Committee are also participants in the long-term incentive systems 2009 I and 2011 I for Sampo's management. The terms of the incentive systems are available on Sampo's website.
Based on his employment contract, the Group CEO will be paid a fixed monthly salary and a yearly short-term variable compensation, which may be no more than an amount corresponding to nine months' fixed salary. The Group CEO is also a participant in the long term incentive systems 2009 I and 2011 I for Sampo's management.
Mr. Kari Stadigh is the CEO of Sampo Group. For year 2011 the Group CEO was paid EUR 782,942 in fixed salary and EUR 216,233 in short term variable compensation and EUR 566,400 in long-term variable compensation, together totalling EUR 1,565,575.
The members of the Group Executive Committee are each covered by the employment pension system of their country of residence. Under the terms of their employment contracts, the majority of them are also covered by supplementary pension schemes. The retirement age for the Committee's members as set out in their contracts is 60, 65 or the age laid down in the employment pension system of their country of residence.
More detailed information on compensation in Sampo Group during 2011 is available at the Salary and Remuneration Report published by Sampo.