The Board of Directors appoints the President and CEO and decides on the terms of his/her employment relationship.
The remuneration and fringe benefits of President and CEO Matti Vuoria for his work as CEO in 2012 totalled EUR 757,517.10 of which EUR 219,409.20 consists of bonus, or performance pay, for 2011.
The annual bonus of the President and CEO is based on the percentage of achievement of the profit targets set by the Board of Directors. The maximum bonus for 2011 determined for Mr Vuoria by the Board of Directors was a sum corresponding to the monthly salary of 9 months. The maximum annual bonus for 2012 determined for Mr Vuoria was a sum corresponding to the monthly salary of 8 months. Of that amount, he was paid EUR 103,968, which corresponds to the achievement of the profit targets, in the spring of 2013.
President and CEO Vuoria is included in the long-term incentive scheme (section 1.3.1), the maximum remuneration of which corresponds to his monthly salary of 4 months during the incentive periods of both 2010–2012 and 2011–2013. In the spring of 2013 Vuoria was paid a bonus of EUR 77,802.72, corresponding to his achieved targets for the incentive period 2010–2012.
In the annual bonus scheme (section 1.3.3) the maximum remuneration for the President and CEO for 2013 corresponds to the sum of ten months’ monthly salary, taking into consideration the incentive coefficient, which is based on the investment result. Annual bonus for 2013 will be paid in 2014 and any bonus corresponding to the achieved targets for the long-term incentive scheme for 2011–2013 will be paid in 2014.
It has been agreed that President and CEO Vuoria will continue in his position until the end of 2013 and will retire on an old-age pension when he turns 63 in March 2014. The pension benefit under the supplementary pension insurance taken out for the CEO is 60 per cent of the pensionable salary of the supplementary pension, which is based on the annual earnings of the two middle years in the course of the last four years prior to turning 60. Since Vuoria turned 60, Varma has not paid supplementary pension contributions on his salary – only statutory TyEL contributions.
The President and CEO has a period of notice of six months, in addition to which he is entitled to severance pay equal to six months’ salary.
The deputy to the CEO is Risto Murto, Executive Vice-President of Investments. His remuneration and fringe benefits in 2012 totalled EUR 368,096.45, which includes performance pay of EUR 114,120 for 2011 under the separate scheme for Investment Operations; in addition, in 2015 he will be due to receive EUR 123,630 as a deferred bonus under this system. Under the separate scheme for Investment Operations for 2013, Murto’s maximum bonus is no more than 14 months’ worth of salary. Murto has not been included in Varma’s annual bonus scheme or in the long-term incentive scheme.
On 22 August 2013, the Board of Directors appointed Risto Murto as Varma’s President and CEO starting on 1 January 2014. His fixed monthly salary for 2014 will be EUR 43,000. Murto will be included in Varma’s annual bonus scheme and long-term incentive scheme, and in 2014 he will no longer be part of the separate scheme for Investment Operations. For 2014, the maximum annual bonus and maximum bonus to be paid under the long-term incentive scheme paid to Murto cannot exceed 12 months’ salary.
Along with his appointment as President and CEO, Murto’s retirement age will rise from the current 62 to 63. His pension benefits under supplementary pension insurance will be 60 per cent of the pensionable salary of the supplementary pension. The costs for Murto’s supplementary pension agreement amounted to EUR 77,228.65 in 2012.
Murto has a period of notice of six months, in addition to which he is entitled to severance pay equal to six months’ salary.