President and CEO Mikko Helander’s personal remuneration, other financial benefits, performance bonus scheme criteria and performance bonuses paid are decided by Kesko's Board of Directors based on the Remuneration Committee's preparatory work. A written managing director's service contract, approved by the Board, is in force between the Company and the President and CEO. Helander has been the Company’s President and CEO and the Chairman of the Group Management Board since 1 January 2015.
Salaries, performance bonuses and fringe benefits are reported on a cash basis. The 2016 earnings on accrual basis are calculated by adding the amount of performance bonus paid in 2017 to the salaries and fringe benefits for 2016.
The salaries, fringe benefits, performance bonuses and other financial benefits paid to Helander in 2016-2017 are depicted below.
In 2017, €1,398,030, or a total of 16,086 shares (maximum amount 21,000 shares), was paid as share award based on the 2016 performance period. The commitment period for share awards granted for the 2016 performance period will end on 31 Dec. 2019.
In 2016, €857,255, or a total of 11,214 shares (maximum amount 21,000 shares), was paid based on the 2015 performance period.
The euro value of the share awards paid in 2017 and 2016 has been calculated using the trade-weighted average share price on the date of assignment. The share awards paid have been net share awards, in addition to which a cash component has been paid to cover the taxes and tax-like charges. The share award euro amounts depicted in the table comprise the combined total of the net value of the shares and the cash component.
For the 2017 performance period, the President and CEO will be paid a share award corresponding to 17,746 shares by the end of April 2018 (Board decision on 31 Jan. 2018). The share award to be paid is a gross share award, from which the applicable withholding tax is deducted and the remaining net amount is paid in shares. The maximum amount of share award to be paid for the 2017 performance period was determined at a total of 38,000 shares. The commitment period for share awards granted for the 2017 performance period will end on 10 Feb. 2021.
President and CEO Mikko Helander’s old-age retirement age has been agreed to be 63. The amount of old-age pension has been agreed to be 60% of the President and CEO's pensionable earnings in accordance with the Employees' Pensions Act (TyEL) for the ten (10) calendar years preceding the retirement. The pension is based on a defined benefit plan.
Period of notice and termination benefit for President and CEO
The period of notice for the President and CEO is twelve (12) months if the managing director’s service contract is terminated by the Company and six (6) months if Helander resigns. If the Company terminates the contract for a reason other than a material breach of contract by the managing director, and the managing director does not retire on an old-age pension or some other pension, the managing director is paid, in addition to the salary for the period of notice, a compensation corresponding to the combined amount of 12 months' monetary salary and fringe benefits.
A health insurance, life insurance and leisure travel insurance have been taken out for Helander.