Salaries and other compensation
Board of Directors Compensation
The Annual General Meeting decides on the remuneration paid to the members of the Board. The Annual General Meeting decided in March 2007 that the annual remuneration is as follows: Chairman EUR 80,000, Vice Chairman EUR 50,000, and other members EUR 40,000.
40% of the annual remuneration is being paid in the form of the company’s shares and 60% in cash. A member of the Board is not allowed to sell or transfer any of these shares to any third party during the term of their respective Board membership. However, this limitation is only valid for five years at the most after the acquisition of the shares. No additional remuneration is paid for attendance in meetings and committees.
In 2007, the members of the Board of Directors were paid total compensation of EUR 0.290 million, of which EUR 0.174 million was in cash.
The following shares were transferred in 2007:
- Anssi Vanjoki, 1,970 shares
- Ilkka Brotherus, 1,231 shares
- Felix Björklund, 985 shares
- Tuomo Lähdesmäki 985 shares
- Timo Maasilta, 985 shares
The President and CEO is not paid an emolument for his work as a member of the Board.
The annual remuneration paid to the members of the Board was approved in the Annual General Meeting in 2008 as follows: Chairman EUR 80,000, Vice Chairman EUR 50,000 and other members EUR 40,000. 40% of the annual remuneration is being paid in the form of the Company’s shares and 60% in cash. A member of the Board is not allowed to sell or transfer any of these shares to any third party during the term of his or her respective Board membership. However, this limitation is only valid for five years after the acquisition of the shares at most. The President of Amer Sports Corporation does not receive any additional remuneration in respect of his Board membership.
Management salaries and compensation
The salaries and compensation paid to the President and his immediate subordinates are decided by the Board of Directors. The Board’s Compensation Committee is responsible for preparing proposals for the incentive system. No separate compensation is paid to management members for their participation in management bodies.
In 2007, the management incentive system consisted of the following components:
- An annual incentive system for key executives, which is tied to achievement of a business area’s strategy and annual plan. The purpose of the annual incentive program is to drive the company’s growth and profitability and to support the realization of company strategy. The annual incentive system is the most extensive incentive system in terms of personnel covered.
- Long-term incentive programs for key executives:
- Stock option programs designed to support the achievement of long-term strategic objectives and to build shareholder value. The number of people in management and expert tasks within Amer Sports and its subsidiaries who came within the scope of stock options at the end of 2007 was 12 under the 2003 program, 14 under the 2004 program, 9 under the 2005 program and 10 under new 2007 program.
- A deferred cash incentive program that seeks to elicit commitment from key executives. The program encourages the achievement of the annual plan. Its result is tied to the three-year trend in shareholder value. At the end of 2007, 88 members in management tasks at subsidiaries came within the scope of the program.
- A share-based incentive plan for key executives was established in 2007.
The salaries, benefits and other compensation paid to the members of the Amer Sports Board of Directors, the President and CEO and the Executive Board amounted to approximately EUR 4.77 million in 2007.
Total compensation paid to the President and CEO in 2007 was EUR 1.1 million, of which incentives tied to profits and other objectives accounted for EUR 0.4 million.
Salaries, benefits and other compensation paid to the other members of the Amer Sports Executive Board totaled EUR 3.4 million, of which incentives amounted to EUR 0.8 million.
The Amer Sports warrant programs for the years 2003, 2004, 2005 and 2007.
- At the end of 2007, the President and CEO held warrants entitling him to a total of 350,550 shares. Of these, 150,000 under the 2003 program and 200,550 under the 2004 program.
- Apart from the President, the members of the Amer Sports Board of Directors do not come within the scope of the warrant programs.
CEO’s executive agreement
The terms and conditions of the President and CEO’s employment are defined in a written executive agreement that has been approved by the Board of Directors. Under the agreement, the President can take early retirement at the age of 60, with pension payable at a 60 percent salary rate. The other Board of Directors members do not have pension agreements with the company.
The President and CEO’s period of notice is six months on both the company’s and the President’s side. Should Amer Sports give the President notice, he is to be paid salary for the duration of the notice period and severance pay of 24 months’ fixed salary.
Share-based incentive plan
Amer Sports Corporation’s Board of Directors decided on January 14, 2007 to establish a new share-based incentive plan for the Group’s key personnel. The Plan’s reward will be paid in 2008 in part as Company shares and partially in cash. The cash payment will cover taxes and tax-related costs arising from the reward. Of the shares, 25% will be transferable as of April 2010, 25% as of April 2011, and 50% as of April 2012. The rewards to be paid based on this plan will correspond to a maximum value of approximately 400,000 Amer Sports Corporation shares. At the end of the financial year the plan covered 30 people.
Compensation of auditors
In 2007, Amer Sports paid PricewaterhouseCoopers total fees of approximately EUR 2.5 million worldwide. Approximately EUR 1.9 million of this sum was for the statutory audit. About EUR 0.6 million was spent on other services.