Remuneration

Amer Sports strategy provides a clear direction to the  Company’s total reward principles, which are closely linked to  targeted business success as well as financial and personal  performance. The aim of total rewarding is to drive business success through programs that attract, motivate, reward and retain good and high performers.

DECISION-MAKING PROCEDURE CONCERNING REMUNERATION

The remuneration of the members of the Board of Directors is decided by the Annual General Meeting based on the proposal prepared by the Board of Directors’ Nomination Committee. The Board of Directors resolves on the remuneration of the President and CEO based on the proposal by the Board of Directors’ Compensation and Human Resources Committee. The Board of Directors also resolves on the remuneration of the members of the Executive Board. The President and CEO prepares a proposal to the Compensation and Human Resources Committee, which presents a proposal to the Board of Directors for resolution.
 
In all remuneration decisions Amer Sports follows two level review and approval, whereby the line manager’s proposal is followed by the second level manager’s review and approval.
 

Main principles of remuneration

Members of the Board of Directors

Amer Sports shareholders determine the amount of compensation to be paid to members of Amer Sports’ Board of Directors, which is disclosed at the Annual General Meeting of shareholders. The Annual General Meeting held on March 8, 2016 resolved that the remuneration of the Board of Directors shall be as follows: Chairman of the Board of Directors will be paid an annual remuneration of EUR 120,000, the Vice Chairman EUR 70,000 and other members of the Board of Directors EUR 60,000 each.
 
According to the resolution of the Annual General Meeting, 40 percent of the annual remuneration of the members of the Board of Directors, including the Chairman and the Vice Chairman, will be paid in Amer Sports shares. A member of the Board of Directors is not permitted to sell or transfer any of these shares during the term of his or her Board membership. However, this limitation is valid for a maximum of five years after the acquisition of the shares.
 

President and CEO and Executive Board members

Amer Sports Total Reward principles are derived from the company’s Pay for Performance philosophy and they are closely linked to targeted business success as well as financial and personal performance. The principles of the Total Reward and Pay for Performance philosophy apply to all Amer Sports employees and are closely linked to Amer Sports performance management process called Coaching for Success. Annual targets are derived from the Group strategy and long-term financial targets. These targets are cascaded to the Business Areas as well as team and individual level through the Coaching for Success process. Individual performance is evaluated during an annual performance discussion. In the case of the President and CEO, the performance is evaluated by the Board of Directors. Key compensation elements of CEO and President and other Members of Executive Board are presented in the table below.
 
Element Payable in Payable on the basis of Time of payment/earning
Base pay Cash Executive contract Monthly
Benefits Health care and mobile phone, among others Executive contract Monthly
Annual incentives Cash Executive Annual Incentive Plan Annually
Long-term incentives Shares and cash Performance Share Plan
Restricted Stock Plan
Annual nomination following a three-year earning period
 
Base pay forms the basic element of compensation and takes into account particularly the content and demands of the role and individual performance, which is evaluated in Coaching for Success. Amer Sports conducts salary reviews in annual Merit Review process.
 
Benefits are also an important part of Amer Sports Total Rewards. Benefits follow local legislation and market practices. Examples of common benefits are health care and mobile phone.

Pensions

Executives in Finland participate in the standard statutory Finnish pension system TyEL. According to this statutory pension system, base pay, taxable benefits and annual incentives represent pensionable earnings. Executives located outside of Finland participate in the local pension systems of the countries where they are employed.

Incentives

A. Ensure performance targets are in line with agreed financial targets and differences in roles of and target setting in Business Areas
C. Pay for performance: emphasis on sustainable fundamentals and improvement
D. Reward for longer term achievements, and emphasize more on achieving long-term business aspirations of of Amer Sports.
D. Prioritize Group level target achievement

Annual Incentives

Amer Sports’ cash-based annual Incentive programs drive the company’s strategy, financial targets and development programs in the short term. Annual Incentive programs are based on the Group and Business Area strategy. Annual incentives reward employees for achieving business success through the company’s financial targets and key performance indicators as well as reaching personal targets. Participation in an annual incentive program is role-dependent and covers the majority of Amer Sports employees.

Maximum Annual Incentive

President and CEO 130% of annual Base pay
Executive Board members 60-75% of annual Base pay
 

Long-Term Incentives

The long-term incentive programs, which are share and cash-based, drive Amer Sports strategy execution and reaching the financial targets in the long term. Long-term incentives have a strategic focus at the Group level, and the earnings opportunity is linked to Amer Sports’ financial performance and share price development. A limited number of executives and key players participate in long-term incentive programs. The participants are nominated by the President and CEO, reviewed and proposed to the Board of Directors by the Compensation and HR Committee and approved by the Board of Directors. Long-term incentive programs are governed by the Board of Directors.
 
At December 17, 2015, the Board of Directors approved two share-based incentive plans, Performance Share Plan 2016 and Restricted Stock Plan 2016. Both plans have three earning and nomination years; 2016, 2017 and 2018.
 

Performance Share Plan 2016

The aim of the Performance Share Plan is to combine the objectives of shareholders and key personnel in order to increase the value of the company, to commit key personnel to the company, and to offer them competitive reward plans based on holding the company shares.
 
The Performance Share Plan includes six (6) earning periods; calendar years 2016, 2017 and 2018 and calendar years 2016–2018, 2017–2019 and 2018–2020. The Board of Directors will decide on the earnings criteria, targets and participants at the beginning of each earning period. The potential reward from the plan for the earning period 2016 is based on the Group’s Earnings before Interest and Taxes (EBIT), and the Net Sales and the potential reward for the earning period 2016–2018 will be based on the Group’s Total Shareholder Return (TSR).
 
Key personnel must acquire company shares as a prerequisite for participating in the plan. Key personnel will be entitled to receive shares as a reward for fulfilling this prerequisite.
 
The potential rewards from the earning periods will be paid partly in company shares and partly in cash. The cash payment equals taxes and tax-related costs arising from the reward to the key person. The shares paid from the earning periods 2016, 2017 and 2018 may not be transferred during the restriction periods, which will end on 31 December 2018, on 31 December 2019 and on 31 December 2020.
 
In addition to the Plan’s restriction periods, members ofthe Group Executive Board must hold 50% of the shares theyreceive on the basis of incentive plans as long as the value ofthe shares held by the member of the Executive Board in total corresponds to the person’s annual gross salary. The Performance Share Plan is directed to approximately 300 people, including the members of the Executive Board.
 
The amount of net rewards to be paid on the basis of the Performance Share Plan will be a maximum total of 1,100,000 Amer Sports Corporation shares. A description of the Performance Share Plan 2013 is available under section Long-term Incentive Plan under restriction period.

 

Restricted Stock Plan 2016

The aim of the Restricted Stock Plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the company, to commit the key personnel to the company, and to offer them competitive reward plans based on holding the company shares.
 
The Restricted Stock Plan includes three earning periods; calendar years 2016, 2017 and 2018. The potential reward is based on the continuation of employment. The Board of Directors decides on the participants at the beginning of each earning period. The potential reward from the earning periods will be paid partly in company shares and partly in cash. The cash payment equals to taxes and tax-related costs arising from the rewards to the key personnel. The shares may not be transferred during the restriction periods, which will end on 31 December 2018, 31 December 2019 and 31 December 2020.
 
In addition to the Plan’s restriction periods, the members of the Group Executive Board must hold 50% of the shares they receive on the basis of incentive plans as long as the value of the shares held by the member of the Executive Board in total corresponds to the person’s annual gross salary. The Restricted Stock Plan is directed to approximately 60 people, including the members of the Group Executive Board.
 
The amount of net rewards to be paid on the basis of the Restricted Stock Plan will be a maximum total of 200,000 Amer Sports Corporation shares.
 

Remuneration report

Board of Directors

On June 17, 2016, the members of the Board of Directors together received annual remuneration totaling EUR 550,000, of which EUR 219,944 was paid in shares. The members of the Board of Directors received the following compensation:

  Cash payment in Euros
Number of shares
Total in Euros
Ilkka Brotherus 42,018.54 1,060 70,000
Martin Burkhalter 36,004.67 909 60,000
Christian Fischer 36,004.67 909 60,000
Hannu Ryöppönen 36,004.67 909 60,000
Bruno Sälzer 36,004.67 909 60,000
Lisbeth Valther 36,004.67 909 60,000
Anssi Vanjoki 72,009.34 1,818 120,000
Indra Åsander 36,004.67 909 60,000
Total 330,056.01 8,332 550,000

 

Performance Share Plans PSP 2013 PSP 2014 PSP 2015 PSP 2016
Number of participants 69 178 209 269
Actual achievements 61,4% 31,8% 31,4%
Max. number of shares to be delivered        
  to the President & CEO 15,350 5,724 5,644 12,000
  to other members of EXB 65,246 22,561 22,704 60,000
  to other key individuals 89,794 58,809 68,707 173,832
Total max. number of shares to be delivered* 170,390 87,09 97,055 245,832
Share delivery (year) 2014 2015 2016 2017
End of restriction period 2015 2016 2017 2018
Earning criteria (weighting)
EBIT (50%)
Net Sales (50%
EBIT (50%)
Net Sales (50%
EBIT (50%)
Net Sales (50%
EBIT (50%)
Net Sales (50%
*PSP 2013, PSP 2014 and PSP 2015 actual share delivery based on achievement
 
 
Total Shareholder Return Plans TSR 2013-2015 TSR 2014-2016 TSR 2015-2017 TSR 2016-2018
Number of participants 66 176 209 269
Actual achievements 100%
Max. number of shares to be delivered*        
  to the President & CEO 5,000 4,500 4,500 3,000
  to other members of EXB 21,250 16,600 18,100 15,000
  to other key individuals 27,240 45,490 54,800 43,458
Total max. number of shares to be delivered 53,490 66,790 77,400 61,458
Share delivery (year) 2016 2017 2018 2019
End of restriction period 2015 2016 2017 2018
Earning criteria (weighting)
Total Shareholder
Return (100%)
Total Shareholder
Return (100%)
Total Shareholder
Return (100%)
Total Shareholder
Return (100%)

President and CEO

Heikki Takala is the President and CEO of Amer Sports as of April 1, 2010. The terms and conditions of employment that apply to the company’s President and CEO have been approved by the Board of Directors and are defined in a written executive agreement. Termination of President and CEO’s written executive agreement requires six (6) months’ notice on both sides. Should the company terminate the President and CEO’s appointment, a severance payment equaling twelve (12) months of total annual gross salary is payable. The President and CEO participates in the standard local statutory pension system and can retire at the age of 65.
 
The Board of Directors determines the salary and other rewards which are paid to the President and CEO. He is eligible to participate in Amer Sports Corporation’s Executive Annual Incentive Plan and Long-Term Incentive Plans. The Board of Directors decides on the President and CEO’s Executive Annual Incentive Plan target setting, reviews and approves the achievements and nominates and allocates shares to Performance Share Plan and Restricted Stock Plan.

Remuneration of President and CEO, Euros

  2016 2015
Salaries* 677,541 682,397
Other payments ** 430,800 530,730
Incentives 593,648 315,575
Long-term incentives 497,543 458,649
Total 2,199,532 1,987,35

* Change in salary due to currency conversions
** Cumulative expenses from 2014-2015 and 2013-2014

Members of the Executive Board

The annual salaries and other remuneration elements paid to Executive Board members (excluding the President and CEO) in 2016 are presented in the table below.
 
The annual incentives paid to the Executive Board members in 2016 were based on the results of the calendar year 2015. The annual incentive target elements for all Executive Board members were Group’s Earnings Before Interest and Taxes (EBIT), Net Sales and Cash Flow. In addition to the Group’s targets, the Business Area Presidents and the Regional General Managers were rewarded for their respective Business Areas’ Earnings Before Interest and Taxes (EBIT), Net Sales and Gross Margin improvement, in line with the strategic role of their respective responsibility. The President and CEO and members of the Executive Board also have a part of their incentive targets based on personal objectives, which are directly derived from the Group’s strategy.

Remuneration of Executive Board members (excl. President and CEO), Euros

  2016 2015
Salaries 3,549,26 3,982,478
Other payments* 968,65 47,320
Annual incentives 1,327,622 1,078,389
Long-term incentives 5,801,620 4,682,436
Total 11,647,15 9,790,622

*Cumulative expenses from 2014–2015 and 2013–2014

 
 
Restricted Stock Plans RS 2013 RS 2014 RS 2015 RS 2016
Number of participants 47 53 57 63
Max. number of shares to be delivered        
  to the President & CEO 10,000 8,000 8,000 5,600
  to other members of EXB 36,500 30,167 32,500 23,700
  to other key individuals 27,000 29,200 31,700 28,400
Total max. number of shares to be delivere 73,500 67,367 72,200 57,700
Share delivery (year) 2014 2015 2016 2017
End of restriction period 2015 2016 2017 2018

*RS 2013, RS 2014 and RS 2015 actual share delivery

Shareholding at December 31, 2016

Shareholdings of the Board of Directors, President and CEO and other Executive Board members at the end of year 2016 are presented in the table below:
 
 
2016
2015
Board of Directors 2,794,899 2,785,722
President and CEO 191,269 171,069
Executive Board 422,805  619,707
Total 3,408,973 3,576,498
 

LONG-TERM INCENTIVE PLAN UNDER RESTRICTION PERIOD

Performance Share Plan 2013

At December 14, 2012, the Board of Directors approved a share-based incentive plan for the Group’s key personnel. The aim of the plan is to combine the objectives of shareholdersand key personnel in order to increase the value of the company, to commit key personnel to the company, and to offer key personnel competitive reward plans based on holding the company shares. The plan rewards the key personnel for short-term financial targets achievement and at the same time for long-term shareholder value and commitment.
 
At December 19, 2013, the Board of Directors approved amendments to the Performance Share Plan 2013 for the remaining earning years. The number of employees included in
the Performance Share Plan was extended from approximately 80 to 200 persons, and the amount of net rewards to be paid on the basis of the Performance Share Plan was increased from a maximum total of 1,200,000 to a maximum total of 1,400,000 Amer Sports Corporation shares.
 
The Performance Share Plan 2013 includes six earning periods; calendar years 2013, 2014 and 2015 and calendar years 2013–2015, 2014–2016 and 2015–2017. At the beginning of each earning period, the Board of Directors decides on the earnings criteria and targets for each earning period. Rewards from the plan for the earning periods 2013, 2014 and 2015 were based on the Group’s Earnings Before Interest and Taxes (EBIT) and Net Sales and potential rewards based on the Group’s Total Shareholder Return (TSR) for the earning periods 2013–2015, 2014–2016 and 2015–2017. For the ongoing earning periods, the weighting for the EBIT and Net Sales totals 80% and TSR 20%.
 
A prerequisite for participation by the key personnel in the plan and for receiving rewards on the basis of the plan is that they acquire Amer Sports Corporation shares. Potential rewards from the earning periods will be paid partly in company shares and partly in cash. Cash payments will equal taxes and tax-related costs, which arise from the rewards to the key personnel. Shares awarded in connection with the earning periods 2013, 2014 and 2015 may not be transferred during the restriction periods, which ended at December 31, 2015, and will end at December 31, 2016 and December 31, 2017. The amount of net rewards to be paid on the basis of the Performance Share Plan will be a maximum total of 1,400,000 Amer Sports Corporation shares. Prior to the amendment decision at December 19, 2013, the amount of net rewards to be paid on the basis of the Performance Share Plan was a maximum total of 1,200,000 Amer Sports Corporation shares.
 
In addition to the Plan’s restriction periods, members of the Executive Board must hold 50% of the shares they receive on the basis of incentive plans as long as the value of the shares held by the member of the Executive Board in total corresponds to the person’s annual gross salary.
 
The Performance Share Plan is directed at approximately 200 people, including the members of the Executive Board.
 

Restricted Stock Plan 2013

At December 14, 2012, the Board of Directors approved another share-based incentive plan for the Group’s key personnel. The aim of the plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the company, to commit the key personnel to the company, and to offer them competitive reward plans based on holding the company shares.
 
The Restricted Stock Plan includes three earning periods; calendar years 2013, 2014 and 2015. Potential rewards will be based on continuation of employment. Potential rewards from the earning periods will be paid partly as the company’s shares and partly in cash. Cash payments will equal taxes and tax-related costs incurring as a result of receiving a reward. Shares may not be transferred during the restriction periods, which ended at December 31, 2015, and will end at December 31, 2016 and December 31, 2017 respectively. The amount of net rewards to be paid on the basis of the Restricted Stock Plan will be a maximum total of 300,000 Amer Sports Corporation shares.
 
In addition to the Plan’s restriction periods, the members of the Executive Board must hold 50% of the shares they receive on the basis of incentive plans as long as the value of the shares held by the member of the Executive Board in total corresponds to his/her annual gross salary.