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.

Remuneration and other financial benefits of the Board of Directors

Amer Sports shareholders determine the amount of compensation to be paid to members of Amer Sports’ Board of  Directors at the Annual General Meeting of shareholders. The Annual General Meeting of shareholders of Amer Sports 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 budgeted for the members of the Board of Directors, including the Chairman of the Board of Directors and the Vice Chairman, will be used to acquire Amer Sports shares to the account of each member of the Board of Directors.

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.

The number of shares granted to the Board of Directors as remuneration

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

Total rewarding principles and remuneration of the President and CEO and other executives

The Amer Sports total rewarding principles are derived from the Company’s Pay for Performance philosophy and are closely linked to targeted business success as well as financial and personal performance. The principles of the total rewarding 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’s strategy and long-term financial targets and these targets are cascaded to the Business Area, team and individual level based on Coaching for Success. The 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.

The components of total rewarding are:

  1. Base pay
  2. Benefits
  3. Annual incentives and
  4. Long-term incentives

Base pay forms the basic element of compensation and takes into account particularly the content and demands of the role. Amer Sports conducts merit reviews annually in accordance with the Pay for Performance philosophy.

Benefits are part of Amer Sports total rewarding and the principles follow local practices, which consists of taxable and non-taxable benefits. Examples of common benefits are health care and mobile phone.

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

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. The long-term incentives have a strategic focus at the Group level and the earnings opportunity is linked to the company’s financial performance criteria and Amer Sports share price development. A limited number of executives and key players participate in long-term incentive programs, with participants being 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.

Amer Sports key principles for incentive programs

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

The Board of Directors determines the salaries and compensation which is paid to the President and CEO and his immediate subordinates. The Compensation Committee is responsible for preparing the proposals for the CEO’s and his immediate subordinates’ salaries and the executive’s incentive system. In all remuneration decisions, Amer Sports follows the manager’s manager principle of approval.

Pensions

Executives in Finland participate in the standard statutory Finnish pension system called 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 that apply in the countries where they are employed.

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 salaries and compensation which is paid to the President and CEO. He is eligible to participate in Amer Sports Corporation’s Executive annual incentive program. The Board of Directors decides on the President and CEO’s annual incentive target setting and makes the achievement review.

The President and CEO participates in the Performance Share Plan 2013 and in the Restricted Stock Plan 2013. The received shares are under transfer restrictions as per the plans’ terms and conditions.

In 2014, The President and CEO received in total 35,710 shares from Company’s long-term incentive Plans. From Performance Share Plan 2013 earning year 2013 he received 18,210 shares and earning years 2011–2013 he received 7,500 shares. From Restricted Stock Plan 2013 earning year 2013 he received 10,000 shares.

In 2015, The President and CEO received in total 21,224 shares from Company’s long-term incentive Plans. From Performance Share Plan 2013 earning year 2014 he received 5,724 shares and earning years 2012–2014 he received 7,500 shares. From Restricted Stock Plan 2013 earning year 2013 he received 8,000 shares.

The President and CEO participates in the Performance Share Plan 2013 earning year 2015 and earning years 2015– 2017, and Restricted Stock Plan 2013 earning year 2015.

In 2015, salaries and incentives paid to the President and CEO Heikki Takala amounted to EUR 1.0 million, of which incentives totaled EUR 0.3 million. In addition, cumulative long-term incentive related expenses were paid from 2013–2014 and amounted to EUR 0.5 million.

Salaries, benefits and other compensation paid to the President and CEO up to December 31, 2015

  Salaries Annual incentive,*, ** Long-term incentives**
President and CEO  682,397  315,575 458,659

* Paid in 2015, based on 2014 achievements
** In addition, EUR 0.5 million cumulative expenses from 2013-2014

Salaries and other compensation paid in 2015 to the members of the Executive Board

Salaries, benefits and other compensation paid to the President and CEO and the members of the Executive Board in 2015 totaled EUR 11.8 million. Salaries, benefits and other compensation paid to the members of the Executive Board (excluding President and CEO) totaled EUR 9.8 million, of which incentives totaled EUR 5.8 million. No separate compensation is paid to the members of the Executive Board for their participation in any management bodies.

The annual incentives paid to the members of the Executive Board in 2015 were based on the results of the calendar year 2014. The annual incentive target elements for all the members of the Executive Board 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 their responsibility areas’ strategic role in the Group. The President and CEO and members of the Executive Board also have a portion of incentive reward based on personal objectives, which are directly derived from the Group’s strategy.

Salaries and other compensation paid to the members of the Executive Board up to December 31, 2015 (EUR), excluding President and CEO

   Salaries Annual incentive* Long-term incentives*
Members of the Executive Board** 3,982,478 1,078,389 4,682,436

* Paid in 2015, based on 2014 achievements
** Excludes President and CEO; Andy Towne left on 23rd September, 2015;
Heikki Norta joined on 22nd October, 2015

Shareholding at December 31, 2015

 
Shares
Members of the Board of Directors 2,785,722
President and CEO 171,069
Executive Board  619,707
Total 3,576,498