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Remuneration

1.5.2024

Remuneration Policy

The remuneration of Digia’s governing bodies is based on Digia Plc’s Remuneration Policy, on which shareholders made an advisory decision at the Annual General Meeting on 20 March 2024. The Remuneration Policy will be in effect until the 2028 Annual General Meeting unless the Board of Directors decides to present changes to the Remuneration Policy to a General Meeting before that date for an advisory decision.

The Remuneration Policy for Governing Bodies describes the principles of remuneration of the Board of Directors and Chief Executive Officer of Digia Plc. The Remuneration Policy is based on Directive (EU) 2017/828 on the encouragement of long-term shareholder engagement and its resulting amendments to the Finnish Limited Liability Companies Act, Securities Markets Act and Corporate Governance Code for listed companies.

More info: Stock Exchange Release 4.5.2023: New long-term share-based incentive scheme for Digia's management

Remuneration Report

The Remuneration Report offers a review of the compensation received by Digia’s Board of Directors and CEO in 2023. It also  contains a summary of Digia’s remuneration in relation to the company’s performance in 2019–2023, and information about the share-based incentive scheme for 2023–2025. The Remuneration Report has been prepared in accordance with legislation and the Corporate Governance Code 2020.

Additional information concerning remuneration

Additional information concerning remuneration describes the current principles of the remuneration of the Board of Directors, CEO and other members of the Group Management Team, and discloses the remuneration that has been paid. With respect to the other members of the Group Management Team, the information is provided at overall level. This information provided here supplements the information on the remuneration of the company’s governing bodies presented in the Remuneration Policy for the company’s governing bodies and the Remuneration Report for the fiscal year.

Board members' emoluments

Digia Plc’s Nomination Committee draws up a proposal for the emoluments to be paid to Board members and the grounds for reimbursement of expenses. The Shareholders' Meeting decides on the emoluments payable to Board members and the grounds for reimbursement of expenses.

The remuneration of the company’s Board of Directors is based on a fixed monthly fee and meeting fees. The amounts of the fees paid to each Board member depend on the role in question – chair, vice chair and member of the Board and chair and member of a committee. The company does not grant stock options or share-based remuneration for work on the Board.

The 2024 Annual General Meeting decided on the payment of monthly remunerations of EUR 3,500 to Board members, EUR 4,500 to the Vice Chair and EUR 6,000 to the Chair for their work on the Board for the duration of the term expiring at the end of the 2025 Annual General Meeting. In addition, fees of EUR 1,000 to the Chair and EUR 500 to other members are paid per each Board and Board Committee meeting. Board members will be reimbursed for ordinary and reasonable expenses resulting from Board work against an invoice.

The fees paid to Board members for the previous fiscal year are disclosed in the Remuneration Report.

Remuneration of the CEO and other members of the Group Management Team

The company’s goal is to provide a competitive and incentivising total remuneration scheme for the CEO and members of the Group Management Team. In determining remuneration, a comparison with selected comparable companies is taken into account.

Digia Plc’s Compensation Committee draws up a proposal for the CEO’s salary, emoluments and other benefits. The Compensation Committee works with the CEO to draw up a proposal for the salaries, emoluments and other benefits payable to other members of the Group Management Team. External experts and market analyses are employed whenever necessary. The Board of Directors decides on the salary, emoluments and other benefits payable to the CEO. The Remuneration Committee decides, under the authorisation of the Board of Directors, on the salaries, emoluments and other benefits payable to other members of the Group Management Team on the basis of the CEO’s proposal.

Digia has an agreement with Evli Awards Management Ltd for the coordination of the company's share-based incentive schemes, their associated share management, and the payment of incentives to individuals in accordance with the terms and conditions of the schemes.

Total remuneration for the CEO and members of the Group Management Team consists of fixed and variable components. Fixed remuneration components are all financial benefits whose monetary value is known to the parties in advance, such as annual salary and fringe benefits. Variable remuneration components include all bonuses whose monetary value is dependent on the individual’s performance or an externally determined factor, such as the performance of the company’s financial or non-financial indicators. The overall remuneration of the CEO and members of the Group Management Team consists of the following parts:

Form of remuneration Remuneration of the CEO and other members of the Group Management Team

Fixed total monthly salary (including fringe benefits)

The CEO and other members of the Group Management Team are paid a fixed monthly salary. Any fringe benefits are deducted from the total salary.

Short-term incentive (STI)

The CEO and other members of the Group Management Team are included in the incentive scheme confirmed by the company and are entitled to a performance bonus based on the achievement of annually specified targets.

Long-term incentive scheme (LTI, share-based incentive scheme)

The CEO and other members of the Group Management Team are included in the share-based incentive scheme confirmed by the company and are entitled to a potential share-based incentive payable under the scheme.

Fringe benefits

The CEO and other members of the Group Management Team are entitled to fringe benefits granted by the company universally to its employees. Executives are entitled to a full company car benefit. The value of benefits is deducted from total salary in accordance with standard practice on the taxation of benefits.

Other benefits

The CEO and other members of the Group Management Team are entitled to universal employee benefits offered by the company to its personnel.

The CEO and other members of the Group Management Team have life insurance and insurance against permanent incapacity to work.

The retirement age of the CEO and other members of the Group Management Team is stipulated by law, and none of them are covered by any separate additional pension agreements with the company.

Compensation at the end of the employment relationship

If the company terminates the CEO’s employment contract, the CEO shall be paid a total sum in the amount of the salary for twelve (12) months. The CEO may resign with six (6) months’ notice.

If the company terminates the CFO’s employment contract, the CFO shall be paid a total sum in the amount of the salary for three (3) months. The CFO may resign with three (3) months’ notice.

The term of notice for other members of the Group Management Team is three (3) months.

The indicators for variable remuneration components are tied to targets that support the company’s business strategy and promote long-term financial success and competitiveness. Variable components of short- and long-term remuneration of the CEO and other members of the Group Management Team are tied to predefined performance criteria with fixed minimum, target and maximum values.

The current remuneration of the CEO

Remuneration component Valid remuneration

Fixed total monthly salary (including fringe benefits)

EUR 27,500.00 per month

Short-term incentive (STI)

The maximum bonus corresponds to 80% of the CEO’s fixed total salary for a 12-month period

Long-term incentive scheme (LTI, share-based incentive scheme); any bonuses are paid as a combination of shares and cash. The cash component of the bonus will primarily be used to cover taxes arising from the scheme.

A maximum of 140,000 shares from the long-term incentive scheme in the years 2023–2025

Current remuneration of the Group Management Team

The remuneration of the Group Management Team in the 2024 fiscal year complies with the same principles as remuneration in 2023. The maximum bonus that can be paid to each member of the Group Management Team from the short-term incentive scheme corresponds to 60% of the person’s fixed total salary for a 12-month period. The members of the Group Management Team are included in the company’s long-term incentive scheme for the calendar years 2023–2025.

Long-term share-based incentive scheme (LTI)

On 4 May 2023, Digia Plc's Board of Directors decided to establish a new long-term share-based incentive scheme. In principle, the target group consists of the CEO and the company’s senior executives. The scheme is designed to align the goals of the company's shareholders and management in order to increase the company’s value, and to commit executive management to the company and its long-term objectives. The previous share-based incentive scheme ended on 31 December 2022.

This long-term incentive scheme covers the calendar years 2023–2025. It offers participants the chance to earn company shares on the basis of targets set by the Board of Directors for the three-year bonus period. These targets are based on the company's net sales, cumulative earnings per share (EPS) for 2023-2025, and sustainability objective. The earnings period for indicators is three years (2023–2025), and the targets for all indicators have been set for the final date of the earnings period.

During the bonus period, the company’s CEO and other scheme participants are entitled to a bonus equivalent to a maximum of 480,000 new Digia Plc shares. If the terms are met, the bonuses for all indicators based on the new scheme will be paid at the end of the reward period in spring 2026. All bonuses under this scheme will be paid as a combination of shares and cash. The cash component of the bonus will primarily be used to cover taxes and other comparable costs arising from the scheme.

As a rule, the bonus will not be paid if a member resigns or if a member’s employment or post is terminated prior to the bonus payment date specified in the incentive scheme. Under certain conditions, the Board may, at its discretion, decide on possible bonuses in accordance with the pro-rata principle.

Short-term incentive scheme (STI) - 2024 fiscal year

The short-term incentive scheme for the CEO and members of the Group Management Team for the 2024 fiscal year corresponds to the incentive scheme for 2023 in terms of structure and principles.

The earnings criteria of the incentive scheme in 2024 are based on the company’s net sales and operating profit (EBITA) as well as customer and employee experience targets. The targets for net sales and operating profit are for the calendar year. Mid-term assessments and payments will be made in August after the first half of the year (January–June) in accordance with the targets set for January–June 2024. With respect to the targets for net sales and operating profit, the bonus paid for January–June 2024 is an advance; that sum, if any, will be deducted from the bonus assessed for the full calendar year that will be paid in February 2025. The targets for customer satisfaction and employee experience are annual level targets; the realisation of the customer satisfaction target is assessed at the end of the first half-year period (January–June) and the realisation of the employee experience target at the end of the second half-year period (July–December).

All bonus indicators are assessed independently of each other, but if the full-year operating profit had fallen short of the set EBITA threshold value, the incentive assessed at the end of the year would not have been paid.

Salaries and remuneration paid to the CEO and other executives in 2023

  Fixed total monthly salary (including fringe benefits) Short-term incentive (STI) LTI, share-based incentive scheme*
CEO EUR 325,065 EUR 124,697

EUR 531,251

Bonus from the 2020–2022 long-term incentive scheme

Other members of the Group Management Team EUR 1,403,460 EUR 396,436

EUR 761,586

Bonus from the 2020–2022 long-term incentive scheme

*Any bonuses are paid as a 50/50 combination of shares and cash. The cash component of the bonus will primarily be used to cover taxes arising from the scheme.

Salaries and remuneration paid to the CEO and other executives in 2022

  Fixed total monthly salary (including fringe benefits) Short-term incentive (STI) LTI, share-based incentive scheme*
CEO EUR 302,583.80 EUR 66,548.80 No payments in 2022
Other members of the Group Management Team EUR 1,321,883.00 EUR 201,372.00 No payments in 2022

*Any bonuses are paid as a 50/50 combination of shares and cash. The cash component of the bonus will primarily be used to cover taxes arising from the scheme.

Salaries and remuneration paid to the CEO and other executives in 2021

  Fixed total monthly salary (including fringe benefits) Short-term incentive (STI) LTI, share-based incentive scheme*
CEO EUR 301,548.00 EUR 126,212.00 No payments in 2022
Other members of the Group Management Team EUR 1,245,414.51 EUR 351,361.41 No payments in 2022

*Any bonuses are paid as a 50/50 combination of shares and cash. The cash component of the bonus will primarily be used to cover taxes arising from the scheme.

Salaries and remuneration paid to the CEO and other executives in 2020

  Fixed total monthly salary (including fringe benefits) Short-term incentive (STI) LTI, share-based incentive scheme*
CEO EUR 295,702.00 EUR 120,616.00

EUR 409,930.55

Bonus from the 2017–2019 long-term incentive scheme
Other members of the Group Management Team EUR 1,276,002.54 EUR 360,642.24 (including target bonuses earned for 7–12/2019 and 1–6/2020)

EUR 632,650.71

Bonus from the 2017–2019 long-term incentive scheme

*Any bonuses are paid as a 50/50 combination of shares and cash. The cash component of the bonus will primarily be used to cover taxes arising from the scheme.