Year 2018

Consolidated Financial Statements (IFRS)

Parent Company Financial Statements (FAS)

Remuneration Report

Remuneration Report describes the decision-making procedure and main principles of remuneration of members of the Board of Directors, CEO and the Executive Team and contains information on the remuneration paid in 2018.

Management of compensation

The Annual General Meeting, held on March 15, 2016, decided to establish a permanent Shareholders' Nomination Board. The Nomination Board shall be responsible for preparing and presenting proposals covering the remuneration of members of the company’s Board of Directors to Annual General Meeting and, where needed, to an Extraordinary General Meeting.

The Board of Directors has in its meeting on March 15, 2018 decided to establish a Remuneration Committee. The Remuneration Committee will prepare the nomination of the CEO and shall identify successor candidates. The Committee further discusses with CEO and gives guidance on Executive Team member appointments succession. The Committee evaluates the activities of CEO and Executive Team, prepares salaries and other benefits of the company’s CEO, gives guidance to CEO on Executive Team members salaries and benefits and overall prepares matters concerning the company’s compensation schemes, long-term incentive schemes, including planning of share-based, option-based and other incentive schemes.

The compensation principles of the top management are decided by the Board. The Board decides on the service terms and conditions of the CEO, specified in writing. The Board annually approves the personnel incentive scheme.

Remuneration of the Board of Directors

The General Meeting decides on the remuneration paid to the Board of Directors.

The Annual General Meeting resolved on March 15, 2018, to compensate the members of the Board according to the following:

  • members of the Board of Directors and committee members EUR 31,350 per year;
  • Vice Chairman of the Board of Directors and the Chairman of the Audit Committee EUR 36,480 per year and
  • Chairman of the Board of Directors EUR 62,700 per year.

In addition, Chairmen of the Board of Directors and its committees shall receive EUR 855 per attended meeting and members of the Board of Directors and its committees EUR 570 per attended meeting. Further, a member of Board of Directors or a committee member, whose travel to the Board or committee meeting requires international travel time of over 6 hours but less than 12 hours, shall be paid an additional remuneration of EUR 1,000 per attended meeting. Similarly, should the travel time of a member of Board or committee member to attend a meeting involve intercontinental travel and exceed 12 hours, an additional remuneration of EUR 3,000 per attended meeting will be paid. 

Out of the annual remuneration to be paid to the Board members, 40 percent of total gross compensation amount will be used to purchase Basware Corporation’s shares at trading on regulated market organized by Nasdaq Helsinki Ltd. However, this only concerns Board members whose ownership of Basware Corporation is less than 5,000 shares. The purchase of shares will take place as soon as possible after the decision by the Annual General Meeting. Shares received as remuneration may not be sold or otherwise transferred during a period of two (2) years. This restriction does not concern persons who are no longer Board members. Travel expenses of the members of the Board of Directors are reimbursed in accordance with the company’s travel policy.

Remuneration of the CEO

The Board decides on the service terms and conditions of the CEO, specified in writing. Currently the CEO has:

  • 3 months’ period of notice and salary for the period of notice should the Company give notice, in addition to which he is entitled to severance pay equivalent of 12 months’ fixed salary;
  • 3 months’ period of notice and salary for the period of notice should the person resign himself, no additional compensation is paid;
  • 12-month prohibition of competition as of the termination of employment on the part of the Company;
  • 24-month prohibition of competition as of the termination of employment on the part of the CEO; and
  • retirement age and pension benefits pursuant to the Employees’ Pensions Act (TyEL).

The short-term remuneration of the CEO is comprised of salary, fringe benefits and a possible annual bonus based on performance. The CEO’s long-term remuneration consists of a share-based incentive scheme. The annual bonus is determined on the basis of the attainment of goals related to the company’s growth and profitability according to its strategy as well as personal objectives. The Board of Directors monitors the fulfillment of the performance and result criteria of the incentive scheme twice a year and approves the bonus to be paid.

The salary of the CEO Vesa Tykkyläinen for the period January 1-December 31, 2018, including benefits, was EUR 360,684 (EUR 374,777 in January 1-December 31, 2017). Salary in money was EUR 347,700 (EUR 359,217 in January 1-December 31, 2017) and fringe benefits EUR 12,984 (EUR 15,560 in January 1-December 31, 2017). Tykkyläinen was paid a bonus of EUR 125,544 in 2018 (EUR 0 in January 1-December 31, 2017). In 2018, Tykkyläinen was not conveyed any shares on the basis of the incentive schemes. (During 2017, Tykkyläinen was granted a total of 1,500 shares on the basis of the incentive schemes. Of these, 750 shares were conveyed to Tykkyläinen, the value of which was approximately EUR 25,524 based on the average share price of the payment days, and EUR 25,524 was paid in cash to cover the withholding tax.)

The accrued pension costs of Vesa Tykkyläinen amounted to EUR 92,584 (EUR 81,670 in January 1-December 31, 2017). The CEO’s pension plan is pursuant to the employment pension legislation.

Remuneration of the Executive Team

The compensation principles of the top management are decided by the Board. The short-term remuneration of the top management consists of salary, fringe benefits and a possible annual bonus based on performance. The top management’s long-term remuneration consists of a share-based incentive scheme. The bonus based on performance is no more than 50 percent of annual basic salary. The bonus is determined on the basis of the attainment of goals supporting to the company’s growth and profitability according to its strategy and personal objectives. The Board of Directors monitors the fulfillment of the performance and result criteria of the incentive scheme twice a year and approves the bonus to be paid.

For the period January 1 - December 31, 2018, the members of Executive Team, excluding CEO, were paid in salaries and fringe benefits total of EUR 1,746,278 (EUR 1,573,993 in 2017). Salary in money was EUR 1,683,489 (EUR 1,535,001 in 2017) and fringe benefits totaled EUR 62,789 (EUR 38,992 in 2017). In addition, EUR 546,031 (EUR 44,275 in 2017) was paid as bonus payments and EUR 531,609 (EUR 403,520 in 2017) on the basis of the long-term incentive scheme.

Remuneration of Executive Team in 2018:

 Salary Fringe
benefits
Bonus
payments
Share-based
payments
Total
CEO Vesa Tykkyläinen347,70012,984125,544 0 486,228
Other members of the Executive Team1,683,48962,789546,031 531,609 2,823,917
In total2,031,18975,773671,574 531,609 3,310,145

Incentive schemes

The compensation principles of the top management are decided annually by the Board. The Executive Team members’ performance bonus is no more than 50 percent of annual basic salary. The performance bonus percentage is not limited in the CEO’s contract of employment. The bonus is determined on the basis of the attainment of personal objectives and goals supporting the company’s growth and profitability according to its strategy. The Board of Directors monitors the fulfillment of the performance and result criteria of the incentive scheme and approves the bonus. In addition to the annual bonus based on performance, the long-term remuneration of the top management consists of share-based incentive schemes, decided by the Board.

 

Matching Share Plan 2018-2020

The Board of Directors resolved on July 17, 2018 to establish a new matching share plan for 2018-2020 for the Group’s key employees.

The prerequisite for receiving reward on the basis of the matching share plan is that the plan member acquires Basware shares. The plan member will, as a reward, receive matching shares for each share subject to the share ownership prerequisite after a matching period of three (3) years. Receipt of matching shares is contingent on the continuation of employment or service and on the plan member holding the acquired shares upon reward payment.

The rewards to be paid in aggregate to plan members on the basis of the matching share plan correspond to the value of a maximum total of 77,714 Basware Corporation shares, including also the proportion to be paid in cash.

The plan as a whole entails an aggregate share ownership interest of approximately 116,571 shares for the plan members, via personal share acquisitions and the right to future share ownership through the matching share plan.

 

Matching Share Plan 2017-2019

The Board of Directors resolved on March 1, 2017 to establish a matching share plan for 2017-2019 for Basware Executive Team members.

The prerequisite for receiving reward on the basis of the matching share plan is that the member of the Basware Executive Team in question acquires Basware shares. The Basware Executive Team member will, as a reward, receive matching shares for each share subject to the share ownership prerequisite after a matching period of three (3) years. Receipt of matching shares is contingent on the continuation of employment or service upon reward payment and that the shares in question are still held by the member.

The Board of Directors resolved that the rewards to be paid in aggregate to the Basware Executive Team on the basis of the matching share plan correspond to the value of a maximum total of 75,000 Basware Corporation shares, including also the proportion to be paid in cash.

Members of Basware Executive Team acquired or allocated a total of 35,017 Basware Corporation shares in the beginning of the plan. The rewards to be paid to Basware Executive Team members on the basis of the plan thus corresponds to a maximum of 70,034 Basware Corporation shares, including also the proportion to be paid in cash.

Performance Share Plan 2017-2019

The Board of Directors resolved on March 1, 2017 to establish a performance share plan for 2017-2019 for key employees.

The performance share plan includes three performance periods, calendar years 2017-2018, 2018-2019 and 2019-2020. The Board of Directors decides on the performance criteria and on the required performance levels for each criterion at the beginning of each performance period.

The potential reward from the performance period 2017-2018 is based on Group’s key performance measures in 2017 and 2018. During 2018 management modified the performance criteria for the 2017-2018 performance periods. For 2017 measurement period target for Total Shareholder Return (TSR) was modified to be more beneficial to the employees, and for 2018 measurement period TSR criteria was removed and replaced with Order Intake. As TSR is a market condition, the aforementioned modifications resulted in an increase in fair value.

The rewards to be paid on the basis of the performance period 2017-2018 correspond to the value of a maximum total of 156,000 Basware Corporation shares, including also the proportion to be paid in cash. The plan is directed to approximately 60 key employees, including the members of the Basware Executive Team.

The potential reward for the performance period 2018-2019 will be based on the Group’s key performance measures in 2018. The rewards to be paid on the basis of the performance period 2018-2019 correspond to the value of a maximum total of 156,000 Basware Corporation shares, including also the proportion to be paid in cash. The plan is directed to approximately 75 key employees, including the members of the Basware Executive Team.

In June 2018, 2,128 shares were conveyed on a directed share issue related to the reward payment for the performance period 2017-2018 of the performance share plan 2017-2019.

At the end of 2018, the performance share plan included 50 employees for the performance period 2017-2018 and 70 employees for the performance period 2018-2019.

 

Restricted Share Plan 2017

The Board of Directors resolved on March 1, 2017 to establish a restricted share plan for 2017. The restricted share plan is directed to selected key employees at Basware. Receipt of the reward is contingent on the continuation of employment or service upon reward payment.

The reward from the restricted share plan will be paid after a vesting period of one to three years. The total rewards to be allocated on the basis of the plan amount to a maximum of 20,000 Basware Corporation shares, including also the proportion to be paid in cash.

At the end of 2017, the restricted share plan 2017 included 6 key employees. The rewards paid on the basis of the plan in May 2018 corresponded to a total of 5,750 Basware Corporation shares, including also the proportion to be paid in cash.

 

Matching Share Plan 2015-2018

The Board of Directors resolved on March 23, 2015 to establish a matching share plan for 2015-2018. The matching share plan was directed to selected key employees at Basware and the total rewards to be allocated on the basis of the plan amounted to a maximum total value of 11,000 Basware Corporation shares. In addition to the share reward, employees included in the plan were also paid a cash portion to cover the taxes resulting from the reward.

The prerequisite for receiving reward on the basis of the matching share plan was that the employee in question acquired Basware Corporation shares at the beginning of the plan. The participating employee could, as a reward, receive matching shares for each share subject to the share ownership prerequisite after a matching period of three (3) years. Receipt of matching shares was contingent on the continuation of employment or service upon reward payment and that the shares in question were still held by the participating employee.

In 2017, the matching share plan 2015-2018 included four Basware key employees. The rewards paid on the basis of the plan corresponded to a total value of 5,148 Basware Corporation shares. The plan ended in January 2018.

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