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Top management consists of members of the Board of Directors, CEO and other members of the Executive Committee. In 2009, there were no changes in the Board of Directors or in the Executive Committee. In 2008, one new member was appointed to the Executive Committee and one member resigned.
On December 31, 2009, the members of the Board and the Executive Committee held directly a total of 1 795 319 Company shares (December 31, 2008: 912 056 shares) and indirectly through a controlled corporation 1 160 000 shares. Top management owned approximately 7.5% (5.2%) of the issued share capital and voting rights of Rapala on December 31, 2009.
In 2009 and 2008, no options were granted to top management. On December 31, 2009, top management held 291 250 options of which 213 750 options are exercisable (on December 31, 2008, 427 500 options of which 272 500 options were exercisable). If the share option program 2004B was exercised in its entirety, shareholdings and aggregate voting rights held by the members of the Board and the Executive Committee would increase up to 7.8%. The option scheme principles are the same for top management as for other employees.
In 2009, the Board approved a new share-based incentive plan for the Group's 50 key employees. For more information on share-based payments, see note 29 and the section ‘Shares and Shareholders’ of the Annual Report 2009. Details of top management shareholdings and options are given on pages 84–85 of the Annual Report.
The Group’s business transactions or outstanding balances with top management or close members of their family are presented in Note 28 of the Annual Report 2009.
The monthly salary of the CEO is EUR 23 542. CEO is also entitled to a profit bonus according to the principles of the Group’s senior management bonus scheme. His bonus accrued for 2009 totaled EUR 109 400 (2008: EUR 110 000). In addition to the mandatory pension insurance, CEO has the right to receive further compensation of EUR 8 400 annually to be placed in a voluntary pension scheme or a similar arrangement. The retirement age and pension of CEO are determined in accordance with the legislation in force. The Company shall give notice at any time or using 24 months notice period and CEO shall give notice 3 or 6 months prior to terminating the service contract. The term of notice is dependent on the cause for termination of employment. If the service agreement is terminated by the Company without a cause, CEO is entitled to severance compensation corresponding to 24 months’ salary (excluding profit bonuses).
In addition to the monthly salary, CEO and other members of the Executive Committee participate in the Group’s senior management bonus scheme. The amount and payment of the bonus requires that the established EBITDA and cash flow targets are achieved. If the targets are not achieved, payment of bonus is fully at the discretion of the Board of Directors. Bonuses awarded under the scheme are paid in two installments, the first when the audited results for the relevant financial year are known and the second after a predetermined vesting period, to encourage retention of senior management.
Chairman of the Board is paid an annual remuneration of EUR 60 000 and other Members of the Board of Directors remuneration of EUR 30 000. The members of the Remuneration Committee do not receive further compensation. Members of the Board of Directors are paid a daily travel allowance and reimbursed for travel expenses corresponding to the company’s traveling compensation principles. Members of the Board of Directors were paid a total of EUR 240 000 for their work on the Board of Directors and the Remuneration Committee in the financial year 2009 (2008: EUR 240 000).
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