• Corporate Governance Statement
• Board of Directors
• Executive Management
• Remuneration Statement
• Chief Executive Officer
• Board and Management Holdings
• Insiders
• Risk Management, Internal Control and Internal Audit
• Audit
• General Meeting
• Articles of Association

Remuneration Statement 27 March 2012

Remuneration of the Board of Directors

The Annual General Meeting of the Shareholders of Stonesoft Corporation decides on the remuneration and other benefits of the Board Members annually. The company did not have a nomination- or remuneration committee during the fiscal year 2011. Based on the prevailing practice, the major shareholders of the company prepare proposals to be made to the Annual General Meeting regarding the nomination of the Board Members and their compensation. In addition, the shareholders who have made proposals on the nomination of the Board Members and their compensation have proposed that no option based compensation shall be granded to the main shareholders of the company (the shareholders who have made the compensation and nomination proposals) for acting as Board Members and the CEO of the company will not be paid any remuneration for his/her work at the Board. 

The Annual General Meeting of Stonesoft Corporation confirmed in April 2011 that the remuneration for the Chairman of the Board is EUR 4 000 per month and 15 000 option rights  of the 2008 option plan and for the Members of the Board EUR  2 000 per month and 15 000 option rights of the 2008 option plan. No remuneration in form of option rights was paid to the main shareholders of the company for acting as a Board Member and the CEO of the company did not receive any remuneration for acting as a Board member. In addition, all travelling expenses were compensated based on presented invoices in accordance with the previous policy. No separate remuneration was paid for participating in the meetings of the Board of Directors.    

Monetary remuneration is paid on a monthly basis. Option rights that are based on Board Membership are granted after the Annual General Meeting has decided on the remuneration of the Board of Directors. Members of the Board of Directors may convert the option rights they have received as remuneration to shares according to the option plans.

During 1.1.-31.12.2011 the combined remuneration paid to the Chairman of the Board and the Board Members was EUR 112 000 and 30 000 option rights of the 2008 option plan.

Remuneration paid to the Board of Directors 1.1.-31.12.2011

Remuneration of the Chief Executive Officer

The Board of Directors of Stonesoft Corporation nominates the CEO and determines the terms of the appointment. The terms of the appointment are composed in writing in the service contract.

CEO Mr. Ilkka Hiidenheimo did not receive any compensation for his duties during the year 2011. There is no specific retirement age set forth for the CEO. The CEO's pension is the same as Finland's Employee Pension Act (TYEL) enacts and that is compulsory for all Stonesoft employees. The CEO is not entitled to any additional pension scheme. The service contract for the CEO provides for notice of six months prior to termination with compensation being six months salary and a further optional six months fixed salary in case the company terminates the contract without essential breach of contract by the CEO.  

An up-to-date chart of Ilkka Hiidenheimo’s shareholdings is available in section: Board and Management Holdings.

CEO’s remuneration 1.1.-31.12.2011

Main principles and decision-making order of remuneration:

The Board of Directors approves the selection of members to the Executive Management. The CEO decides on the remuneration of the Executive Management within the limits of the salary and remuneration level as well as according to the compensation scheme approved by the Board of Directors.

The company’s long-term remuneration is based on the option plans. During the fiscal year 2011, Stonesoft Corporation had one option plan, option plan 2008. Further details about both option plan 2008 is available in section: Option Plans and Interim Reports. The Board of Directors decides on granting options to members of the Executive Management or other key personnel. The option rights are used to engage and commit the key personnel of the company to long-standing efforts for product development and sales, and thereby to increase the value of the company. During the fiscal year 2011 the company’s option plan included 33 persons.

A regularly updated chart of the shareholdings and options of the Executive Management is available in section: Board and Management Holdings.

Short-term remuneration is based on the company’s sales development. The members of the Executive Management responsible for sales and marketing of the company’s products and services have a target salary, which is materialized if the quarterly budgeted sales targets in their respective market areas are met. The target salary consists of a fixed (60% - 70%) and a variable part (30% - 40%). The overall annual salary of the members of the Executive Management responsible for sales cannot be more than twice as much as the target salary. However, this would require that the budgeted goals would be significantly exceeded. More detailed determination criteria of the target salary are set individually for all entitled members of the Executive Management and the materialization of the set goals are monitored regularly in such a way that the accomplishment of the strategic goals of the company can be secured through setting the target salaries. The variable part of the salary is paid to the entitled member of the Executive Management quarterly.

The remuneration for the members of the Executive Management who are not directly responsible for the sales or marketing consists of a fixed salary.

There is no special age of retirement for any member of the Executive Management and the pension scheme equals to the employment pension (TYEL) that applies to all the employees of the company.

This Remuneration Statement represents a statement recommended by the Finnish Corporate Governance Code 2010 (Recommendation 47).