4. Employee benefit expenses
2017 2016
Salaries and fees -254.8 -254.8
Share-based payments 0.0 -0.0
Pension expenses, defined contribution plans -28.4 -28.6
Pension expenses, defined benefit plans -2.2 -1.7
Total pension expenses -30.5 -30.3
Other social expenses -43.1 -41.4
Employee benefit expenses -328.4 -326.6
Key management personnel compensation:
Short-term employee benefits -3.1 -2.7
Post-employment benefits -0.4 -0.4
Termination benefits -0.7 -1.6
Share-based payments 0.0 -0.0
Key management salaries, fees and benefits -4.2 -4.7
Average number of employees during financial year
Clerical employees 1 226 1 269
Workers 6 066 6 050
Total 7 292 7 319
Members of Board of Directors: Salaries and fees Post-employment benefits
Mikko Nikula, Chairman 0.071 -
Marko Onnela, Debuty Chairman 0.030 -
Pirjo Väliaho 0.043 -
Per Olof Nyman, starting from 6.4.2017 0.020 -
Riitta Palomäki, starting from 6.4.2017 0.030 -
Tuomas Salusjärvi, starting from 6.4.2017 0.024 -
Henrik Treschow, until 6.4.2017 0.014 -
Teija Andersen, until 6.4.2017 0.013 -
Per Nilsson, until 6.4.2017 0.006 -
Veikko Kemppi, starting from 6.4.2017 0.016 -
Carl-Peter Thorwid, starting from 6.4.2017 0.019 -
Total 0.287 0
CEO
Jari Latvanen 0.677 0.130
The Finnish members of the Group Leadership Team are covered by a contribution-based additional pension insurance. The contribution is 20 per cent of the insured person’s annual pay. The retirement age according to the pension agreements is 63 years.
Share-based payments
Performance Share Plan 2013
The Board of Directors of HKScan Corporation has on 19 December 2012 approved a new share based incentive plan, Performance Share Plan 2013, as a part of the incentive and commitment program for the Group key employees. The new Plan includes three one-year performance periods, calendar years 2013, 2014 and 2015, from which the key employees can earn HKScan series A shares based on achieving the set targets. The Board of Directors of the Company will decide on the performance criteria and their targets for a performance period at the beginning of each performance period. Furthermore, the new Plan includes one three-year performance period, calendar years 2013-2015. The prerequisite for receiving reward on the basis of this performance period is that a key employee previously owns or acquires the Company´s series A shares up to the number determined by the Board of Directors.
The potential reward from the performance period 2015 will be based on the HKScan Group´s Earnings per Share (EPS) and Return on Capital Employed (ROCE).
The possible rewards from the performance 2015 will be paid in 2018 partly in the HKScan series A shares and partly in cash. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key personnel. In general, no reward will be paid, if the key employee's employment or service ends before reward payment.
LTI Brigde Plan 2016
On 18 December 2015, HKScan announced that the Board of Directors had approved a share based incentive plan for the Group's key personnel for the year 2016. The new plan covers one performance period, year 2016. The potential reward from the performance period will be based on the HKScan Group´s Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Earnings per Share (EPS).
Rewards from the performance period will be paid partly in the Company’s A series shares and partly in cash as follows: 50 per cent pay-out in 2017 and 50 per cent pay-out in 2018. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key personnel. No reward will be paid, if the key employee’s employment or service ends before reward payment.
The plan is directed to 37 people. The rewards to be paid on basis of the performance period are a maximum approximate total of 366 000 HKScan Corporation series A shares and cash payment corresponding to the value of such shares.
No rewards will be paid from performance period 2016 since the performance criteria targets were not achieved.
LTI Bridge Plan 2017-2019
On 10 April 2017, HKScan announced that the Board of Directors had approved a share based incentive plan for the Group's key personnel for the year 2017. The new plan covers one performance period, year 2017. The potential reward from the performance period will be based on the HKScan Group´s Return on Capital Employed (ROCE) and Earnings per Share (EPS).
Rewards from the performance period will be paid partly in the Company’s A series shares and partly in cash as follows: 50 per cent pay-out in 2018 and 50 per cent pay-out in 2019. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key personnel. No reward will be paid, if the key employee’s employment or service ends before reward payment.
The plan is directed to 28 people. The rewards to be paid on basis of the performance period are a maximum approximate total of 743 000 HKScan Corporation series A shares, including the cash payment for taxes and tax-related costs.
More specific information of the performance share plan grants are presented in the tables below.
Share based incentives during the reporting period 1 Jan. 2017 – 31 Dec. 2017
Plan
Instrument Plan 2017–2019,
2018 delivery
Plan 2017–2019,
2019 delivery
Plan 2016–2018,
2017 delivery
Plan 2016–2018,
2018 delivery
Performance
Period 2015
TOT/WA
Initial amount, pcs 371 500 371 500 366 000 366 000 451 000 1 926 000
Initial allocation date 8 June 2017 8 June 2017 16 June 2016 16 June 2016 10 Feb. 2015
Vesting date / payment approximately 30 June 2018 31 March 2019 31 Aug. 2017 31 March 2018 30 Apr. 2018
Maximum contractual life, yrs 1.0 1.8 1.2 1.8 3.2 2.2
Remaining contractual life, yrs 0.5 1.3 0.0 0.0 0.3 1.2
Vesting conditions ROCE (70%), EPS (30%), Employment precondition ROCE (70%), EPS (30%), Employment precondition EBITDA (70%), EPS (30%), Employment precondition EBITDA (70%), EPS (30%), Employment precondition EPS (70%), ROCE-% (30%), Employment precondition
Number of persons at the end of the reporting year 23 23 0 0 10
Payment method Cash & Equity Cash & Equity Cash & Equity Cash & Equity Cash & Equity
Changes during the period 2017 Plan 2017–2019,
2018 delivery
Plan 2017–2019,
2019 delivery
Plan 2016–2018,
2017 delivery
Plan 2016–2018,
2018 delivery
Performance
Period 2015
Total
1 Jan. 2017
Outstanding at the beginning of the reporting period, pcs 0 0 261 000 261 000 53 770 575 770
Changes during the period
Granted 331 500 331 500 0 0 0 663 000
Forfeited 53 000 53 000 0 0 28 979 134 979
Excercised 0 0 0 0 0 0
Expired 0 0 261 000 261 000 0 522 000
31 Dec. 2017
Outstanding at the end of the period 278 500 278 500 0 0 24 971 581 971
The pricing of the share based incentives granted during the period was determined by the following inputs and had the following effect:
Valuation parameters for instruments granted during period
Share price at grant, euros 3.21
Share price at reporting period end, euros 3.13
Maturity, years 1.5
Expected dividends (unless they are compensated), euros 0.00
Fair value at grant, euros 2 128 230
Fair value 31 Dec. 2017, euros 0
Effect of share-based incentives on the result and financial position during the period
Expenses for the financial year, share-based payments, euros -35 242
Expenses for the financial year, share-based payments, equity-settled, euros -11 922
Liabilities arising from share-based payments 31 Dec. 2017, euros 39 377