Search

Remuneration report

Board of Directors and its Committees

The Annual General Meeting decides on the remuneration and other financial benefits of the members of Kesko’s Board of Directors and its Committees annually. The remuneration of the members of the Board and its Committees is paid in cash. The Board members do not have share compensation or share-based compensation plans, nor do they participate in the other compensation plans or pension plans of the Company.

The Annual General Meeting of 3 April 2017 resolved to leave Kesko Board members' remuneration unchanged.

Commitment, incentive and remuneration for members of Board of Directors and its Committees
Description 2017 2016
Remuneration Remuneration/person – Chairman €80,000
– Deputy Chairman €50,000
– Member €37,000
– Chairman €80,000
– Deputy Chairman €50,000
– Member €37,000
Share awards None
Meeting fees A meeting fee of €500 per meeting is paid for a Board meeting and its Committee's meeting, with the exception that the Chairman of a Committee who is not the Chairman or the Deputy Chairman of the Board is paid €1,000 per Committee meeting.
Insurance None
Fringe benefits None
Reimbursements of travel expenses and daily allowances Daily allowances and the reimbursements of travel expenses are paid to the Board and Committee members in accordance with the general travel rules of Kesko.
Annual remuneration and meeting fees paid to Board members for Board and Committee work in 2017 (€)*
Meeting fees
Annual remuneration Board Audit Committee Remuneration Committee Total
Esa Kiiskinen (Ch.) 80,000 6,000 1,500 87,500
Mikael Aro (Dep. Ch.) 50,000 6,000 2,500 1,500 60,000
Jannica Fagerholm 37,000 6,000 5,000 48,000
Matti Kyytsönen 37,000 6,000 2,500 45,500
Matti Naumanen 37,000 6,000 43,000
Anu Nissinen 37,000 6,000 1,500 44,500
Toni Pokela 37,000 6,000 43,000
Total 315,000 42,000 10,000 4,500 371,500
* Reported on a cash basis.

President and CEO

President and CEO Mikko Helander’s personal remuneration, other financial benefits, performance bonus scheme criteria and performance bonuses paid are decided by Kesko's Board of Directors based on the Remuneration Committee's preparatory work. A written managing director's service contract, approved by the Board, is in force between the Company and the President and CEO. Helander has been the Company’s President and CEO and the Chairman of the Group Management Board since 1 January 2015.

Salaries, performance bonuses and fringe benefits are reported on a cash basis. The 2016 earnings on accrual basis are calculated by adding the amount of performance bonus paid in 2017 to the salaries and fringe benefits for 2016.

Salaries, bonuses and fringe benefits for the President and CEO
Description 2017 2016
Fixed monetary salary €934,500 €873,600
The maximum amount of performance bonus is a sum corresponding to 8 months' monetary salary €490,000 €420,000
Share awards €1,398,030 €857,255
Car and mobile phone benefits €26,907 €23,160
Total €2,849,437 €2,174,015

In 2017, €1,398,030, or a total of 16,086 shares (maximum amount 21,000 shares), was paid as share award based on the 2016 performance period. The commitment period for share awards granted for the 2016 performance period will end on 31 Dec. 2019.

In 2016, €857,255, or a total of 11,214 shares (maximum amount 21,000 shares), was paid based on the 2015 performance period.

The euro value of the share awards paid in 2017 and 2016 has been calculated using the trade-weighted average share price on the date of assignment. The share awards paid have been net share awards, in addition to which a cash component has been paid to cover the taxes and tax-like charges. The share award euro amounts depicted in the table comprise the combined total of the net value of the shares and the cash component.

For the 2017 performance period, the President and CEO will be paid a share award corresponding to 17,746 shares by the end of April 2018 (Board decision on 31 Jan. 2018). The share award to be paid is a gross share award, from which the applicable withholding tax is deducted and the remaining net amount is paid in shares. The maximum amount of share award to be paid for the 2017 performance period was determined at a total of 38,000 shares. The commitment period for share awards granted for the 2017 performance period will end on 10 Feb. 2021.

Retirement benefit for President and CEO
2017 2016
Voluntary pension plan Payments to voluntary pension plan totalled €1,350,000. Payments to voluntary pension plan totalled €1,070,000.

The amount of old-age pension has been agreed to be 60% of the President and CEO's pensionable earnings in accordance with the Employees' Pensions Act (TyEL) for the ten (10) calendar years preceding the retirement. The pension is based on a defined benefit plan.

Termination benefit for President and CEO

The period of notice for the President and CEO is twelve (12) months if the managing director’s service contract is terminated by the Company and six (6) months if Helander resigns. If the Company terminates the contract for a reason other than a material breach of contract by the managing director, and the managing director does not retire on an old-age pension or some other pension, the managing director is paid, in addition to the salary for the period of notice, a compensation corresponding to the combined amount of 12 months' monetary salary and fringe benefits.

In addition, a health insurance, life insurance and leisure travel insurance have been taken out for Helander.

Other Group Management Board members

Based on the Remuneration Committee's preparatory work, Kesko's Board of Directors makes decisions on the personal remuneration, other financial benefits and the performance bonuses to the Group Management Board members responsible for lines of business. As for the other Group Management Board members, Kesko's Board of Directors makes decisions on the performance bonus principles. The President and CEO makes decisions on the remuneration and financial benefits of the Group Management Board members other than those responsible for lines of business, based on preparatory work by the head of HR, within the limits set by the Chairman of the Board's Remuneration Committee.

In addition to President and CEO Helander, Group Management Board members in 2017 were:

  • Jorma Rauhala, Executive Vice President, building and technical trade division, deputy to President and CEO
  • Ari Akseli, Executive Vice President, grocery trade division (as of 15 November 2017)
  • Johan Friman, Executive Vice President, President of VV-Auto Group
  • Jukka Erlund, Executive Vice President, Chief Financial Officer
  • Matti Mettälä, Executive Vice President, Human Resources
  • Anne Leppälä-Nilsson, Executive Vice President, Group General Counsel
  • Lauri Peltola, Executive Vice President, Corporate responsibility, communications and stakeholder relations
  • Anni Ronkainen, Executive Vice President, Chief Digital Officer


Jorma Rauhala
was appointed President of Kesko’s building and technical trade division and deputy to Kesko’s President and CEO on 15 November 2017. Previously, Rauhala acted as President of Kesko’s grocery trade division. Rauhala’s predecessor Terho Kalliokoski’s membership on the Group Management Board ended on 15 November 2017. Ari Akseli was appointed President of Kesko’s grocery trade division on 15 November 2017. Anne Leppälä-Nilsson retired on 31 December 2017. As her replacement, Mika Majoinen was appointed Group General Counsel and a member of the Group Management Board as of 1 January 2018. Lauri Peltola’s membership on the Group Management Board ended on 31 October 2017.

Salaries, performance bonuses and fringe benefits are reported on a cash basis. The 2016 earnings on accrual basis are calculated by adding the amount of performance bonus paid in 2017 to the salaries and fringe benefits for 2016.

Salaries, bonuses and fringe benefits for other Management Board members (excluding Helander)
Description 2017 2016
Fixed monetary salary €2,153,076 €2,012,999
The maximum amount of performance bonus is a sum corresponding to 4 to 5 months' monetary salary €353,375 €369,250
Share awards €3,528,362 €2,149,128
Car and mobile phone benefits €150,334 €151,977
Total €6,185,147 €4,683,354

In 2017, €3,528,362, or a total of 40,598 shares (maximum amount 53,000 shares), was paid to Group Management Board (excl. the President and CEO) as share award based on the 2016 performance period. The commitment period for share awards granted for the 2016 performance period will end on 31 Dec. 2019.

In 2016, €2,149,128, or a total of 28,302 shares (maximum amount 53,000 shares), was paid based on the 2015 performance period.

The euro value of the share awards paid in 2017 and 2016 has been calculated using the trade-weighted average share price on the date of assignment. The share awards paid have been net share awards, in addition to which a cash component has been paid to cover the taxes and tax-like charges. The share award euro amounts depicted in the table comprise the combined total of the net value of the shares and the cash component. 

For the 2017 performance period, the Group Management Board (excl. President and CEO) will be paid a share award corresponding to 35,586 shares by the end of April 2018 (Board decision on 31 Jan. 2018). The share award to be paid is a gross share award, from which the applicable withholding tax is deducted and the remaining net amount is paid in shares. The maximum amount of share award to be paid for the 2017 performance period was determined at a total of 76,200 shares. The commitment period for share awards granted for the 2017 performance period will end on 10 Feb. 2021.

Retirement benefits and termination benefits for Group Management Board members (excluding Helander)

The old-age pension age of Management Board members who are members of Kesko Pension Fund is 62-63 years. The retirement age of other members according to their service contracts is 63 years, unless the Company and the director agree on extending the contract beyond the retirement age.

The amount of old-age pension for Management Group members who are members of Kesko Pension Fund is 66% of pensionable earnings for the ten (10) calendar years preceding retirement. The retirement benefits of the other Management Board members are determined based on the Finnish Employees’ Pensions Act (TyEL). Those Management Board members who are not members of Kesko Pension Fund are provided with a defined contribution supplementary pension.

In 2017, three Group Management Board members were members of Kesko Pension Fund and their supplementary pensions are determined based on its rules and their personal service contracts. Their supplementary pensions are based on a defined benefit plan. Other Management Board members are provided with a defined contribution supplementary pension.

In 2016, four Group Management Board members were members of Kesko Pension Fund and their supplementary pensions are determined based on its rules and their personal service contracts. Their supplementary pensions are based on a defined benefit plan. The retirement benefits of the other Group Management Board members are determined based on the general provisions applicable to employees’ pensions in Finland (TyEL, the Employees’ Pensions Act).

The period of notice is 6 months if the service contract is terminated by the Company, and 6 months if the director resigns. If the Company terminates the contract for a reason other than a material breach of contract by the director, and the director does not retire on an old-age pension or some other pension, the director is paid, in addition to the salary for the period of notice, a compensation corresponding to the combined amount of 6-18 months' monetary salary and fringe benefits.

Valid authorisations of the Board of Directors concerning remuneration and their use

Kesko’s Annual General Meeting of 4 April 2016 authorised the Board to decide on the transfer of a total maximum of 1,000,000 own B shares held by the Company as treasury shares (Share issue authorisation 2016). The authorisation cancelled an earlier share issue authorisation with similar content. Based on the authorisation, own B shares held by the Company as treasury shares can be issued for subscription by shareholders in a directed issue in proportion to their existing holdings of the Company shares, regardless of whether they own A or B shares. Shares can also be issued in a directed issue, departing from the shareholder's pre-emptive right, for a weighty financial reason of the Company, such as using the shares to develop the Company's capital structure, to finance possible acquisitions, capital expenditure or other arrangements within the scope of the Company's business operations, and to implement the Company's commitment and incentive scheme. Own B shares held by the Company as treasury shares can be transferred either against or without payment. A share issue can only be without payment if the Company, taking into account the best interests of all of its shareholders, has a particularly weighty financial reason for it. The authorisation also includes the Board's authority to make decisions concerning any other matters related to the share issues. The amount possibly paid for the Company's own shares is recorded in the reserve of unrestricted equity. The authorisation is valid until 30 June 2020.

The Annual General Meeting of 4 April 2016 also approved the Board's proposal for its authorisation to decide on the acquisition of a maximum of 1,000,000 own B shares of the Company (Authorisation to acquire own shares 2016). B shares are acquired otherwise than in proportion to the shareholdings of shareholders with the Company's distributable unrestricted equity at the B share market price quoted in public trading organised by Nasdaq Helsinki Ltd ("the exchange") at the date of acquisition. The shares are acquired and paid for in accordance with the rules of the exchange. The acquisition of own shares reduces the amount of the Company's distributable unrestricted equity. B shares are acquired for use in the development of the Company's capital structure, to finance possible acquisitions, capital expenditure and/or other arrangements within the scope of the Company's business operations, and to implement the Company's commitment and incentive scheme. The Board makes decisions concerning any other issues related to the acquisition of own B shares. The authorisation expired on 30 September 2017.

In addition to the above authorisations, the Board of Directors has a share issue authorisation decided by the General Meeting of 13 April 2015, which cannot, however, be used for remuneration purposes.

On 1 February 2017, the Board of Directors decided, based on the issue authorisation in force and the fulfilment of the performance criteria of the 2016 performance period of Kesko’s previous 2014-2016 share plan, to grant own B shares held by the Company as treasury shares to the persons included in the target group of the 2016 performance period. This transfer of a total of 192,822 own B shares was announced in a stock exchange release on 15 March 2017. Based on the 2014-2016 share-based compensation plan decided by the Board, a total maximum of 600,000 own B shares held by the Company as treasury shares could be granted within a period of three years based on the fulfilment of the performance criteria. The Board decided on the performance criteria and the target group separately for each performance period. During 2017, a total of 9,850 shares granted based on the fulfilment of the performance criteria of the share-based compensation plan 2014-2016 were returned to the Company in accordance with the terms and conditions of the share-based compensation plan. The returns during 2017 were communicated in stock exchange releases on 12 May, 18 September and 28 December 2017. The 2014–2016 share-based compensation plan has ended.