Rewards and incentive plans - Allshares

When designing a new incentive program, it is important to define what the owners, Board of Directors and company are aiming to achieve through the program. A functioning incentive program is always linked to the company’s strategic targets.

Important matters to consider:

• Does the remuneration guide and contribute to the implementation of the strategy?
• To which extent does the company wish to reward for the achievement of targets?
• Is the program flexible in potential cases of change in strategy and/or market?
• Does the company’s remuneration support the commitment of the personnel?
• Is the objective of the program to make the program participants shareholders in the company?

The advisory services of Allshares include, e.g:

• Ownership-based arrangements
• Long-term incentive programs
• Short-term incentive programs
• Employee ownership-based and commitment programs
• Auditing of incentive programs

When designing incentive programs, it is important to consider also technical details related to the administration of incentive programs. Allshares offers both incentive plan design and administration services. Therefore we can provide seamless and comprehensive service experience to our clients. 

The Board of Directors of the company and the remuneration committee of the Board of Directors determine the company’s remuneration strategy, i.e. objectives and terms for remuneration. The remuneration strategy determines the remuneration structure, takes up a stand on the remuneration levels and affects the forms of incentive programs used.

• Has your company determined the principles for remuneration?
• Are the paid incentives in line with the achieved results?
• Do the program participants understand the objectives of the granted incentive programs?
• Does the external communication of remuneration comply with the current recommendations and regulations?

Allshares supports its clients in determination and implementation, as well as internal and external communication of the remuneration strategy.

Top Executive Compensation Survey

The yearly published Top Executive Compensation Survey gives a comprehensive picture of the levels and trends of the overall top executive compensation in Finland. Our title-based survey, published since 2001, covers CEOs and executives reporting directly to the CEOs. The General Report of the Compensation Survey includes a summary of executives’ salary and compensation levels in standard groups. The survey covers approximately 150 companies annually. Our survey has excellent coverage, as 2/3 of the large-cap and mid-cap companies on Nasdaq Helsinki Ltd participate in the survey.

Key Employee Compensation Survey

Our survey of the compensation of companies' key employees analyses the role of all compensation elements as part of the key personnel's total compensation. Key employees are divided into peer groups by job difficulty level and job function.

Board Remuneration Report

Our Board Remuneration Report provides a comprehensive picture of the compensation of board of directors. The report includes all Finnish listed companies as well as Swedish and Norwegian large-cap and mid-cap companies. On request, we provide companies with tailored board remuneration analysis. In these company-specific reports, remuneration of the target company's board of directors in a selected target group is analysed in more detail, e.g. for discussions at the nomination committee or the General Meeting. The report uses remuneration decided by the General Meeting, thus giving a comparable and transparent picture of the annual fees and meeting fees. The report serves as a useful basis for preparing the board remuneration proposal and for validating it at the General Meeting.

A personnel fund is a fund owned by the personnel, and its operation is based on law. It is possible to fund all-employee performance bonuses and profit bonuses into the fund. The fund invests the bonuses in selected instruments, including the possibility of investing in the company's own stock.

No social security contributions will be paid for fundable bonuses, but they can be exploited in bonuses. When funded, no taxes are paid on the bonuses, and thus there is also a return on funded bonuses for the portion of the tax. Of the bonuses withdrawn, 20% is tax-free, the rest will be subject to earned income tax. Funding can be optional, making the benefit flexible depending on the life situation of employees. 

Allshares provides an end-to-end fund establishment and maintenance advisory service as well as fund administration service. In partnership with Evli, we provide wealth management services to funds.

Allshares service selection includes versatile and tailored banking, back office and help desk services, accounting and reporting services for IFRS 2 expense recognition and management, hedging and execution services for stock options and share ownership plans as well as personnel fund administration. The entire service chain is available to the company from one place – from the share plan design to the asset management of the participants.

The service package is based on the Incentive.Online portal for HR officers, incentive scheme managers and personnel fund members around the world. We help to inform beneficiaries about the program, practical measures and the liquidation of incentives. We provide all the services related to incentive management including issuance, custody and brokerage services, reports to the financial administration (IFRS 2) and the authorities (MAR).