Appointed by the Board of Directors, the company's CEO is in charge of Digia's day-to-day management and administration in accordance with the instructions and regulations issued by the Board of Directors, and as defined by the Finnish Companies Act. The Managing Director may take exceptional and far-reaching measures, in view of the nature and scope of the company's activities, only if authorised by the Board of Directors. (S)he chairs the Management Group's meeting and is not a member of the Board of Directors.
The CEO's service contract defines in writing the key terms and conditions which govern his/her employment and which are approved by the Board of Directors. The Board of Directors decides the CEO's salary, other remuneration, stock options and other benefits. His/her compensation package is tied to the Group's financial results, and the performance-based bonus payable to him/her is settled as company shares, cash, or a combination of the two, as decided by the Board of Directors.
The company may terminate the CEO's service contract at six months' notice. Upon such termination, (s)he will receive remuneration for the notice period and severance pay equaling 12
months' salary. The CEO's retirement age is as stipulated by the law, and he has no separate pension agreement with the company.
During the financial year 2007 Digia paid to its CEO Jari Mielonen (until September 19, 2007) a sum equal to EUR 192.122,00 as salary and benefits. In addition, Mielonen was paid as one-off
item a sum related to termination of CEO's employment in the company.
The Board of Digia Plc has decided to adopt a new performance-based incentive system in the shape of shares, which is intended to match the shareholders' goals with those of the company's CEO Juha Varelius in order to increase the company's share value, and thus improve the CEO's commitment to the company. The system covers the years 2008-2010 and the possible profit will be based on the company's dividend-adjusted share price. Profit will start to accumulate when the company's share price exceeds EUR 4.50 and the CEO is entitled to the full 210,000-share incentive when the company's share price reaches EUR 7.50. The system stipulates that the first shares cannot be assigned until 31 March 2011 at the earliest.