Governance

Corporate Governance

DNA Plc (“DNA”, “company” or “Group”) is a Finnish public limited liability company. Parent company DNA Plc and its subsidiaries form the DNA Group. The company is domiciled in Helsinki, Finland.

The obligations and responsibilities of DNA’s governing bodies are determined by Finnish legislation. In decision-making and governance, the company complies with the Finnish Limited Liability Companies Act, the rules for listed companies, DNA’s Articles of Association, the charters of the DNA’s Board of Directors and its committees, the rules of Nasdaq Helsinki Ltd, the regulations guidelines of the Financial Supervisory Authority and the Finnish corporate governance code for listed companies issued by the Securities Market Association (“governance code,” www.cgfinland.fi).

Corporate Governance Statement 2016
Corporate Governance Statement 2015
Corporate Governance Statement 2014
Corporate Governance Statement 2013
Corporate Governance Statement 2012

Governing bodies

DNA's governing bodies comprise the general meeting of shareholders, the Board of Directors and the CEO. The Executive Team assists the CEO in the management of the company and the Group.

General Meeting

The General Meeting is the highest decision-making body of DNA. DNA Board of Directors convenes the General Meeting, prepares the matters to be discussed and implements the decisions of the General Meeting. The Annual General Meeting (AGM) is held once a year within six months of the end of the financial period, at a time specified by the Board of Directors. The meeting discusses matters that fall within the scope of its responsibility under the Articles of Association and any other proposals to the AGM. Extraordinary General Meetings can be held as required. General Meetings take place in Helsinki.

Board of Directors

According to the company Articles of Association, the DNA Board of Directors comprises five to nine ordinary members elected by the Annual General Meeting. The Board of Directors has confirmed a written charter on the duties of the Board of Directors, matters on the agenda, meeting practices and the decision-making process. According to the charter, th e Board of Directors discusses and decides on matters that are significant to the Group's finances, business or principles. The Chairman of the Board of Directors is Pertti Korhonen. The Board of Directors has two committees: the Audit Committee and the Compensation Committee.

The CEO and the Executive Team

The CEO is appointed by the Board of Directors. The duties of DNA’s CEO are as specified in the Limited Liability Companies Act. The CEO independently attends to the executive management of the Group according to the strategic principles and goals approved by the Board of Directors and the operational plans and general principles confirmed by the Board of Directors (general competence).

The Group Executive Team comprises the CEO; Senior Vice Presidents of the Group’s business segments; the CFO; Senior Vice President, Technology; the CIO; Senior Vice President, Legal Affairs; Senior Vice President, Human Resources; and Senior Vice President, Strategy. DNA’s CEO is Jukka Leinonen.

General Meeting

According to DNA’s Articles of Association, the responsibilities of the General Meeting include:

  • The adoption of the financial statements, which in the parent company also involves the adoption of the consolidated financial statements;
  • Deciding on the use of the profit shown on the balance sheet;
  • Discharging the members of the Board of Directors and the President and CEO from liability;
  • Deciding the number of members in the Board of Directors;
  • Electing the members of the Board of Directors and deciding on their compensation;
  • Electing the auditor and deciding on the auditor’s compensation.

The General Meeting may also makes decisions on other matters falling within its competence according to the Finnish Limited Liability Companies Act, such as amendments to the Articles of Association, issue of new shares and option rights as well as repurchase of the company’s own shares.

In addition to the AGM, Extraordinary General Meetings are convened by the Board of Directors as necessary. The Board of Directors is also obliged to convene a General Meeting when requested by an auditor or by shareholders representing at least 10 per cent of all DNA shares in writing in order that a specific matter could be discussed.

According to the Limited Liability Companies Act, a shareholder has the right to have a matter falling within the competence of the General Meeting dealt with by the General Meeting, if the shareholder so demands in writing from the Board of Directors well in advance of the meeting, so that the matter can be included in the notice. The shareholder shall send the request, along with the related grounds or proposal, by email to cg@dna.fi. By the end of the financial period preceding the AGM, DNA announces a date on its Internet pages by which the shareholder shall submit any requests on a matter to be discussed at the AGM to the Board of Directors.

DNA shares have been entered in the book-entry system maintained by Euroclear Finland Ltd.

Notice of the General Meeting

The notice convening a General Meeting shall be delivered to the shareholders by publishing it on the company's website no earlier than three (3) months and no later than three (3) weeks before the General Meeting, however, never later than nine (9) days before the record date of the General Meeting. To be entitled to attend the General Meeting, shareholders must register with the company by the date specified in the notice, which shall be no earlier than ten (10) days before the General Meeting.

Registration

Registration for the General Meeting takes place no later than on the due date specified in the notice of the General Meeting. Each shareholder may attend the General Meeting in person or through an authorized representative. A shareholder or representative may have an assistant present at the General Meeting.

Voting

The company has one series of shares. A share entitles to one vote at General Meetings. As stipulated in the Finnish Limited Liability Companies Act, a proposal supported by more than half of the votes shall constitute a decision of the General Meeting. However, the Finnish Limited Liability Companies Act stipulates that several matters, including the amendment of the Articles of Association and a decision on a directed share issue, require a decision by a majority − as specified in the act − of the votes cast and the shares represented at the meeting.

The company Articles of Association include a redemption clause and consent clause. The right to vote at General Meetings and the redemption of company shares are restricted by shareholder agreements.

Shareholders’ Nomination Committee

DNA’s General Meeting has established the Shareholders’ Nomination Committee and approved its charter.
The permanent Nomination Committee consisting of shareholders or their representatives is tasked with the preparation of proposals for the General Meeting regarding Board members’ election and compensation. The Nomination Committee was established in the AGM of 2015 until further notice by the AGM.

The committee consists of the largest three shareholders or representatives appointed by the said shareholders. The three shareholders whose portion of the votes produced by all the shares in the company according to the shareholders’ register, maintained by Euroclear Finland Ltd or other, is the greatest on 1 September of the year preceding the AGM shall have the right to appoint the committee members in the manner specified in the committee charter.

In addition, the Chairman of the company’s Board of Directors participates in the committee work in the capacity of specialist.
The company publishes the committee members when the members have been appointed. The term of office of the committee expires annually when a new committee is appointed. A quorum is constituted by the presence of more than half of the members of the committee. The committee shall not make a decision unless all committee members have had the opportunity to participate in the discussion of the matter and to be present at the meeting.

The duties of the committee include the following:

  • Preparing and presenting a proposal for the General Meeting regarding Board members’ compensation;
  • Preparing and presenting a proposal for the General Meeting regarding the number of Board members;
  • Preparing and presenting a proposal for the General Meeting regarding the election of Board members; and
  • Finding successors for Board members.

In 2015, the members of the Nomination Committee were Esa Haavisto (appointed by Finda Oy), Seppo Vikström (appointed by PHP Holding Oy) and Esko Torstila (appointed by Ilmarinen Mutual Pension Insurance Company).

The committee shall submit the proposals prepared for the AGM to the company’s Board of Directors not later than on 1 February prior to the AGM. The proposals will be published and included in the notice of the General Meeting.
 

Board of Directors

The Board of Director has a duty to promote the interests of the company and all its shareholders. The Board of Directors is responsible for duly organizing the company’s management, operations, accounting and asset management. The Board of Directors has confirmed a written charter on the tasks of the Board of Directors, matters on the agenda, meeting practices and the decision-making process.

Members of the Board of Directors

Name Position Year of birth
Pertti Korhonen Chairman of the Board 1961
Jukka Ottela Member of the Board 1953
Kirsi Sormunen Member of the Board 1957
Anu Nissinen Member of the Board 1963
Tero Ojanperä Member of the Board 1966
Margus Schults Member of the Board 1966
Heikki Mäkijärvi Member of the Board 1959

 

Read more about the members of the Board of Directors

Operations of the Board

According to DNA’s Articles of Association, the Board of Directors is composed of five to nine ordinary members elected by the General Meeting. The Board of Directors’ proposal for the Annual General Meeting regarding Board members is prepared by the Shareholders’ Nomination Committee. When members are elected to the Board of Directors, the requirements laid down by the company's operations and development phase and valid legislation, such as the rules of Nasdaq Helsinki Ltd, other applicable rules, and the recommendations of the governance code must be considered. A person elected to the Board of Directors must have the competence required for the position and be able to use a sufficient amount of time to attend to Board duties. The Board of Directors must include representatives of both genders, and its composition must satisfy the principles of diversity.

The term of office of a Board member begins immediately at the end of the Annual General Meeting and ends at the end of the first Annual General Meeting following the election. If a membership becomes available in the middle of the term of office, a new member is elected, if necessary, for the remainder of the term at a General Meeting.

The Board of Directors meets regularly approximately once per month, and as and when deemed necessary. A memo is written for each meeting. The Chairman of the Board of Directors calls the Board of Directors and is responsible for Board work. Each member of the Board of Directors has the right to propose matters to the Board’s agenda. The Board of Directors of the Company is quorate when more than one-half of its members are present. Decisions of the Board of Directors are majority decisions, and in the event of a tie, the vote shall be decided by the casting vote of the Chairman of the Board. If there is a tie in an election of a person, the election shall be decided by drawing lots. As stipulated by law, a member of the Board of Directors shall be disqualified from the consideration of a matter that involves a conflict of interest.

Independence of directors

According to the Finnish Corporate Governance Code, the majority of the directors shall be independent of the company. In addition, at least two of the directors representing this majority shall be independent of the company’s significant shareholders.

The Board of Directors evaluates the independence of its members. The members of the Board of Directors confirm in writing the information required for evaluating their independence at the annual constitutive meeting of the Board of Directors, and commit themselves to informing the company, without delay, of any changes taking place during the term of office.

ln 2015, all six members of the Board were deemed to be independent of the company. Chairman of the Board Jarmo Leino was regarded as not independent of significant shareholders. He was nominated to the Board by Finda Oy, which is DNA’s largest shareholder. Jukka Ottela is also not independent of significant shareholders. He was nominated to the Board by PHP Holding Oy, which is DNA’s significant shareholder. The other five members of the Board were deemed independent of major shareholders. DNA Plc’s Extraordinary General Meeting appointed Pertti Korhonen as a new member of the Board. He is independent of the company and of major shareholders.

Diversity of the Board of Directors

Competent and efficient Board work requires that the members of the Board of Directors are highly competent and sufficiently diverse. The Shareholders’ Nomination Committee also considers the composition of the Board from the perspective of diversity.

With regard to the composition of the Board of Directors, it is essential that the members of the Board have diverse and complementary competence, education and experience in different industries and sectors, management and businesses of different development phases. The members’ personal qualities are also important. Experience in strategically important consumer and corporate markets, experience in the digital operating environment, customer understanding and a diverse age structure also contribute to the diversity of the Board of Directors. Both genders shall be represented in the Board.

The composition of the Board of Directors must be such that it enables the enhancement of the company’s present and future business. DNA reports on the diversity of the Board of Directors in its Corporate Governance Statement.

Board of Directors in 2015

The Board met 10 times in 2015. The participation rate of the Board of Directors in the meetings was 98 per cent. In addition to its regular duties, the Board focused on strengthening DNA’s corporate business, cost-efficiency of investments, cooperation related to the shared mobile communication network constructed by Suomen Yhteisverkko Oy, fast changes in the operating environment of entertainment business as well as the efficiency of DNA’s ICT infrastructure.

The CEO and the Executive Team

The CEO is nominated and controlled by the Board of Directors. The terms of the CEO's employment are specified in a written CEO agreement, which is approved by the Board of Directors. The company discloses the CEO’s personal information, shareholdings, duties and financial benefits.

The duties of DNA’s CEO are as specified in the Limited Liability Companies Act. The CEO independently attends to the executive management of the company according to the strategic principles and goals approved by the Board of Directors and the operational plans and general principles confirmed by the Board of Directors (general competence).

The Group Executive Team comprises the CEO; Senior Vice Presidents of the Group’s business segments; the CFO; Senior Vice President, Technology; Senior Vice President, Legal Affairs; Senior Vice President, Human Resources; Senior Vice President, Strategy; and the CIO. The CEO is the Chairman of the Group Executive Team. Members of the Executive Team are nominated by the Board of Directors.

Members of the Executive Team

Name Position Year of birth
Jukka Leinonen CEO 1962
Asta Rantanen Senior Vice President, Legal Affairs 1962
Timo Karppinen CFO 1964
Pekka Väisänen Senior Vice President, Consumer Business 1966
Hannu Rokka Senior Vice President, Corporate Business 1965
Tommy Olenius Senior Vice President, Technology 1962
Janne Aalto CIO 1965
Christoffer von Schantz Senior Vice President, Strategy 1973
Marko Rissanen Senior Vice President, Human Resources 1974

 

Read more about the CEO and the Executive Team

Main principles of internal control

Internal control is a process, approved by DNA’s Board of Directors, to enhance risk management in the DNA Group regarding risks that threaten the company’s goals and business. Another objective is to identify, analyse and monitor business related risks. DNA’s internal control is guided by the valid Finnish legislation, rules and recommendations of Nasdaq Helsinki Ltd, regulations and guidelines of the Financial Supervisory Authority, and the governance code.

The Board of Directors has confirmed the principles of internal control, which are based on recognised international principles of good internal control. 

The CEO and the Board of Directors have responsibility for ensuring that it is proportionate to operational risks. The Board of Directors is responsible for ensuring that the scope of internal audit is appropriate.

The objective of internal control is to ensure, to a sufficient extent, that the company meets its goals in areas such as:

  • effectiveness and efficiency of operations;
  • reliability and integrity of financial and operational information;
  • compliance with laws, regulations and agreements, and with the company’s own operating principles.

The company has a separate compliance programme related to competition law.

The areas of internal control comprise the following:

  • internal operating environment (control environment);
  • goal-setting;
  • risk identification and management;
  • control measures;
  • reliable information and communication (reporting);
  • evaluation and monitoring of internal control;
  • systems and security;
  • monitoring of outsourced operations.

Internal audit

The Group’s internal audit supports the CEO, the Board of Directors and the operative management in their controlling duty.  Internal audit has been established by the Board of Directors, and the functions and principles of the company's internal audit have been defined in the Internal Audit Charter confirmed by the Board of Directors. Internal audit’s sphere of duties covers the DNA Group.

Internal audit is independent of the Group companies and their management. Governance of internal audit is the responsibility of Senior Vice President, Legal Affairs, who is a member of the Executive Team. Internal audit has direct and unlimited access to the senior management and Board of Directors of the company, and it issues regular reports to the company Audit Committee and, when necessary, to the Board. Internal audit carries out its duties in accordance with an operational plan approved by the Board of Directors. When required, internal audit performs additional checks as proposed by the function itself or by the Board of Directors. Internal audit communicates with the DNA Group’s Board of Directors and internal control to ensure efficient coordination of auditing activities.

Internal audit reports on the results of the audit to the management of the audited operation, the CEO, the Executive Team and the Audit Committee, and prepares an annual summary on the audits for the Audit Committee.

The Board of Directors confirms decisions on the appointment and dismissal of the person in charge of internal auditing.

The objective of internal audit is to ensure that the company’s targets are met in areas such as:

  • effectiveness and efficiency of operations;
  • ensuring effective management of the organisation and accountability;
  • reliability of financial and operational reporting;
  • reporting risk and control information to appropriate units in the organisation;
  • safeguarding of assets;
  • enhancing ethics and values within the organisation;
  • compliance with laws and agreements;
  • coordination of operations and transmission of information between the Board of Directors, external and internal audit and the company management.

Internal audit complies with the international standards for the professional practice of internal auditing and the ethical principles and practical instructions of IIA (The Institute of Internal Auditors Inc.) in its work.

The guidelines, annual operational plan and budget of internal audit are discussed and approved by the Board of Directors. The Audit Committee and the Board of Directors receive all the auditors’ reports and an annual summary of the audits performed.

Insider policy

DNA complies with the rules and instructions of Nasdaq Helsinki Oy, such as its insider guidelines, the Market Abuse Regulation ((EU) No. 596/2014, MAR), the Level 2 Regulations issued under it, the provisions of the Securities Market Act and the Penal Code, and the rules and guidelines of the Financial Supervisory Authority and ESMA (the European Securities and Markets Authority). These are supplemented by the company’s own guidelines for insiders, the aim of which is to provide clear operational guidelines and rules on the management of insider issues, disclosure of inside information, maintenance of lists of insiders and the transactions of the company’s management and their closely associated persons.

DNA discloses all inside information directly related to the company as soon as possible. DNA may delay the disclosure of inside information if all conditions under applicable regulations for delaying the disclosure of inside information are met. The company publishes all disclosed inside information on its website and keeps it there for at least five years. DNA maintains project-specific insider registers in situations required under applicable regulations.

Each person who serves in a management position at DNA must notify the company of all persons closely associated to them, and of any changes in this information. DNA will draw up a list of members of the management and their closely associated persons. DNA’s management and their closely associated persons notify both DNA and the Financial Supervisory Authority of all transactions conducted on their own account relating to DNA’s financial instruments. DNA, in turn, publishes these transactions through a stock exchange release. Notifications and disclosures are carried out within the time limits set by legislation.

A member of the management is not entitled to conduct transactions on their own account or on the account of a third party with DNA’s financial instruments during a 30-day closed period preceding the publication and including the date of publication of the company’s financial statements release or interim report (trade restriction).

The person responsible for the company’s insider issues is the Senior Vice President of Legal Affairs. She is responsible, for example, for the implementation of the following tasks at the company:

  • internal communications about insider issues;
  • training related to insider issues;
  • drawing up and maintaining lists of insiders, and providing them to the Financial Supervisory Authority (on request);
  • obtaining approvals from the persons included in the lists of insiders;
  • monitoring of insider issues; and
  • monitoring of regulatory changes related to insider issues.

Auditing of the Accounts

The company’s financial period is one calendar year. Under the Articles of Association, the company has one auditor, nominated by the Annual General Meeting. The auditor must be a public accountant authorised by the Central Chamber of Commerce, and the principal auditor must be an Authorised Public Accountant. Term of office of the auditor is the financial period, and the auditor's duty shall expire at the end of the first Annual General Meeting following the election. The auditor shall present the company's shareholders with an auditors' report as part of the financial statements in compliance with the legislation in force. The auditor reports regularly to the Audit Committee and the Board of Directors.

This Audit Committee’s proposal for the auditor is included in the notice of the General Meeting.

The company shall inform the auditor’s compensation for the financial period. Any fees paid to the auditor for services not related to the auditing of the accounts shall be stated separately. Companies belonging to the same Group or chain as the auditor firm, as well as companies controlled by the auditor, are considered equal to the auditor. Fees paid by all companies belonging to the same Group as the company are reported as fees.

DNA’s auditor is PricewaterhouseCoopers Oy, with Authorised Public Accountant Mika Kaarisalo acting as the principal auditor.

Auditing of the Accounts in 2015

DNA’s auditor was PricewaterhouseCoopers Oy, with Authorised Public Accountant Mika Kaarisalo acting as the principal auditor.

In 2015, the auditors’ audit fees amounted to EUR 221,899 and other fees to EUR 278,961.

Purpose and objectives of risk management

The purpose of risk management is to help DNA’s management achieve the company’s strategic objectives and provide the company’s Board of Directors with up-to-date information on company risks and their management.

In addition, risk management is used to protect DNA’s critical success factors.

Any risks that undermine DNA’s strategically significant competitive strengths must be avoided if possible, and special attention must be paid to managing such risks.

Risk refers to events or circumstances which, if they materialise, could affect DNA’s ability to achieve its strategic targets or the operative targets derived from them.

Systematic risk management is in place to ensure that:

  • DNA reaches its operational goals;
  • Risks are taken into account in operational decision-making;
  • DNA takes the right risks in terms of its strategy;
  • The company is aware of all significant risks related to its operations;
  • All necessary measures are taken to prevent significant risks or to prepare for consequences thereof;
  • Company management and the Board of Directors are up to date of DNA’s risks and their management.

Risk management process

The Board of Directors decides on the objectives and principles of risk management and confirms the company’s risk management policy. The Board monitors the implementation of risk management. The Board of Directors has established an Audit Committee. Its risk management duties are defined in the Audit Committee Charter, which is confirmed by the Board of Directors.

The CEO is responsible for the practical organisation of risk management and maintenance of the risk management policy.

The risk management process provides reports on risks and risk management methods to the DNA Executive Team, Audit Committee and Board of Directors. Operational plans for the management of significant risks are drafted based on risk management reports, and the Executive Team and Audit Committee monitor the implementation of these plans.

The annual risk management plan is is aligned with the annual plan of DNA’s strategy process. The ambition is to update DNA’s risk map annually and to draft 1 or 2 reports on the key risks and uncertainty factors and their management for DNA’s Executive Team, Audit Committee and Board of Directors.

DNA’s Executive Team selects the key risks and assigns persons to be responsible for them. These persons document appropriate risk management methods and development measures for their responsibility area and submit them to the CEO for approval. The responsibility for a risk is assigned to a person who, based on their role in the company, is best qualified to understand the risk and determine how its management should be developed. Several persons can share responsibility for a risk.

In addition, DNA reports on the key risks and uncertainty factors in the Annual Report and interim reports. Risk management principles related to financial reporting are described in the Corporate Governance Statement.

Read more about DNA’s risks in the latest Annual Report

Compensation

Compensation systems have been designed to support the strategic, financial and operative development of DNA, to motivate the personnel and to reward the personnel for good financial results. DNA adheres to the compensation principles approved by the Board of Directors.

Board of Directors’ compensation

DNA’s Annual General Meeting decides on the compensation of the members of the Board of Directors and its committees. The Shareholders’ Nomination Committee reviews the Board members’ compensation and compensation methods annually and submits proposals to the AGM. Compensation of the Board of Directors of the Company is paid mainly once a year. No pension payments relate to the compensation paid to the Board of Directors of the Company.

DNA’s Annual General Meeting decides on the Board of Directors’ compensation for one term of office at a time. DNA’s AGM of March 22, 2017 decided not to change the compensation paid to the Board of Directors, which are the following:

  • Annual compensation, Chairman of the Board of Directors: EUR 144,000
  • Annual compensation, members of the Board of Directors: EUR 48,000
  • Meeting fee, members of the Board of Directors: EUR 1,050/meeting/person
  • Meeting fee, Committee Chair: EUR 1,050/meeting/person
  • Meeting fee, Committee members: EUR 525/meeting/person

Based on the decision of the General Meeting, each member and the Chairman of the Board of Directors are entitled to receive 40 per cent of their annual compensation in DNA shares. Such acquired shares are measured at fair value at acquisition date. The shares may not be pledged or transferred during board membership, and certain conditions apply to the transferability of shares.

Travel expenses will be reimbursed in accordance with the Decision of the Tax Administration on tax-exempt allowances for travel expenses in force from time to time.

Board of Directors' compensation in 2016 a and 2015*

Name Annual compensation, € Meeting fees, € In total, €
2016 2015 2016 2015 2016 2015
Pertti Korhonen (member since December 1, 2016) 8,997 - 5,250 - 14,247 -
Jarmo Leino 110,276 144,000 25 725 14,811 136,001 158,811
Jukka Ottela 37,967 48,000 23 100 14,722 61,067 62,722
Anssi Soila (member until 26 March 2015) - 12,080 - 2,100 - 14,180
Kirsi Sormunen 48,240 48,240 26,775 18,900 75,015 67,140
Anu Nissinen 36,392 48,000 23,625 15,247 60,017 63,247
Tero Ojanperä 36,152 48,000 19,950 8,707 56,102 56,707
Margus Schults (member since 26 March 2015) 36,152 48,000 21,000 8,707 57,152 56,707

* Annual compensations presented in the table below are paid compensations during the calendar year and can diff er from the decisions of AGM due to timing of the payment.

 

Shares held by members of the Board on December 31, 2016

Name Shares
Pertti Korhonen 11,001
Jarmo Leino 26,450
Anu Nissinen 15,917
Tero Ojanperä 10,440
Jukka Ottela 19,241
Margus Schults 6,875
Kirsi Sormunen 2,000

 

Shareholders’ Nomination Committee

In accordance with the decision of the General Meeting, the Chairperson of the Shareholders' Nomination Committee will be paid EUR 1,050 for each meeting of the Nomination Committee and other members will be paid EUR 525 per each meeting of the Nomination Committee.

Compensation of the CEO and the Executive Team

The Board of Directors decides on the CEO’s and Executive Team’s compensation. The Board of Directors has established a Compensation Committee to prepare, among other things, matters relating to the compensation of the CEO and members of the Executive Team. Short-term incentives comprise performance-based payments in accordance with the annual target and performance-based payments that are based on the annual targets specified by the Board of Directors of the Company. Share-based reward systems serve as long-term incentives. The General Meeting decides on such share purchase authorisations and share issue authorisations.

The compensation of the CEO and the Executive Team of DNA is based on a monthly salary, performance-based payment according to DNA’s incentive and performance-based payment scheme and a share-based reward system.

CEO

Annual salary

The salary of the CEO consists of a total salary (which includes monetary salary and customary fringe benefits, such as a potential car benefit and mobile phone benefit) as well as long-term and short-term incentive schemes. The fixed annual salary of the CEO amounts to EUR 346,440 and the taxable annual fringe benefits amount to EUR 13,800.

Short- and long-term incentive schemes

The performance-based payments for the CEO are based on company-level targets that are related to the development of cash flow and service net sales as well as customer satisfaction. The targets support DNA's strategy and long-term realisation of DNA's financial success. The fulfilment of the criteria are monitored annually, and the maximum amount of the annual performance-based payment can be equal to nine months' fixed monetary salary for the DNA's CEO.

The CEO participates in the Share-Based Compensation Plan that was established on November 20, 2014. The plan is described in more detail below under Incentive Schemes. The maximum possible compensation payable to the CEO on the basis of the Share-Based Compensation Plan is 216,000 shares.

The long-term share-based incentive scheme, described in more detail below under Incentive Schemes, is effective from January 1, 2017.

Pensions and terms related to the end of service relationship

The CEO’s period of notice is six months for both the company and the CEO. If the contract is terminated due to a reason attributable to DNA, the CEO is entitled to severance pay that equals the CEO’s total salary for eight months in addition to the six months' salary paid during the notice period.

The CEO has the right to retire at the age of 60. Supplementary pension rights are payment-based. The premium share of the CEO's and his deputy' supplementary pension is 20% of their fixed annual salary.  The CEO’s pension includes vested rights, which are fully vested in 6 years after joining the supplementary pension scheme.

The premium of the CEO’s supplementary pension amounted to EUR 68,901 in 2015.

Other Executive Team members of DNA

Annual salary

The members of the Executive Team receive a total salary (which includes monetary salary and customary fringe benefits, such as a potential car benefit and mobile phone benefit) as well as long-term and short-term incentives. The total annual fixed monetary salary of the Executive Team members amounts to EUR 1,333,430 and the total annual taxable fringe benefits amount to EUR 33,419 (the CEO's salary and taxable fringe benefits are excluded from the figures).

Short- and long-term incentive schemes

The performance-based payments for the management are based on company-level targets that are related to the development of cash flow and service net sales as well as customer satisfaction. The targets support DNA's strategy and long-term realisation of DNA's financial success. The fulfilment of the criteria are monitored annually, and the maximum amount of the annual performance-based payment can be equal to seven months' fixed monetary salary for a member of DNA's Executive Team.

The Executive Team members participate in the Share-Based Compensation Plan that was established on November 20, 2014. The plan is described in more detail below under Incentive Schemes. The maximum possible compensation payable to the Executive Team members on the basis of the Share-Based Compensation Plan is 522,000 shares in total (excluding the compensation of the CEO).

The long-term share-based incentive scheme for DNA's top management and certain other key person, described in more detail below under Incentive Schemes, enters into force on January 1, 2017.

Pensions and terms related to the end of service relationship

The Executive Team members have the right to retire at the age of 62. Supplementary pensions of the members of DNA's Executive Team are payment-based. The premium share of the Executive Team members' supplementary pension is 8 % of their fixed annual salary. The Executive Team members’ pensions include vested rights, which are fully vested in 6 years of participating in the supplementary pension scheme. The total payments for the Executive Team members’ supplementary pensions amounted to EUR 165,534 in 2015.

The notice period of the employment relationships of the Executive Team members if six or three months for both parties. If DNA terminates the agreement, the Executive Team member is entitled to a termination compensation corresponding to a six months' salary of an Executive Team member in addition to the pay for the period of notice.

Compensation of the CEO and the Executive Team in 2016 and 2015

  Name Wages and salaries, €   Performance-based payment for the results, € Fringe benefits, € In total, €  
2016 2015   2016 2015 2016 2015 2016 2015
  CEO, Jukka Leinonen 361,110 367,740   166,431 162,108 12,930 13,500 540,471  543,348
  Other members of the Executive Team 1,405,940 1,383,699   492,324 438,349 33,613 34,158 1,931,878  1,856,206

Incentive schemes

Share-Based Compensation Plan

On November 20, 2014, the Board of Directors of DNA resolved to implement a long-term share-based compensation plan for the top management and other selected key employees of DNA, based on the development of company share value. In total, 35 people are participants in the plan. Participants have the opportunity to receive a reward in the form of the company’s shares or as cash in connection with a stock exchange listing or an exit by the largest shareholders. The reward will consist of two shares per each subscribed share (base component). In a stock exchange listing, the value of the reward is based on the listing price of the share, and will entitle each participant to up to 14 shares per each share already held in accordance with the terms and conditions of the Share-Based Compensation Plan.

A maximum total of 1,920,000 new shares can be issued under the plan. The maximum total, which was previously 128,000 new shares, has been adjusted pursuant to the terms and conditions of the plan following the resolution of the company’s extraordinary general meeting on October 25, 2016 regarding share split. If the performance-based portion of the share-based compensation plan would become fully payable, participants would be entitled to a total of 1,614,000 shares in the company, of which an estimate of no more than 807,000 shares would be given after withdrawing taxes. Any shares that participants may be entitled to pursuant to the share-based compensation plan will be awarded approximately a year following the listing. There are no restrictions on the ownership or transferability of the shares received on the basis of the scheme after they have been paid for.

Receiving of shares under the share-based compensation plan is tied to, among other things, the continuance of the participant’s employment or service in DNA upon the listing.

New Share Based Incentive Schemes

Long-term incentive schemes

On October 20, 2016, the Board of Directors of the Company resolved to implement a new long-term share-based incentive scheme for the top management and other selected key employees of DNA, effective from January 1, 2017. The new share-based incentive scheme is performance based. The participants of the new share-based incentive scheme have the right to receive shares based on the achievement of preset performance criteria, which will be determined separately for each individual included in the scheme and primarily measured over a three-year period.

In total, approximately 50 people are expected to become participants of the performance-based incentive scheme. The maximum reward under the three-year scheme is estimated to be approximately EUR 5 million and the reward may be paid in shares or in cash in the company’s discretion. Any reward that the participants may be entitled to pursuant to the new share-based incentive scheme will be awarded after the third calendar year of the entry into force of the scheme. Receiving any reward is conditional upon the continuance of the participant’s employment in DNA at the payment date of the reward.

In addition, the Board of Directors has decided to carry out a conditional share-based compensation plan, which will be used as a tool for supplementary incentivisation in special circumstances, such as in connection with transactions and recruitments. The conditional share-based compensation plan consists of a three-year earning period and does not include any special performance criteria. Receiving the reward is conditional upon the continuance of the participant’s employment in DNA throughout the validity of the scheme. Typically, only a few individuals are included in the conditional scheme annually.

Short-term incentive scheme

The Board of Directors of the Company resolved on October 20, 2016 that a bridge element between DNA’s long-term share-based compensation plan launched in 2014 and the new long-term share-based incentive scheme will be covered with an adjusted short-term incentive earning opportunity (bridge plan) for the years 2017 and 2018. Decisions regarding the 2017 short-term incentive scheme will be made by the Board of Directors of the Company by the beginning of 2017.

Shares held by company management on December 31, 2016

Name Shares
Jukka Leinonen 24,501
Timo Karppinen 12, 200
Pekka Väisänen 10,000
Hannu Rokka 4,500

ARTICLES OF ASSOCIATION OF DNA OYJ 

1 TRADE NAME AND DOMICILE OF THE COMPANY
The trade name of the company is DNA Oyj, and it is domiciled in Helsinki. The parallel trade name of the com-pany in English is DNA Plc and in Swedish DNA Abp.

2 LINE OF BUSINESS
The line of business of the company is general telecommunications and the provision of data communications, ICT, entertainment and television services. The company also imports equipment, devices, accessories and software and acts as a trader and an intermediary. In addition, the company provides consulting and services related to the above-mentioned operations as well as telephone and other types of communications. The com-pany also has the right to offer payment services. The payment services provided by the company are listed in the register of payment service providers of the Financial Supervisory Authority. The company may own real estate and securities, engage in securities trading and conduct investment and finance operations that support the company’s line of business.

3 BOARD OF DIRECTORS
The Board of Directors, which is elected at the General Meeting, is responsible for the administration and the appropriate organisation of the company's operations. The Board of Directors comprises a minimum of five (5) and maximum of nine (9) ordinary members. The term of office of a member of the Board of Directors expires at the end of the first Annual General Meeting following the election. The Board of Directors elects the chairman from among the members for each term of office. The Board of Directors is deemed to constitute a quorum when more than half of the members of the Board of Directors are present.

4 CEO
The company has a CEO who is appointed by the Board of Directors.

5 INCLUSION IN THE BOOK-ENTRY SYSTEM
The shares of the company are in the book-entry securities system.

6 REPRESENTATION OF THE COMPANY
The company is represented by the CEO and the Chairman of the Board of Directors, each acting alone, and by two members of the Board of Directors acting together.

The Board of Directors may grant the right to represent the company and procurations to other persons.

7 AUDITORS
The company has one (1) auditor, which shall be an audit firm with a responsible auditor who shall be an au-thorised public accountant. Their term of office of the auditor is the financial period, and the auditor's duty shall expire at the end of the first Annual General Meeting following the election.

8 NOTICE OF GENERAL MEETING AND ADVANCE REGISTRATION
The notice convening a General Meeting shall be delivered to the shareholders by publishing it on the compa-ny's website no earlier than three (3) months and no later than three (3) weeks before the General Meeting, however, never later than nine (9) days before the record date of the General Meeting. To be entitled to attend the General Meeting, shareholders must register with the company by the date specified in the notice, which shall be no earlier than ten (10) days before the General Meeting.

9 ANNUAL GENERAL MEETING
The Annual General Meeting must be held within six (6) months of the end of the financial period, at a date specified by the Board of Directors.
Items on the agenda of the Annual General Meeting shall include:
the presentation of
1. the financial statements and report of the Board of Directors;
2. the auditors’ report;
decisions on
3. the adoption of the financial statements, which, in the parent company, also involves the adoption of the consolidated financial statements;
4. the use of the profit shown on the balance sheet;
5. discharging the Members of the Board of Directors and the CEO from liability;
6. the number of members of the Board of Directors;
7. the compensation of the members of the Board of Directors and the auditor;
the election of
8. the members of the Board of Directors;
9. the auditor; and
consideration of
10. any other business specified in the notice of the meeting.

10 FINANCIAL PERIOD
The company's financial period is one calendar year.