Kesko's year 2007

Year 2007
Divisions The Group Financial statements Further information
The Chair of the Board of Directors’ Compensation Committee was
Heikki Takamäki, with Pentti Kalliala and Keijo Suila as members. The
Committee met four (4) times during the year.
Attendance of Board members at the meetings of the Board of
Directors and its Committees in 2007:
Audit
Compensation
Board Committee Committee
Attend-
ance
% (all)
Attend-
ance %
(all)
Kalliala, Pentti 7/8 4/4 88 92
Kokkila, Ilpo 8/8 100 100
Näkyvä, Maarit 7/8 5/5 88 92
Paatelainen, Seppo 8/8 5/5 100 100
Suila, Keijo 8/8 5/5 4/4 100 100
Säilä, Jukka 8/8 100 100
Takamäki, heikki 8/8 4/4 100 100
Board of Directors’ fees
Kesko’s Board member fees have been paid as monetary compensation.
The monthly and meeting fees paid to the Board members in 2007
totalled €291,500 (€274,060 totally in 2006), of which fees paid to
Audit Committee members accounted for €10,000 (€8,840) and the
fees paid to Compensation Committee members for €6,000 (€3,000).
No company shares, stock options or other special rights to company
shares have been distributed to Board members. Kesko has given no
loans to its Board members or no guarantees or other contingent liabilities
for them.
Based on a decision made by the Annual General Meeting
on 26 March 2007, the monthly and meeting fees paid in 2007
were the following:
Monthly fees Fee per month, €
Chair of the Board 5,000
Deputy Chair of the Board 3,500
Board member 2,500
Meeting fees Fee per meeting, €
Fee for Board meeting 500
Fee for Committee meeting 500
Fee for Chair of a Committee meeting if he/she is
not also Chair or Deputy Chair of the Board 1,000
Board members are also entitled to daily allowances and compensation
for travelling expenses in accordance with the general travel rules of
Kesko.
Further information about the members of the Board of Directors and
the fees paid to them is available on pages 66–67 and at www.kesko.fi.
Board of Directors’ monthly and meeting fees 2003–2007:
Monthly fees Fee per month, €
2006–2007 2003–2005
Chair of the Board 5,000 3,800
Deputy Chair of the Board 3,500 2,400
Board member 2,500 2,000
61
Meeting fees Fee per meeting, €
2006–2007 2003–2005
Fee for Board meeting 500 420
Fee for Committee meeting 500 420
Fee for Chair of a Committee
meeting if he/she is not also Chair
or Deputy Chair of the Board 1,000 420
Evaluation of independence
Kesko’s Board of Directors elected at the Annual General Meeting on 27
March 2006 evaluated the independence of the company’s Board members
and its significant shareholders, in accordance with item 18 of the
Corporate Governance Recommendation, most recently on 26 March
2007. Based on the evaluation, the following persons were found to be
independent of the company: Keijo Suila, Deputy Chairman of the
Board of Directors, and Ilpo Kokkila, Maarit Näkyvä and Seppo
Paatelainen, Board members. The following persons were dependent on
the company: Heikki Takamäki, Chairman of the Board of Directors,
and Pentti Kalliala and Jukka Säilä, Board members. Pentti Kalliala,
Jukka Säilä and Heikki Takamäki are K-retailers, who have a chain
agreement with a Kesko Group company.
The Board of Directors evaluated that all its members were independent
of significant shareholders of the company as referred to in
the Corporate Governance Recommendation.
President and CEO
In 2007, the salaries, bonuses and fringe benefits paid to Matti Halmesmäki,
President and CEO, who started in the position at the beginning
of March 2005, totalled €736,060 (€598,200 in 2006), of which
regular salaries accounted for €500,680 (€446,880), the 2006 bonus
paid under the performance-based bonus system for €216,000
(€132,000) and fringe benefits for €19,380 (€19,320).
The President and CEO was paid the maximum bonus for 2006,
which equalled his regular salaries for 6 months. Kesko’s Board of
Directors will make a decision on the 2007 bonuses in spring 2008.
During the year, the President and CEO sold 10,000 stock options
2003E and 42,000 stock options 2003F. At the end of the year, he held
50,000 stock options 2007A, the subscription period for which will
begin on 1 April 2010.
The retirement ages of the President and CEO is 60 years and his
full pension is 66% of the pensionable salary. The President and CEO’s
notice period is 6 months. A severance pay paid in addition to the salaries
for the period of notice corresponds to 12 months’ salary.
Corporate Management Board
Starting from 1 June 2007, the Corporate Management Board has comprised
Chairman Matti Halmesmäki, Kesko’s President and CEO, and
members Terho Kalliokoski, President of Kesko Food Ltd; Jari Lind,
President of Rautakesko Ltd; Matti Leminen, President of Anttila Oy;
Pekka Lahti, President of VV-Auto Group Oy, as well as Arja Talma,
Senior Vice President, CFO; Riitta Laitasalo, Senior Vice President,
Human Resources; and Paavo Moilanen, Senior Vice President, Corporate
Communications and Responsibility, of Kesko. Juhani Järvi, the