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The different forms of remuneration used in Sampo Group are fixed and variable remuneration as well as pension and other benefits.
Fixed compensation is the basis of an employee's remuneration package. Fixed salary shall support financial stability by representing a sufficiently high share of the total remuneration. Fixed salary shall be fair and competitive but not leading in the market. As a rule, fixed salary shall be based on the employee's general responsibility level and position in the organization. Local collective agreements set the framework for salary development for most of the Sampo Group employees.
Variable compensation is used to ensure the competitiveness of total remuneration packages. Variable compensation can either be based on the contribution to the company's profitability and on individual performance (short-term incentive programs) or be linked to committing employees to Sampo Group for a longer period and aligning the employees' interests with those of the shareholders by linking the payout to the positive development of the company's share price (long-term incentive schemes).
Variable compensation shall generally be based on a combination of the assessment of the performance of the individual, the business unit and/or business area and of the overall results of the company, the division and/or Sampo Group. The quantitative and qualitative performance criteria and their relative importance shall be determined in advance. Variable compensation shall always include triggers and caps on the payment.
The payment of variable compensation shall be based on the assessment of the incurred risk exposure and the fulfillment of solvency capital requirements. The payment of a certain portion of the variable compensation payable to the Senior Executive Management and to certain key persons shall be deferred for a defined period of time as required in the regulatory framework applicable to each Sampo Group company. After the deferral period, a retrospective risk adjustment review shall be carried out and the Board of Directors of each Sampo Group company shall decide whether the deferred variable compensation shall be paid/released in full, partly or cancelled in whole.
Pensions are based on collective agreements and/or reflect conditions in the relevant labor markets. New pension plans shall be of defined contribution nature.
Other benefits are based on local practices in the relevant labor markets.