Independent of the company, but not independent of its significant shareholders.
Tomas von Rettig is a shareholder and member of the Board of Rettig Capital Oy Ab,
an indirect parent company of Anchor Oy, which is a significant shareholder of eQ Plc.
Shares and share-related rights of the Board members and entities that they control
in the company at the end of the financial period on 31 December 2021:
Member of the Board SecurityHolding
Nicolas BernerShare,
Georg EhrnroothShare,,
Timo KokkilaShare,
Lotta KopraShare
Janne Larma
Option right
Share
,
,,
Tomas von RettigShare,
Operations of the Board of Directors
eQ Plc’s Board of Directors has drawn up a written charter covering its operations.
Below is a list of the most important principles and duties presented in the charter.
In order to carry out its duties, the Board of Directors:
• confirms the company values and manners of operating and monitors their
implementation
• confirms the company’s basic strategy and continuously monitors that it is
up-to-date
• based on the strategy, approves the annual plan of operation and budget and
supervises their outcome
• reviews and approves the interim reports, report by the Board of Directors and
financial statements
• defines the company’s dividend policy and makes a proposal on dividend
distribution to the AGM
• convenes General Meetings
• makes proposals to the General Meeting, when necessary
• decides on major investments, corporate acquisitions and divestments and on
investments that exceed two million euros
• confirms the organisation structure
• appoints and dismisses the CEO
• sets personal targets for the CEO annually and assesses their outcome
• appoints and dismisses the members of the Management Team, defines their areas
of responsibility and decides on the terms of their employment
• decides on so called unconventional related party transactions that are not
conducted in the ordinary course of eQ’s operation and which are not made on
ordinary commercial terms
• monitors and assesses related party transactions at least once a year
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
• reviews the Remuneration Policy for Governing Bodies of eQ at least once a year
and presents the policy to the General Meeting of the company for consideration
at least every four years
• reviews eQ Group’s remuneration principles at least once a year
• decides on the incentive schemes and annual bonuses of the CEO and the
personnel
• goes through the major risks related to the company’s operations and their
management at least once a year and gives instructions on them to the CEO,
when necessary
• meets the auditors at least once a year
• convenes at least once a year without the executive management
• assesses its own operations at least once a year
• assesses the independence of its members
• confirms its own charter, which is reviewed annually
• handles other matters that the Chair of the Board or the CEO has proposed to
the agenda of a Board meeting; the directors also have the right to put matters on
the Board agenda by informing the Chair of this.
During the financial period 2021, the Board of Directors of eQ Plc convened ten (10)
times, average attendance being 98%. Attendance at the Board meetings 2021:
Member of the Board
Nicolas Berner
/
Georg Ehrnrooth /
Timo Kokkila/
Lotta Kopra/
Janne Larma/
Tomas von Rettig/
The majority of the members of eQ Plc’s Board of Directors are independent of the com-
pany and half of the members of the Board are independent of the company’s significant
shareholders. The Board of Directors assesses the independence of the directors and
states on the company website which of the directors have been deemed independent.
When evaluating independence, the circumstances of private individuals or legal enti
-
ties regarded as related parties will be taken into consideration in all situations. Compa-
nies belonging to the same group as a company are comparable with that company.
Principles on the diversity of the Board of Directors
The Board’s aim is to promote, for its part, the diversity of the Board’s composition.
When assessing diversity, the Board takes into consideration, for instance, the age
and gender of the directors, their education and professional experience, personal
qualities and experience that is essential with regard to the task and the company
operations. Regarding the equal representation of genders on the Board, eQ Plc has
defined as its goal that there should always be representatives of both genders on
eQ Plc’s Board of Directors. The Board aims at reaching this goal and maintaining it
primarily by informing eQ Plc’s owners actively about it. During the financial period
2021, eQ Plc’s Board met the preconditions of diversity set by the company, including
the goal of having representatives of both genders on the Board. The directors have
versatile experience in sectors that are of importance to the company operations,
such as the investment and financial sector and real estate sector. In addition,
the work experience and education of the directors as well as their international
experience complement each other. The directors are elected by eQ Plc’s AGM.
The Board of Directors of the company has monitored the development of the
company’s diversity during the financial period 2021.
CEO and his duties
The CEO is in charge of the day-to-day administration of the company in accordance
with the rules and regulations of the Finnish Limited Liability Companies Act and
instructions and orders issued by the Board of Directors. The CEO may take measures
that, considering the scope and nature of the operations of the company, are unusual
or extensive with the authorisation of the Board. The CEO ensures that the account
-
ing practices of the company comply with the law and that finances are organised in
a reliable manner. eQ Plc’s Board of Directors appoints the CEO.
Mikko Koskimies, M.Sc. (Econ) (born 1967) was appointed the CEO of eQ Plc on 1
April 2021 and he has been the CEO of eQ Asset Management Ltd since 2012.
Key positions of trust: St1 Nordic Corporation, member of the Board, 2007–; Urlus-
Säätiö Sr, Chair of the Board, 2012–.
Primary work experience: eQ Asset Management Ltd, CEO, 2012–; Pohjola Bank,
member of the Executive Committee and Executive Director responsible for asset
management business unit and Pohjola Asset Management Ltd, Managing Director,
2005–2012; Alfred Berg Asset Management Ltd, Managing Director, 1998-2005;
Nordea Group, several positions in senior management, 1989–1997, of which Merita
Bank Luxembourg S.A., 1993–1997.
Prior to 1 April 2021, the CEO of the Company was the company’s current full-time
Chair of Board Janne Larma. The company discloses the same biographical details
and information on the holdings of the CEO as of the directors.
eQ Plc does not have substitute for the CEO.
Shares and share-related rights of the CEO and entities that he controls in eQ Plc at
the end of the financial period on 31 December 2021:
NameTask in the organisationSecurityHolding
Mikko
Koskimies
CEO2018 Option right
Share
,
,,
Other Management Team members
eQ Group has a Management Team that convenes regularly every month. The status
of the Management Team is not based on company law, but in practice it has a
significant role in the organisation of the company management. The Management
Team consists of the persons heading the company’s operative business, the CFO and
Group General Counsel. The main duty of the Management Team is to assist the CEO.
eQ Group’s Management Team on 31 December 2021:
Mikko Koskimies, born 1967, M.Sc. (Econ), Chair, eQ Plc, CEO (from 1 April 2021) and
eQ Asset Management Ltd, CEO
Staan Jåfs, born 1974, M.Sc. (Econ), eQ Asset Management Ltd, Head of Private Equity
Antti Lyytikäinen, born 1981, (M.Sc. (Econ), eQ Plc, CFO
Juha Surve, born 1980, Master of Laws, M.Sc. (Econ), eQ Asset Management Ltd,
Group General Counsel
Shares and share-related rights of the other Management Team members and entities
that they control in eQ Plc at the end of the financial period on 31 December 2021:
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
NameTask in the organisationSecurityHolding
Staan JåfsDirector, Private Equity,
eQ Asset Management Ltd
2018 Option right
Share
,
,
Antti
Lyytikäinen
CFO, eQ Plc2018 Option right
Share
,
,
Juha SurveGroup General Counsel,
eQ Asset Management Ltd
2018 Option right
Share
,
,
Descriptions of Internal Control Procedures and
theMain Features of Risk Management Systems
Control and risk management related to the financial reporting process
The objective of the financial reporting process is to produce timely financial infor-
mation and to ensure that decision-making is based on reliable information. The aim
is to ensure that the financial statements and interim reports are prepared according
to applicable laws, generally accepted accounting principles and other requirements
on listed companies.
The financial reporting process produces eQ Group’s monthly and quarterly reports.
The Management Team of the Group reviews eQ Group’s result and financial
performance monthly. The Group management presents the result and financial
position of the Group quarterly to the Board of Directors. The Board of Directors of
eQ Plc supervises that the financial reporting process produces high-quality financial
information. The CEO is responsible for eQ Group’s internal risk management.
The Group’s subsidiaries report their results monthly to the parent company. The
financial administration of the Group takes care of the bookkeeping of the subsidi
-
aries. At Group level, this will make it easier to ensure that the financial reporting of
the subsidiaries is reliable. The Group’s interim reports and financial statements are
prepared in accordance with the IFRS reporting standards. The financial administra
-
tion of the Group monitors the changes that take place in IFRS standards.
Based on risk assessments, the company has developed measures for controlling the
risks pertaining to financial reporting, which make sure that financial reporting is
reliable. The companies use various reconciliations, checks and analytical measures,
for instance. The financial administration of the Group prepares monthly analyses
of income statement and balance sheet items, both at company and segment level.
In addition, tasks related to risk-exposed work combinations are separated, and
there are appropriate approval procedures and internal guidelines. The reliability
of financial reporting is also supported by various system controls in the reporting
systems. Other basic principles of control are a clear division of responsibility and
clear roles as well as regular reporting routines.
Risk management overview
The purpose of the Group’s risk management is to make sure that the risks associ-
ated with the company’s operations are identified, assessed and that measures are
taken regarding them. eQ Plc’s Board supervises that the CEO takes care of eQ Plc’s
day-to-day administration according to the instructions and orders issued by the
Board. The Board also supervises that risk management and control are organised
in a proper manner. The executive management is responsible for the practical
implementation of the risk management process and control.
eQ Group comprises a fully owned subsidiary of eQ Plc, eQ Asset Management Ltd,
which is an investment firm. A permanent risk management function is responsible
for risk management at eQ Asset Management Ltd. The risk management function,
which is independent of the other operations, consists of risk experts and is led by
the Chief Risk Ocer. eQ Asset Management has a risk management committee,
which the Chief Risk Ocer convenes regularly. The risk management committee
reviews the follow-up reports of risk management-related operations and decides on
corrective measures, for instance. It also approves new products, changes made in
products and counterparties.
General description of internal control
eQ Plc’s Board of Directors is responsible for arranging sucient and well-function-
ing internal control. Internal control covers all functions within eQ Group, which
means that eQ Plc steers and controls the operations of the subsidiaries in order to
make sure that the result of its operations is reliable. The business operations are
steered by the Group’s operating principles, decision-making powers and company
values that cover the entire Group. eQ Plc takes into account the Group structure
and the nature and extent of the operations when arranging internal control.
eQ Group’s internal control system covers financial and other control. Internal
control is carried out by the Board, CEO and other superior management as well as
the entire personnel. The aim of internal control is to make sure that the operations
of the entire Group are ecient and contribute to the achievement of the goals and
targets, reporting is reliable and that the Group follows laws and other regulations.
In addition, the aim of internal control is to ensure that information, eQ Plc’s assets
and client assets are secured in a sucient manner and that internal procedures and
information systems are arranged properly and in order to support operations.
eQ Group has a notification channel through which an employee can report mis-
demeanors or other misconduct within the eQ Group anonymously and confidentially
(eQ Whistleblower). Authorized persons process notifications and only they have
access to the information in the notifications. The notification channel was
improved during 2021 so that the channel is now entirely on a server outside the
company and allows for discussions with an anonymous notifier.
Internal control is above all based on financial reports, management reports, risk
reports and reports of internal control. The company’s central operations are steered
according to internal operating policies and practices.
Other Information to be Provided in the CG Statement
Internal audit
The Group does not have a separate internal audit organisation. The CEO together
with the heads of the business units, is responsible for the day-to-day supervision of
the company’s operational business in the first line, and the Risk Management and
Compliance unit, which is independent of the business, oversees the operations in
the second line and reports directly to the Board, if necessary. The CEO may assign
external evaluators to carry out audits on areas that the CEO deems necessary. The
CEO reports the observations to the Board of Directors.
Principles concerning related party transactions
eQ’s Group Administration is responsible for managing related party matters at
Group level and for maintaining the related party register, in accordance with
principles on the management of related party matters approved by eQ Plc’s Board
of Directors. The management of each company that is a member of the Group is
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
responsible for ensuring that any related party transactions at the Group are made
in accordance with the approved principles. At eQ Group, all business transactions
within the Group and related party transactions are always made on arm’s-length
terms and as part of the company’s normal business operations. Group companies
can oer their services to related party individuals or organisations under their
control or influence on market terms, and ordinary assignments are implemented
in the ordinary course of business of the company. Related party transactions are
allowed, provided that they promote the purpose and interest of the company and
are commercially justified.
The Board of Directors regularly monitors and evaluates transactions between
eQ Plc and the company’s related parties, and assesses how contracts and other
legal transactions made between the company and its related parties meet the
requirements on the ordinary course of business and arm’s-length terms. Primarily,
all related parties are personally responsible for ensuring that eQ is informed of any
related party transactions they make. eQ also monitors related party transactions
on a business segment basis, and eQ Plc’s CFO is responsible for reporting related
party transactions to the Board of Directors annually. Related party transactions
that are not conducted in the ordinary course of eQ’s operation and which are not
made on ordinary commercial terms are “unconventional business transactions”.
Only eQ Plc’s Board of Directors can make decisions on implementation of uncon
-
ventional business transactions. The Board of eQ Group’s parent company always
decides on all related party loans to related parties or entities outside the eQ Group.
eQ complies with the obligations of the Finnish Corporate Governance Code 2020
for listed companies and the IFRS standards (IAS 24) on related party disclosures.
As required by the standard, eQ discloses, in the consolidated financial statements
or separate financial statements, the related party relationships and transactions
and outstanding balances of the parent company or an investor with joint control
or significant control over the investment target with related parties, which are
presented in accordance with the IFRS. eQ also discloses in the company’s annual
report information to be presented on the basis of the Finnish Limited Liability
Companies Act, concerning loans, liabilities and commitments to related parties and
the main terms thereof, if the business transactions are material and implemented
on unconventional terms.
eQ Plc publishes, by a stock release, related party transactions that are significant
for the company’s shareholders.
Central procedures of insider administration
In its insider administration, eQ Plc complies with the applicable Finnish and EU
legislation (including the Market Abuse Regulation 596/2014), rules and regulations
issued by the Finnish Financial Supervisory Authority as well as the Guidelines for
Insiders issued by the Helsinki Stock Exchange (insider regulations). eQ Plc has
drawn up guidelines on insider issues and trading. The company has informed the
company management, insiders and persons covered by the trading restriction of the
insider guidelines.
Managers and persons closely associated with them are obliged to inform the
company and the Financial Supervisory Authority of their trading in company shares
or other financial instruments. The company discloses the information that it has
received without delay with a stock exchange release. At eQ, such managers (cov
-
ered by the disclosure obligation) are the CEO and directors as well at the members
of the Management Team appointed by the Board. eQ maintains a list of managers
and persons closely associated with them. This list is not an insider list.
The company maintains insider lists required by insider regulations of persons who
have access to inside information. These lists are not public. The information on
eQ Plc’s managers required by regulations and the insider lists are maintained by
Euroclear Finland Ltd. The information in the insider lists is available to the Financial
Supervisory Authority for the supervision of the securities market.
eQ’s permanent insiders are only persons who, due to their tasks or position, have per-
manent access to all inside information in the listed company and who have the right to
make decisions on the company’s future development and the arrangement of business.
eQ’s permanent insiders comprise the directors, CEO and the members of the Group’s
Management Team appointed by the Board of Directors. In addition to insider lists, eQ
maintains a list of persons covered by the so-called extended trading restriction.
eQ Plc’s closed period commences 30 days prior to the disclosure of an interim report
(first and third quarter), half-yearly report or financial statements report and ends at
the end of the day of the disclosure.
The company has informed the company management, insiders and persons covered
by the extended trading restriction of the insider guidelines. The company has a
designated person in charge of insider issues (Compliance Ocer), who carries
out tasks related to the management of insider issues, training in insider matters,
maintenance of the insider lists and the supervision of trading. The knowledge of
other employees about insider matters is maintained and their need of training
assessed continuously.
Audit
Election of the Auditors
The proposal for the election of an auditor prepared by the Board of Directors of
the company is disclosed in the notice of the General Meeting. If the Board has not
arrived at a decision on the prospective auditor by the time the notice is sent, the
candidacy will be disclosed separately.
The Board of eQ Plc organized a statutory audit firm appointment procedure in
accordance with the EU Audit Regulation (537/2014) for the audit of the financial
year 2021. Following a comprehensive assessment based on selection criteria, KPMG
Oy Ab was the Board’s primary recommendation for an auditor for a term ending at
the end of the Annual General Meeting 2022. The company’s Annual General Meet
-
ing elected KPMG Oy Ab as auditor in accordance with the Board’s recommendation.
In 2021, the company auditor was KPMG Oy Ab, a firm of authorized public account
-
ants, with Tuomas Ilveskoski, APA, as auditor with main responsibility.
KPMG Oy Ab has acted as eQ Plc’s auditor since 2014 and Tuomas Ilveskoski, APA,
has acted as auditor with main responsibility since the Annual General Meeting
2021. The decision on continuing with the period of the auditor with main responsi
-
bility and the auditing firm is made annually at the AGM, and the auditor with main
responsibility and the auditing firm are changed at least in accordance with the valid
regulations.
Auditors’ fees
The independent auditors have been paid the following fees in 2021: for the audit
and closely related services a total of EUR 47,600 (2020: EUR 93,871) and for other
services than audit a total of EUR 8,200 (2020: EUR 14,093).
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
Introduction
This remuneration report for governing bodies has been drafted in accordance with
the instructions concerning remuneration in the Finnish Corporate Governance Code
2021 for Finnish listed companies. In 2020, the remuneration for the Board of Direc
-
tors and the CEO of eQ Plc was in compliance with the company’s remuneration
policy for governing bodies.
The remuneration system shall support eQ Group’s long-term goals, such as
improving the profitability of the business in a long term, sucient capital adequacy,
return on investments and cost eciency. In eQ Group, the aim of the remuneration
system is also to encourage and reward the employees for their personal perfor
-
mance and contribution to the development of eQ Group’s profitability and for acting
in accordance with eQ Group’s strategy. Further, the aim is to commit the employees
to act in accordance with the strategy, goals, values and long-term benefits of the
eQ Group.
eQ Group’s strong financial performance during the last five years is reflected in the
remuneration of the CEO, particularly in the increase of the variable remuneration
components. The following table presents the remuneration development for the
Board of Directors and CEO in comparison to the average remuneration development
for the Group’s employees and the Group’s economic development for the previous
five financial years.
Salary and
remuneration - EUR
CEO,,*,,,,
change, %%%%%%
Chair of the Board,**,,,,
change, %%%%-%%
Other Board members,***,,,,
change, %%%%%%
Board, in total,,,,,
change, %%%%%%
Employee, in average,,,,,
change, %%%%%%
Operating profit - MEUR.....
change, %%%%%%
* includes CEO Janne Larma from 1 January to 31 March 2021 and CEO Mikko Koskimies from 1 April to 31
December 2021
** includes, in addition to the remuneration paid on the basis of Board membership, the salary based on
the service contract of Janne Larma, the full-time Chair of the Board, as of 1 April 2021
*** The number of Board members increased by one in 2021
Remuneration of the Board of Directors
Compensation and remuneration of the Board
The Annual General Meeting decides upon the remuneration of the Board of Direc-
tors. In 2021, the Annual General Meeting decided that the members of the Board
of Directors shall receive remuneration according to following: Chair of the Board
5,000 euros per month, Vice Chair of the Board of Directors receives 4,000 euros per
month and the directors 3,000 euros per month. The Annual General Meeting also
decided that the directors shall be paid EUR 500 for each Board meeting that they
attend. The travel and lodging costs of the Board members shall be compensated
in accordance with the company’s expense policy. The remuneration is paid in
cash. The full-time Chair of the Board has entered into a service contract with
the company and is paid a fixed salary in cash (monthly salary and fringe benefits)
in addition to the remuneration paid on the basis of the Board’s membership. The
full-time Chair of the Board is not covered by the eQ Group’s performance-based
annual bonus scheme.
Remuneration Report for Governing Bodies 2021
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
In 2021, the members of the Board of Directors have been paid remuneration as
follows:
Remuneration
- EUR
Annual
remuneration
Meeting
fees in total
Other
compensationTotal
Nicolas Berner,,-,
Georg Ehrnrooth,,-,
Timo Kokkila,,-,
Lotta Kopra,,-,
Janne Larma*,,,**,
Tomas von Rettig,,-,
Total,,,,
* Full-time Chair of the Board as of 1 April 2021, Remuneration paid to Janne Larma from 1 January to 31
March 2021 is shown in more detail below under the CEO’s remuneration information.
** Salary paid to the full-time Chair of the Board as of 1 April 2021
The full-time Chair of the Board’s participation in the option programs
Based on the service contract, the full-time Chair of the Board may be granted
shares, options or other share-based rights as part of the long-term commitment
scheme. The other members of eQ Plc’s Board of Directors have no share-related
rights, nor are they covered by any other remuneration system.
The eQ Group has an option program 2018, on the basis of which eQ Group has
issued option rights and option subscription rights to key persons, which aim for
long-term commitment to the company. In accordance with the terms and condi
-
tions of the option program for 2018, the options have a three-year retention period
after which they are available for subscription. The terms and conditions contain no
other special terms related to ownership.
The full-time Chair of eQ Plc’s Board of Directors is covered by the 2018 option
program and has initially received 100,000 option rights as part of the commitment
plan.
The share subscription period for the option program 2018 begins on 1 April 2022
and ends on 1 April 2024.
Remuneration of the CEO
The salary of the CEO and other benefits
The Board of Directors appoints the CEO and decides on the CEO’s salary, benefits
and other terms related to the CEO’s service. It is important for the company that
the salary of the CEO is competitive, as the commitment of the CEO and sucient
incentives are vital with regard to the company’s success.
The remuneration of the CEO consists of a fixed salary in cash (monthly salary and
fringe benefits) and an annual performance bonus. The amount of the annual bonus
is determined based on achievement of personal goals and the result of eQ Group. eQ
Plc’s Board decides on the amount and distribution of the annual bonuses taking into
consideration, e.g. the above presented main principles of remuneration.
According to the regulations in force at the time of payment of the variable
remuneration accrued in 2020 and paid in 2021, if the variable remuneration
component of the CEO has exceeded EUR 50,000 annually, 50 per cent of the
variable remuneration has been deferred to be paid during the following three years
(even payments each year). 50 per cent of the deferred remuneration has been linked
to the development of eQ Plc’s share price during the deferral period. eQ Plc’s Board
shall annually decide on the interest possibly payable to the remaining part of the
deferred remuneration. With the change in the remuneration regulations, the part
of the variable remuneration in excess of EUR 50,000 for variable remuneration
accrued in 2021 and to be paid in 2022 will no longer be deferred to be paid during
the following three years.
In 2021, the CEOs were paid the following salaries and other remuneration:
Remuneration paid during 2021 - EUR
Fixed remuneration Variable remuneration
Annual salary
(incl. fringe benefits)
Part of the overall
remuneration Annual bonus*
Part of the overall
remuneration
Granted
share-related rights Total
CEO Janne Larma
1 Jan – 31 Mar120,55121%454,32079%-,
CEO Mikko Koskimies
1 Apr – 31 Dec459,818100%-0%-,
Total580,36956.1%454,32043.9%-,,
* Represents the aggregate amount of bonuses paid in 2021. The earnings periods for the bonuses paid in 2021 are defined in the table below. The annual bonus paid to the CEO is always based on the preceding year’s
performance.
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
The table below presents the earnings periods for the variable remuneration paid
to the CEO Janne Larma in 2021 (deferred remuneration falling due for the previous
years):
Specification of variable remuneration paid during 2021 - EUR
For year
2020*
For year
2019*
For year
2018*
For year
2017*Total
211,23874,671104,05064,361,
* The annual bonus of the CEO is always based on the preceding year’s performance.
The following table presents the remuneration to the CEO Janne Larma falling
due (including deferred variable remuneration), which has not yet been paid on 31
December 2021. The unpaid deferred variable remuneration for each earnings period:
Deferred variable remuneration* - EUR
For year 2018For year 2019 For year 2020Total
302,642201,089145,435,
* Including changes in stock prices and dividend consideration.
The variable remuneration to be due of the CEO Mikko Koskimies that has been
earned during 2021 and not yet been paid out by the date of this report was
EUR 789,758 in aggregate.
The terms of the CEO’s service are specified in the CEO’s service contract. Both
parties may give notice on the CEO’s service contract with a period of notice of six
months. When notice is given by the company for whatever reason or if the contract
is terminated through mutual agreement by the company and the CEO, the CEO is
entitled to a severance pay corresponding to his or her overall remuneration for six
months preceding the termination of the contract, which is paid on the day when
the contract is terminated.
The retirement age and pension of the CEO are determined in accordance with the
Finnish Employees Pensions Act. The CEO does not have a supplementary pension
scheme.
The CEO’s participation in the option programs
eQ Group has option program 2018, based on which, eQ Group has issued option
rights and option subscription rights to key persons, which aim for long-term com
-
mitment to the company. In accordance with the terms and conditions of the option
program 2018, the options have a three-year retention period after which they are
available for subscription. The terms and conditions contain no other special terms
related to ownership.
As part of the engagement system, the CEO is covered by the option program and
has initially received 100,000 option rights based on option program 2018.
The share subscription period for the option program 2018 begins on 1 April 2022
and ends on 1 April 2024.
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
Janne Larma
Chair of the Board
Member of the Board since 2021
Born: 1965
Education:
M.Sc. (Econ.), Hanken Svenska handelshögskolan
Primary working experience:
2011–2021 eQ Plc, CEO
2004–2009 eQ Bank, Member of Management Team
2000– Advium Corporate Finance Ltd, Managing Director
1998–2000 Enskilda Securities, management position in
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the catch up accrual...
of which accrual for 2022.
The return estimates that eQ has presented are based on assessments obtained from the target funds’ management companies regarding the funds that are fully invested and where that investment periods of the target funds have ended. Otherwise, the estimates are based on eQ’s own assessment model.
)
The amount of the performance fee that eQ would receive, if the investments of the funds were sold at present market value.
)
Capital covered by the performance fee MEUR 75.
)
Capital covered by the performance fee MEUR 104.
)
First closing.
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
Information about capital adequacy
Capital adequacy management
eQ Group comprises a fully owned subsidiary of eQ Plc, eQ Asset Management Ltd,
which is an investment firm. eQ Asset Management Ltd, as investment firm, and
eQ Plc as the holding company, apply the new IFD/IFR regime for investments firms
which entered into force on 26 June 2021. This section presents information about
the capital adequacy management and calculations of eQ Group (Pillar III).
Capital adequacy management is a central part of pillar 2 of the capital adequacy
regulations. According to them, investment firms are obliged to consider their
capital adequacy in relation to risks in a more extensive manner than just fulfilling
the calculated capital adequacy requirements set out in the first pillar. In the
capital adequacy management process, the company builds a motivated view of
essential risks and the risk-based capital need required by them, which is not the
same as the capital adequacy requirement of pillar 1 and may deviate from it. The
capital adequacy management process deals with risks that are not taken into
consideration in pillar 1 capital adequacy requirements, including qualitative risks.
The capital adequacy management process also takes a stand on the sucient level
of risk management and internal control regarding each separate risk. The capital
adequacy management process is carried out at least once a year and a capital plan
describing the capital need, the suciency of capital and capital adequacy is drawn
up based on the process.
The goals and practises of risk management at eQ Group have been presented in the
Notes to the Financial Statements. Information about the corporate governance
and remuneration in eQ Group can be found as part of the Annual Report and on eQ’s
website.
Capital adequacy
According to the IFR-regulations, the most restrictive capital requirement for eQ
at the end of the financial period is defined on the basis of fixed overheads. The
minimum capital requirement based on fixed overheads was EUR 4.7 million. At the
end of the period, the Group’s own funds based on capital adequacy calculations
totalled EUR 10.8 million. Detailed information on the Group’s capital adequacy can
be found in the following section.
Capital adequacy, EUR 1,000
IFR
Dec.
eQ Group
CRR
Dec.
eQ Group
Equity
,,
Common equity tier 1 (CET1) before deductions
,,
Deductions from CET1
Intangible assets
-,-,
Unconfirmed profit for the period
-,-,
Dividend proposal by the Board*
-,-,
Common equity tier 1 (CET1)
,,
Additional tier 1 (AT1)
Tier 1 (T1 = CET1 + AT1)
,,
Tier 2 (T2)
Total capital (TC = T1 + T2)
,,
Own funds requirement according to the most
restrictive requirement (IFR),-
Fixed overhead requirement
,-
K-factor requirement
-
Absolute minimum requirement
-
IFR
Dec.
eQ Group
CRR
Dec.
eQ Group
Risk-weighted items total – Total risk
exposure,,
Risk-weights, total (CRR)
-,
of which credit risk
-,
of which market risk - currency risk
-,
of which fixed overhead risk
--
Common equity tier (CET1) / own funds
requirement, %.%-
Tier 1 (T1) / own funds requirement, %
.%-
Total capital (TC) / own funds requirement, %
.%-
Common equity tier 1 (CET1) / risk weights, %
.%.%
Tier 1 (T1) / risk weights, %
.%.%
Total capital (TC) / risk weights, %
.%.%
Excess of total capital compared with the
minimum level ,,
Total capital compared with the target level
(incl. a 25% risk buer for the requirement),,
*The dividend and equity repayment proposed by the Board exceeding the profit for the period.
A new IFD/IFR regime for investments firms entered into force on 26 June 2021. The comparison
information on capital adequacy has been presented according to the previous regulations (CRD/CRR).
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
Composition of regulatory own funds (EU IF CC1), 1,000 EUR
(a) (b)
Amounts
Source based on
reference numbers/
letters of the balance
sheet in the audited
financial statements
Common Equity Tier 1 (CET1) capital: instruments and reserves
1
Own funds
,
2
Tier 1 capital
,
3
Common equity tier 1 capital
,
4
Paid up capital instruments
,Row , CC
6
Retained earnings
,Row , CC
8
Other reserves
,Row , CC
11
(-) Total deductions from common equity tier 1
-,
17
(-) Goodwill
-,Row , CC
18
(-) Other intangible assets
-,Rows , and , CC
25
(-) Other deductions
-,
Own funds: reconciliation of regulatory own funds to balance sheet in the audited financial statements (EU IF CC2)
(a) (b)(c)
Balance sheet as in
audited financial statementsUnder regulatory scope of consolidationCross reference to EU IFCC
As at period end, , EURAs at period end, , EUR
Assets - Breakdown by asset classes according to the balance sheet in the audited financial statements
1
Liquid assets
2
Claims on credit institutions
,
3
Financial assets
4
Financial securities
,
5
Private equity and real estate fund investments
,
6
Intangible assets
7
Fair value and brands
,Row , CC
8
Client agreements
Row and , CC
9
Other intangible assets
Row and , CC
10
Tangible assets
11
Right-of-use assets
12
Tangible assets
13
Other assets
,
14
Accruals and prepaid expenditure
15
Income tax receivables
16
Deferred tax assets
17
Total Assets
,
Liabilities - Breakdown by liability classes according to the balance sheet in the audited financial statements
18
Other liabilities
,
19
Accruals and deferred income
,
20
Lease liabilities
,
21
Income tax liabilities
,
22
Total Liabilities
,
Shareholders’ Equity
23
Share capital
,Row , CC
24
Reserve for invested unrestricted equity
,Row , CC
25
Retained earnings
,Row , CC
26
Profit (loss) for the period
,
27
Total Shareholders' equity
,
Audited consolidated balance sheet and regulatory own funds under regulatory scope of consolidation are equal.
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
Own funds: main features of own instruments (EU IF CCA)
1IssuereQ Plc
2Unique identifier ISIN: FI0009009617
3Public or private placementPublic
4Governing law(s) of the instrumentFinnish law, EU's IFR regulation 2019/2033, EU's CRR regulation
575/2013
5Instrument type CET1
6Amount recognised in regulatory capital (MEUR)11,4
7Nominal amount of instrument n/a
8Issue pricen/a
9Redemption pricen/a
10Accounting classificationShareholders' equity
11Original date of issuance1 Nov 2000
12Perpetual or datedPerpetual
13Original maturity date No maturity
14Issuer call subject to prior supervisory approvaln/a
15Optional call date, contingent call dates and redemption
amount
n/a
16Subsequent call dates, if applicablen/a
Coupons / dividends
17Fixed or floating dividend/coupon Floating
18Coupon rate and any related index n/a
19Existence of a dividend stopper No
20Fully discretionary, partially discretionary or mandatory (in
terms of timing)
Fully discretionary
21Fully discretionary, partially discretionary or mandatory (in
terms of amount)
Fully discretionary
22Existence of step up or other incentive to redeemNo
23Noncumulative or cumulativeNon-cumulative
24Convertible or non-convertibleNon-convertible
25If convertible, conversion trigger(s)n/a
26If convertible, fully or partiallyn/a
27If convertible, conversion raten/a
28If convertible, mandatory or optional conversionn/a
29If convertible, specify instrument type convertible inton/a
30If convertible, specify issuer of instrument it converts inton/a
31Write-down featuresn/a
32If write-down, write-down trigger(s)n/a
33If write-down, full or partialn/a
34If write-down, permanent or temporaryn/a
35If temporary write-down, description of write-up mechanismn/a
36Non-compliant transitioned featuresNo
37If yes, specify non-compliant featuresn/a
38Link to the full term and conditions of the instrument
(signposting)
See equity note of the consolidated financial statement
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
To the Shareholders
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
Information to the shareholders
eQ Plc’s share
eQ Plc’s share is traded on Nasdaq Helsinki. At the end of 2021, the company had
had 7,883 shareholders (7,261 shareholders on 31 Dec. 2020). The largest sharehold
-
ers have been presented in the Report by the Board of Directors.
• Symbol: EQV1V
• Sector: Financial Services
• Market capitalisation classification: Mid Cap companies
Why to invest in eQ’s share
eQ Group’s profit growth has been strong and profitability at a good level during the
recent years. eQ aims also in the futuWre in a strong growth, constant cost-e
-
ciency and to pay competitive dividend.
eQ aims at creating value for its shareholders through profitable and growing
business areas. eQ Asset Management has a strong position as a service provider
for the most professional investors in Finland. About 70 per cent of 100 largest
institutional investors in Finland use eQ Asset Management’s services and eQ has
been ranked as No.1 in overall quality (SFR-survey 2021). eQ Asset Management
has an excellent product oering. Demand for alternative investment products such
as real estate and private equity funds in recent years. In the Corporate Finance
-segment advisory services are oered by Advium Corporate Finance, which is one
of the most experienced and highly esteemed advisors in Finland.
20172018201920202021
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
NUMBER OF SHAREHOLDERS
7,883
5,048
5,451
5,945
7,261
20172018201920212020
0
5
10
15
20
25
30
35
SHARE PRICE DEVELOPMENT 2017 TO 2021
EUR
OMXHeQ Plc
eQ in Business Areas Sustainability Report by the Board of Directors Financial Statements Corporate Governance To the Shareholders
Calendar in 2022
In connection with the publication of the financial reports, eQ
will arrange a result presentation for investors, analysts and
representatives of the media. The interim and half year reports will
be available on eQ’s website at www.eQ.fi/en.
eQ also has committed personnel. Personnel owns about 40 per cent of eQ Plc and
personnel’s satisfaction is at an excellent level according to the personnel surveys.
Professional and committed employees are the key to good customer services,
investment operations and advisory.
Annual General Meeting
eQ Plc’s Annual General Meeting (AGM) will be held on Wednesday 23 March 2022.
Detailed information and instructions for participation can be found on the company
website at www.eQ.fi/en.
Dividend distribution
The Board of Directors proposes to the 2022 Annual General Meeting that a dividend
of EUR 0.97 per share be paid out. Additionally, the Board proposes to the AGM that
an equity repayment of EUR 0.03 per share be paid out from the reserve of invested
unrestricted equity. Record date of the dividend and equity repayment is 25 March
2022 and payment date 1 April 2022.
Analysts following eQ Plc
The analysts mentioned below follow eQ Plc. eQ is not responsible for their
comments or assessments.
• Inderes Oy, Sauli Vilén, +358 44 025 8908, sauli.vilen@inderes.fi