Personnel and remuneration

On 31 December, OP Financial Group had 12,130 employees (12,356). The number of employees averaged 12,174 (12,548). The reorganisation and streamlining measures carried out in OP Financial Group reduced the number of employees during the financial year. Six POP Group banks that have been OP Financial Group member cooperative banks since 19 May 2015 increased the number of employees by 133.

During the financial year, 241 OP Financial Group employees (323) retired, at an average age of 61.5 years (61.7). OP Financial Group’s scheme for variable remuneration comprises short-term company-specific incentives and long- term Group-wide incentives.

The long-term scheme for the entire OP Financial Group consists of a management incentive scheme and a personnel fund for other staff.

The long-term management incentive scheme has been confirmed for 2014–2016. OP Financial Group's personnel fund remuneration scheme will also be extended by one-year performance periods.

In drawing up the Group's incentive schemes, OP has taken account of the regulation regarding the financial sector's remuneration schemes. As a rule, the remuneration scheme for 2014–2016 follows the principles observed during the previous three-year performance period.

OP Cooperative's Supervisory Board has set the following long-term target performance indicators: OP Financial Group's EBT, the Group's CET1 ratio and the growth rate of the number of customers using OP as their main bank and insurer. The Group-level targets are the same both in the management incentive scheme and OP Financial Group’s Personnel Fund.

OP Financial Group's policies worth around EUR 100 million under TyEL (Employees Pensions Act) with Ilmarinen Mutual Pension Insurance Company were transferred to OP Bank Group Pension Fund on 31 December 2015.


Executive Board members’ and Chief Audit Executive’s excutive contracts

Remuneration and other benefits of OP Financial Group's President and Group Executive Chairman, who is also the central cooperative's CEO, and of the other central cooperative's Executive Board members, deputy members and Chief Audit Executive are decided on by the presiding officers of the central cooperative's Supervisory Board. A written executive contract, approved by the Supervisory Board, stipulates the terms and conditions governing each Executive Board member’s, deputy member’s and the Chief Audit Executive’s employment.

Information required by the EU capital requirements regulation and directive concerning the remuneration of OP Financial Group's identified staff are published annually on OP's website.

OP Financial Group’s President and Group Executive Chairman received EUR 754,392 in salary, EUR 21,600 in fringe benefits and EUR 250,100 in bonuses for 2014 based on the short-term scheme, i.e. a total of EUR 1,026,092. In 2015, the amount of deferred bonuses earned for 2011, 2012 and 2013 under the short-term and long-term schemes totalled EUR 671,669.

Other Executive Board members, deputy members and the Chief Audit Executive received a total of EUR 3,205,111 in salary and EUR 159,807 in fringe benefits. The amount of deferred bonuses earned for 2011–2014 under the short-term and long-term schemes totalled EUR 2,340,496. Salaries and bonuses paid to other Executive Board members, deputy members and the Chief Audit Executive totalled EUR 5,705,414.

Salaries and bonuses include the amount of the performance-based bonuses earned for 2011, 2012, 2013 and 2014 and paid in 2015. Payment of performance-based bonuses earned by the President and Group Executive Chairman and Executive Board members for 2014 under the short-term scheme has not been deferred. The deferral procedure is based on a procedure prescribed in the Act on Credit Institutions (610/2014), which is described in Note 59 of OP Financial Group's IFRS Financial Statements on variable remuneration.

Executive Board members' supplementary pension cover has been arranged through OP Bank Group Pension Foundation and supplementary pension taken out with OP Life Assurance Company. The President and Group Executive Chairman, the other Executive Board members, deputy members and the Chief Audit Executive retire at 63.

Supplementary pension insurance costs for 2015 totalled EUR 599,000. In 2015, no costs were recognised under the OP Bank Group Pension Foundation supplementary pension scheme.


Supplementary pension costs have been published in the credit institutions’ remuneration data collected annually by the European Banking Authority (EBA) in accordance with the capital requirements regulation (EU 575/2013) and directive of the (2013/36/EU, CRD IV) of the European Parliament and of the Council.

EUR President, Group Executive Chairman Other Executive Board members, deputy member and Chief Audit Executive Total
Regular pay 754,392 3,205,111 3,959,503
 
Fringe benefits 21,600 159,807 181,407
Short-term performance-based bonus for 2014 250,100 743,262 993,362
Total salaries, bonuses and fringe benefits paid in 2015 1,026,092 4,108,180 5,134,272
Deferred amount of performance-based bonuses, as specified by financial-sector regulations, earned for 2011, 2012 and 2013, and paid in 2015 * 671,669 1,597,234 2,268,903
Total salaries, bonuses and fringe benefits, and deferred performance-based bonuses paid in 2015 1,697,761 5,705,414 7,403,175
       

* Include the amount of performance-based bonuses earned for 2011, 2012 and 2013 and paid in 2015 as well as the amount of long-term performance-based bonuses earned for 2011–2013 and paid in 2015. Of the remaining portion of bonuses earned for 2012 and 2013 has been deferred for payment between 2016 and 2017. Payment of deferred amounts requires a separate decision.

 

The period of notice for the President and Group Executive Chairman, other Executive Board members, deputy members and the Chief Audit Executive is 6 months. Upon termination of employment in cases specifically stipulated in their executive contracts, the President and Group Executive Chairman is entitled to a severance pay and a sum equivalent to a maximum of 12 months’ pay, while other Executive Board members, deputy members and the Chief Audit Executive are entitled to a sum equivalent to a maximum of 6 months' pay.