Remuneration

Investors

Remuneration

The key principles of Nightingale’s remuneration are transparency, market-orientation, and remuneration based on good performance of both the individual employee and the company. Nightingale’s remuneration principles apply to the entire personnel.

The objective of Nightingale’s management remuneration is to encourage and reward the management for work that is in line with Nightingale’s strategy at a given time and for compliance with the set rules, as well as to motivate them to strive for the success of Nightingale.

Nightingale presents the company’s remuneration policy for the first time to the Annual General Meeting 2021.

Remuneration report 2020–2021

Remuneration of The Board of Directors

Decisions concerning the remuneration of the Board are made by the General Meeting for a single term of office at a time based on a proposal of the Board.

The remuneration of the Board can consist of one or more components. The members of the Board can, for instance, be paid an annual or a monthly fee as well as a meeting fee for board meetings or committee and governing body meetings.

The members of the Board may be compensated for travelling expenses and/or other costs directly incurred by the board work. The compensation paid to the Chairman of the Board may be higher than the fees paid to other members of the Board.

The members of the Nightingale’s Board are not eligible for short-term incentive plans based on their position as a member of the Board.

No annual remuneration and meeting fees were paid to the members of the Board of Directors for the financial years ended 30 June 2018, 30 June 2019 and 30 June 2020. The Extraordinary General Meeting held on 18 February 2021, resolved that each member of the Board of Directors be paid a remuneration of EUR 2,000 a month.

Board remuneration in financial year 2020 – 2021

Starting 1 March 2021, each Board member has been paid a monthly remuneration totalling EUR 8,000 during the financial year ended 30 June 2021, with the exception of Timo Soininen whose aforementioned remuneration, a total of EUR 8,000, is estimated to be paid in October 2021.

No separate fees for Board meetings have been paid to Board members during the financial period 1 July 2020 – 30 June 2021.

Remuneration based on the employment or service contract of the Chairman or members of the Board and advisor remuneration

The remuneration of the CEO is described below in section ”Remuneration of CEO”.

The remuneration based on the employment of CTO Antti Kangas, who is also a member of the Board, consists of a fixed salary, which during the financial year was EUR 86 thousand. The salary includes vacation pay and taxable fringe benefits. In addition to the fixed salary, Kangas was not paid other remuneration during the financial year.

Chairman of the Board Timo Soininen works, in addition to his role as Chairman, at Villagecape Ventures Oy, which provides the company consultancy services related to business development. Based on the agreement between the company and Villagecape Ventures Oy, the company pays Villagecape Ventures Oy a monthly consultancy fee of EUR 4,000 (excluding VAT) starting 1 April 2021. The fee for 1 April 2021 – 30 June 2021 is estimated to be paid in October 2021. Villagecape Ventures Oy is a company under the influence of Soininen, but he does not exercise control over the company. 

Remuneration of CEO

The remuneration of the CEO and the terms applicable to the service contract of the CEO are prepared by the Board. The service contract is approved by the Board.

The remuneration of the CEO consists of a monthly salary, employee benefits, and performance-based incentive programs. The remuneration of the CEO may include supplementary pension arrangement and severance payment.

The incentive programs consist of a long-term share-based incentive plan and a short-term performance bonus plan based on reaching targets set by the Board.

The CEO’s contract may be terminated by the CEO with four (4) months’ notice and by the company with 0–2 months’ notice, and the contract includes non-competition, non-recruitment and non-solicitation obligations that remain in force for 24 months from the date the company gives the termination notice to the CEO. If the CEO’s contract is terminated by the company, the company shall pay the CEO a severance payment corresponding to the CEO’s salary for 24 months. The CEO’s contract will automatically expire without any notice period when the CEO reaches the applicable minimum age for retirement.

The CEO’s fixed annual salary for the financial period 1 July 2020 – 30 June 2021 was EUR 219 thousand including vacation pay and taxable fringe benefits.

Proportional shares of fixed and variable remuneration

During the financial period, the CEO was not paid other remuneration in addition to the fixed annual salary. There have been no material changes to the remuneration of the CEO after 30 June 2020.

The Board of Directors decided at the end of the financial period 1 July 2020 – 30 June 2021 on paying a bonus to the CEO corresponding to four months’ salary, in total EUR 68 thousand , based on the outstanding execution of the company’s strategy and growth plans and achievement of the following strategic objectives of the company: completing three financing rounds during the financial period, including the IPO, negotiating and closing strategic agreements with Estonian Biobank, Terveystalo, the largest healthcare provider in Finland and with Weavr Health Corp. The bonus was paid to the CEO in September 2021.

In the financial period 1 July 2020 – 30 June 2021, variable remuneration was 24% of total remuneration.  

Remuneration of management team

The CEO determines the salary, remuneration and other benefits of the Nightingale’s management team. The remuneration of the members of the management team is based on a total remuneration, which may among other things include both variable and fixed components of remuneration as well as personnel benefits.

A notice period between 1-3 months applies to the Management Team.

The salaries, remuneration and other benefits (excluding pension expenses and other incidental expenses) of the Management Team (excluding the CEO) totaled EUR 552 thousand during the financial year ended 30 June 2020. The salaries, remuneration and other benefits include bonuses paid to the Management Team, in total EUR 71 thousand, based on outstanding execution of the company’s strategy. There have been no material changes to the remuneration of the Management Team after 30 June 2020.

Incentive programs

Nightingale has established option programs as incentive programs for personnel of the company, covering employees of the company and its group companies and other key persons. The company’s Board of Directors has outlined that future option programs of the company must be tied to an increase in the company’s value.

Nightingale has a long-term incentive plan 2021 Board, the CEO and Key Management Incentive Program, in which the vesting of options is determined based on the company’s market value. The incentive plan has no time-based vesting rights. The Board of Directors may link the stock options to three vesting events at the Board’s discretion as follows:

·       1/3 of the total number of stock options subject to authorisation must be linked to the vesting event when the company’s market value is between EUR 500 million and EUR 1,500 million;

·       1/3 of the total number of stock options subject to authorisation must be linked to the vesting event when the company’s market value is between EUR 1,500 million and EUR 3,000 million; and

·       1/3 of the total number of stock options subject to authorisation must be linked to the vesting event when the company’s market value is between EUR 3,000 million and EUR 5,000 million.

All options under the 2021 Board, the CEO and Key Management Incentive Program entitle the option holder to subscribe for Series B shares at a subscription price that corresponds to the subscription price of the offer shares, i.e. EUR 6.75 per share. The purpose of the option program is to bind the option holders to the economic growth of the company and to the development of the company’s share value as well as create a long-term relationship between the company and the option holders, which benefits the company both economically and operationally. 

2020 Chairman’s Options 

The company and the Chairman of the Board have entered into a Chairman’s Agreement on 7 September 2020 according to which the Chairman has been granted 1,362,025 contractual stock options entitling to new shares of the Company. Each stock option entitles the Chairman to subscribe for one (1) Series A share in the company with a subscription price of EUR 1.63 per share. In addition, the Chairman has the right to stock options 

·       equaling to 1 per cent of the company’s shares on fully diluted basis shall be vested based on reaching target valuation, i.e. the company’s pre-money valuation in connection to a financing round, trade sale or IPO exceeding EUR 500 million; and 

·       the right to stock options equaling to 1 per cent of the company’s shares on fully diluted basis shall be vested based on reaching target valuation, i.e. the company’s pre-money valuation in connection to a financing round, trade sale or IPO exceeding EUR 1 billion 

In case the chairmanship ends, the Chairman shall maintain the right to subscribe for shares with the stock options that have vested before the end of the chairmanship in the Board of Directors. 

2020 Board Member Options 

The company and the Board Member Leena Niemistö have entered into a Board Member Agreement on 15 December 2020, according to which the Board member has been granted 231,770 contractual stock options entitling to new shares of the company. Each stock option entitles the Board Member to subscribe for one (1) Series A share in the company with a subscription price of EUR 2.48 per share. In addition, Leena Niemistö has the right to Stock Options 

·       equaling to 0,5 per cent of the company’s shares on fully diluted basis shall be vested based on reaching target valuation, i.e. the company’s pre-money valuation in connection to a financing round, trade sale or IPO exceeding EUR 500 million; and 

·       the right to stock options equaling to 0,5 per cent of the company’s shares on fully diluted basis shall be vested based on reaching target valuation, i.e. the company’s pre-money valuation in connection to a financing round, trade sale or IPO exceeding EUR 1 billion 

In case the board membership ends, Leena Niemistö shall maintain the right to subscribe for shares with the stock options that have vested before the end of the board membership. 

Stock options granted under the 2021 Board, the CEO and Key Management Incentive Program

The company’s Board of Directors has on 3 March 2021 resolved to issue 5,200,000 option rights entitling to subscribe for 5,200,000 new Series B shares in the company. The first part of the options vest when the company’s market capitalisation is at least EUR 500 million based on 45-day volume weighted average purchase price (the “First Vesting Event”). The second part of the options vest when the company’s market capitalisation is at least 1 000 million based on 45-day volume weighted average purchase price (the “Second Vesting Event”). 

The company’s Board of Directors decided to issue to Tom Jansson and Lotta Kopra 1,200,000 option rights in aggregate, 600,000 option rights to each, each of which entitles to subscribe for one Series B share. At the First Vesting, Tom Jansson and Lotta Kopra are both entitled to subscribe for Series B shares in the company that correspond to 0.3 per cent of the company’s outstanding shares on a fully diluted basis. At the Second Vesting Event, Tom Jansson and Lotta Kopra are both entitled to subscribe for Series B shares in the company that correspond to 0.3 per cent of the company’s outstanding shares on a fully diluted basis. 

All options under the 2021 Board, the CEO and Key Management Incentive Program entitle the option holder to subscribe for Series B shares at a subscription price that corresponds to the subscription price of the offer shares, i.e. EUR 6.75 per share. The purpose of the option program is to bind the option holders to the economic growth of the company and to the development of the company’s share value as well as create a long-term relationship between the company and the option holders, which benefits the company both economically and operationally. 

2021 CEO options

The company’s 2021 Board, the CEO and Key Management Incentive Program is described in the previous section. The option holders earn the right to subscribe for the first part of the options when the company’s market value exceeds EUR 500 million based on 45-day volume weighted average share price (“First Vesting Event”). The option holders earn the right to subscribe for the second part of the options when the company’s market value exceeds EUR 1,000 million based on 45-day volume weighted average share price (“Second Vesting Event”).

The company’s Board of Directors decided to issue to Teemu Suna 2,000,000 option rights, each of which entitles to subscribe for one Series B share. At the First Vesting Event, Teemu Suna is entitled to subscribe for Series B shares in the company that correspond to one per cent of the company’s outstanding shares on a fully diluted basis. At the Second Vesting Event, Teemu Suna is entitled to subscribe for Series B shares in the company that correspond to one per cent of the company’s outstanding shares on a fully diluted basis.  

All options under the 2021 Board, the CEO and Key Management Incentive Program entitle the option holder to subscribe for Series B shares at a subscription price that corresponds to the subscription price of the offer shares, i.e. EUR 6.75 per share. The purpose of the option program is to bind the option holders to the economic growth of the company and to the development of the company’s share value as well as create a long-term relationship between the company and the option holders, which benefits the company both economically and operationally. 

2021 Key Management Options

The company’s Board of Directors decided to issue to Satu Saksman and Minja Salmio 2,000,000 option rights in aggregate, 1,000,000 option rights to each, each of which entitles to subscribe for one Series B share. At the First Vesting Event, Satu Saksman and Minja Salmio are both entitled to subscribe for Series B shares in the company that correspond to one half per cent of the company’s outstanding shares on a fully diluted basis. At the Second Vesting Event, Satu Saksman and Minja Salmio are both entitled to subscribe for Series B shares in the company that correspond to one half per cent of the company’s outstanding shares on a fully diluted basis. 

All options under the 2021 Board, the CEO and Key Management Incentive Program entitle the option holder to subscribe for Series B shares at a subscription price that corresponds to the subscription price of the offer shares, i.e. EUR 6.75 per share. The purpose of the option program is to bind the option holders to the economic growth of the company and to the development of the company’s share value as well as create a long-term relationship between the company and the option holders, which benefits the company both economically and operationally.