SAMPO PLC STOCK EXCHANGE RELEASE 9 February 2022 at 12:30 pm
Proposals of Sampo plc's Board of Directors and its committees to the Annual General Meeting
Sampo plc's Board of Directors and its committees have made the following proposals to the Annual General Meeting to be held on 18 May 2022:
- Proposal of the Board of Directors for distribution of profit
- Proposal of the Nomination and Remuneration Committee for the remuneration of the members of the Board of Directors
- Proposal of the Nomination and Remuneration Committee for the number of members of the Board of Directors and the members of the Board of Directors
- Proposal of the Audit Committee for the remuneration of the Auditor
- Proposal of the Audit Committee for the election of the Auditor
- Proposal of the Board of Directors for authorisation on the repurchase of the company's own shares
The Board proposes to the Annual General Meeting a dividend of EUR 4.10 per share and an authorisation for the Board to decide on repurchasing a maximum of 50,000,000 Sampo A shares using funds available for the profit distribution.
The Nomination and Remuneration Committee of the Board of Directors proposes to the Annual General Meeting that the number of Board members be increased by one and that nine members be elected to the Board. The committee proposes that all current members of the Board be re-elected for a term continuing until the close of the next Annual General Meeting and that Steve Langan be elected as a new member to the Board.
The Nomination and Remuneration Committee of the Board of Directors proposes to the Annual General Meeting that each member of the Board of Directors be paid an annual fee of EUR 98,000 until the close of the next Annual General Meeting and the Chair of the Board be paid EUR 190,000. Furthermore, the Nomination and Remuneration Committee proposes that the members of the Board of Directors and its Committees be paid the following annual fees:
• the Vice Chair of the Board be paid EUR 27,000,
• the Chair of the Audit Committee be paid EUR 27,000, and
• each member of the Audit Committee be paid EUR 6,200.
The proposed increase in the annual fees of the Board members is approximately 3 per cent. In determining the proposed fees, the Committee has considered the effect of financial and insurance regulation on the demands of the Board's work and the annual fees paid to Boards of businesses similar to Sampo Group.
The Board of Directors proposes that the firm of authorised public accountants Deloitte Ltd be re-elected as the Company's auditor for the financial year 2022.
The proposals are attached in full to this release.
SAMPO PLC
Board of Directors
For more information, please contact:
Sami Taipalus
Head of Investor Relations
tel. +358 10 516 0030
Maria Silander
Communications Manager, Media Relations
tel. +358 10 516 0031
Mirko Hurmerinta
IR & Communications Specialist
tel. +358 10 516 0032
Distribution:
Nasdaq Helsinki
London Stock Exchange
The principal media
Financial Supervisory Authority
www.sampo.com
APPENDIX 1
Proposal of the Board of Directors for distribution of profit
Dividend
Sampo Group disclosed on 24 February 2021 a capital management framework designed to ensure high and reliable capital returns supported by a strong but efficient balance sheet. Under the framework, Sampo will return ongoing surplus capital generation from its insurance operations through an insurance dividend. Other forms of surplus capital generation, including possible proceeds from disposals of financial investments, are returned through additional dividends and/or buybacks, to the extent that the funds are not utilised to support business development. Sampo targets a Solvency II ratio of 170 per cent - 190 per cent and financial leverage below 30 per cent.
According to Sampo plc's Dividend Policy published on 6 February 2020, the total annual dividends paid will be at least 70 per cent of Sampo Group's net profit for the year (excluding extraordinary items). For this purpose, "extraordinary items" are defined as accounting items related to the sale of Nordea shares during 2021 and the change in Sampo Group's ownership in Nordax Bank AB.
The parent company's distributable capital and reserves totalled EUR 8,565,347,307.19 of which profit for the financial year 2021 was EUR 2,639,015,210.13. Based on the policies outlined above, the Board proposes to the Annual General Meeting that a total dividend of EUR 4.10 per share be paid to all shares except for the shares held by Sampo plc on the dividend record date of 20 May 2022. The total dividend includes an insurance dividend of EUR 1.70 per share as well as the dividend of at least EUR 2.00 per share that management indicated it will propose in connection with the sale of Nordea shares on 26 October 2021.
As earnings per share excluding extraordinary items amounted to EUR 2.86 per share, the payout ratio for the total dividend equates to 143 per cent. The remainder of the distributable funds are left in the equity capital. After adjusting for the proposed dividend, Sampo Group's 2021 year-end distributable funds amounted to EUR 6,323 million, Group Solvency II coverage to 185 per cent and financial leverage to 27 per cent.
Dividend payment
The dividend is proposed to be paid to the shareholders registered in the Register of Shareholders held by Euroclear Finland Oy as at the record date of 20 May 2022. The Board proposes that the dividends be paid on 31 May 2022.
Financial position
No significant changes have taken place in the company's financial position since the end of the financial year. The company's liquidity position is good and in the view of the Board, the proposed distributions do not jeopardise the company's ability to fulfil its obligations.
Helsinki, 9 February 2022
SAMPO PLC
Board of Directors
APPENDIX 2
Proposal of the Nomination and Remuneration Committee for the remuneration of the members of the Board of Directors
The Nomination and Remuneration Committee of the Board of Directors proposes to the Annual General Meeting that each member of the Board of Directors be paid an annual fee of EUR 98,000 until the close of the next Annual General Meeting and the Chair of the Board be paid EUR 190,000. Furthermore, the Nomination and Remuneration Committee proposes that the members of the Board of Directors and its Committees be paid the following annual fees:
- the Vice Chair of the Board be paid EUR 27,000,
- the Chair of the Audit Committee be paid EUR 27,000, and
- each member of the Audit Committee be paid EUR 6,200.
The proposed increase in the annual fees of the Board members is approximately 3 per cent. In determining the proposed fees, the Committee has considered the effect of financial and insurance regulation on the demands of the Board's work and the annual fees paid to Boards of businesses similar to Sampo Group.
Potential statutory social and pension costs incurring to Board members having permanent residence outside Finland will, according to applicable national legislation, be borne by Sampo plc. In addition, actual travel and accommodation costs incurring to a Board member will be reimbursed.
A Board member shall, in accordance with the resolution of the Annual General Meeting, acquire Sampo plc's A shares at the price paid in public trading for 50 per cent of his/her annual fee after the deduction of taxes, payments and potential statutory social and pension costs. The company will pay any possible transfer tax related to the acquisition of the company shares.
A Board member shall make the purchase of shares during 2022 after the publication of the Interim Statement for January-September 2022 or, if this is not feasible because of insider regulations, on the first possible date thereafter.
A Board member shall be obliged to retain the Sampo plc A shares under his/her ownership for two years from the purchasing date. The disposal restriction on the Sampo shares shall, however, be removed earlier in case the director's Board membership ends prior to release of the restricted shares i.e. the shares will be released simultaneously when the term of the Board membership ends.
Helsinki, 9 February 2022
SAMPO PLC
Nomination and Remuneration Committee
APPENDIX 3
Proposal of the Nomination and Remuneration Committee for the number of members of the Board of Directors and the members of the Board of Directors
The Nomination and Remuneration Committee of the Board of Directors proposes to the Annual General Meeting that the number of Board members be increased by one and that nine members be elected to the Board.
The Nomination and Remuneration Committee of the Board of Directors proposes that all current members of the Board Christian Clausen, Fiona Clutterbuck, Georg Ehrnrooth, Jannica Fagerholm, Johanna Lamminen, Risto Murto, Markus Rauramo and Björn Wahlroos be re-elected for a term continuing until the close of the next Annual General Meeting. In addition, the Committee proposes that Steve Langan be elected as a new member to the Board.
Steve Langan was born in 1960 and has a degree in history and economic history from the University of Glasgow. He has had a highly successful general management and marketing career with Diageo, Coca-Cola, Nestlé and Bass Brewers in the UK, Europe and South America. He has also acted as CEO of the Hiscox UK & Ireland, Asia and USA Groups and Chief Marketing Officer at Hiscox. Steve Langan's complete CV is enclosed to this proposal.
When proposing the composition of the Board of Directors, the aim of the Nomination and Remuneration Committee is to ensure that the Board of Directors as a whole for the purpose of its work possesses the requisite knowledge of and experience in the social, business and cultural conditions of the regions and markets in which the main activities of the Group are carried out. A broad set of qualities is sought for and it is recognised that diversity, including age, gender, geographical provenance and educational and professional background, is an important factor to take into consideration. According to the target set by the Board, each gender shall be represented by at least 37.5 per cent of the members of the Board.
The Committee has assessed that due to the strategic development of Sampo Group, the composition of Sampo plc's Board of Directors shall in addition to the current knowledge emphasise knowledge of the P&C market and the UK's geographical market. Thus, it is proposed to increase the number of Board members to nine members. As a consequence, the composition of the Board would temporarily not fulfil the target of each gender being represented by at least 37.5 per cent of the members of the Board. The Board of Directors remains committed to reaching its target of having both genders represented in the Board and will continue its endeavours to reach the target when proposing candidates for Board membership next time.
All the proposed Board members have been determined to be independent of the company and its major shareholders under the rules of the Finnish Corporate Governance Code 2020.
The CVs of all persons proposed as Board members are available at www.sampo.com/agm.
The Nomination and Remuneration Committee proposes that the Board members elect Björn Wahlroos from among its number as the Chair of the Board and Jannica Fagerholm as its Vice Chair. It is proposed that Christian Clausen, Risto Murto, Markus Rauramo and Björn Wahlroos (Chair) be elected to the Nomination and Remuneration Committee as well as Fiona Clutterbuck, Georg Ehrnrooth, Jannica Fagerholm (Chair), Johanna Lamminen and Steve Langan be elected to the Audit Committee. The compositions of the Committees fulfil the Finnish Corporate Governance Code 2020's requirement for independence.
Helsinki, 9 February 2022
SAMPO PLC
Nomination and Remuneration Committee
Annex: CV of Steve Langan
Annex
Curriculum Vitae
Steve Langan
born 1960
Education
University of Glasgow
• Upper second-class honours (history and economic history) 1982
Career
Hiscox Ltd
• CEO of Hiscox USA 2018-2021
• CEO of Direct Asia Motor Insurance 2014-2016
• CEO of Hiscox Ins. Coy (UK & Europe) 2005-2018
• Group Chief Marketing Officer 2005-2021
• Head of Hiscox Art collection 2017-2021
Diageo plc
• Managing Director, Italy, 2002-2005
• Global Baileys Leadership Team member 2002-2005
• Global Guinness Leadership Team member 1998-2002
• Marketing Director, Guinness UDV Ireland 2000-2002
• Marketing Director, Guinness Ireland Group 1998-2000
The Coca-Cola Co.
• Marketing Director, Coca-Cola Brazil 1997-1998
Bass Brewers Ltd.
• Ales Brand Director 1993-1996
Scottish & Newcastle plc
• Several positions including European Commercial Director, Take Home Trade Marketing Director and Group Marketing Manager 1988-1993
Rowntree Mackintosh plc
• Brand Manager 1983-1988
Previous positions of trust
Hiscox Underwriting Europe Ltd
• Chair of the Bo ard 2013-2018
Hiscox Underwriting Ltd
• Chair of the Board 2008-2014
Hiscox Connect (Brand)
• Chair of the Board 2005-2018
APPENDIX 4
Proposal of the Audit Committee for the remuneration of the Auditor
The Audit Committee of the Board of Directors proposes to the Annual General Meeting that compensation be paid to the company's Auditor against an invoice approved by the company.
As background to the proposal, the Audit Committee states that the Authorized Public Accountant Firm Deloitte Ltd has acted as Sampo plc's Auditor in 2021.
The fees paid to Deloitte Ltd for statutory audit services invoiced in 2021 totaled EUR 290,000. No non-audit services were purchased from Deloitte Ltd during 2021.
The Auditor's fees for services provided to Sampo Group have been presented in note 36 of the annex to the consolidated financial statements.
Helsinki, 9 February 2022
SAMPO PLC
Audit Committee
APPENDIX 5
Proposal of the Audit Committee for the election of the Auditor
The Audit Committee of Sampo plc proposes to the Annual General Meeting on 18 May 2022 that the firm of authorised public accountants Deloitte Ltd be re-elected as the Company's auditor for the financial year 2022. If Deloitte Ltd is elected as Sampo plc's auditor, the firm has announced that APA Jukka Vattulainen will be the auditor with principal responsibility.
In 2021, Sampo plc had an obligation to organise an audit firm selection in accordance with the EU Audit Regulation (Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC, the "Audit Regulation") concerning the audit for the financial year 2021. The Audit Committee arranged the statutory tender of the audit, organised a statutory audit firm selection procedure and prepared its recommendation in accordance with the Audit Regulation. After careful consideration based on the selection criteria, the Audit Committee's primary recommendation for an audit firm for the financial year 2021 was Deloitte Ltd.
The Audit Committee notes that its proposal is free from influence by a third party, and the Audit Committee is not subject to compliance with any such clauses referred to in Article 16(6) of the Audit Regulation that restrict the choice as regards the election of a statutory auditor or audit firm.
Helsinki, 9 February 2022
SAMPO PLC
Audit Committee
APPENDIX 6
Proposal of the Board of Directors for authorisation to decide on the repurchase of the company's own shares
The Board of Directors proposes to the Annual General Meeting that the Annual General Meeting authorise the Board to resolve to repurchase, on one or several occasions, a maximum of 50,000,000 Sampo plc's A shares representing approximately 9 per cent of all outstanding A shares of the company. The repurchased shares will be cancelled.
The shares may be repurchased either through an offer to all shareholders on equal terms or through other means and otherwise than in proportion to the existing shareholdings of the company's shareholders (directed repurchase) if the Board of Directors deems that there are weighty financial reasons for such directed repurchase. Directed repurchases may be carried out, among others, through open market purchases, participation in accelerated book-building processes or through arranging reversed accelerated book-building processes.
The purchase price per share shall be no more than
i) the highest price paid for the company's shares in public trading on the day of the repurchase or the offer to repurchase the company's own shares, or alternatively,
ii) the average of the share prices (volume weighted average price on the regulated markets where the company's share is admitted to trading) during the five trading days preceding the repurchase or the offer to repurchase the company's own shares.
The lowest purchase price per share shall be the price that is 20% lower than the lowest price paid for the company's shares in public trading during the validity of this authorisation until the repurchase or the offer to repurchase the company's own shares.
The repurchases under the authorisation are proposed to be carried out by using funds in the unrestricted shareholders' equity, which means that the repurchases will reduce funds available for distribution of profit.
The Board of Directors shall be authorised to decide on all other terms relating to the repurchase of the company's own shares.
The holder of all of Sampo plc's B shares has given its consent to a buy-back of A shares.
It is proposed that the authorisation be valid until the close of the next Annual General Meeting, however no longer than 18 months from the Annual General Meeting's decision.
Helsinki, 9 February 2022
SAMPO PLC
Board of Directors
