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32 Related party transactions
The Group is controlled by the State of Finland, which owns 50.1% of the Company's shares. The remaining 49.9% of shares are widely held.
The group has a related party relationship with its subsidiaries, associates, joint ventures (Note 33) and with the members of the Board of Directors, the President and CEO and other members of the Neste Executive Board (key management persons), close members of the families of the mentioned key management persons and entities controlled or jointly controlled by the mentioned key management persons or close members of those persons' families.
Parent company of the Group is Neste Oil Corporation. The transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated during consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. All transactions between Neste Oil and other companies controlled by the State of Finland are on an arm's length basis.
Transactions carried out with related parties
2013 Sales of goods and services Purchases of goods and
services
Receivables Financial income and expense Liabilities
Associates - - 0 - -
Joint ventures 121 89 8 0 12
121 89 8 0 12
2012 Sales of goods and services Purchases of goods and
services
Receivables Financial income and expense Liabilities
Associates 0 - 0 - 0
Joint ventures 102 90 6 0 15
102 90 6 0 15
There were no transactions with key management persons or entities controlled by them.
The major part of business between Neste Oil and its joint venture, Nynas, comprises sales of bitumen production from the Naantali refinery to Nynas based on a long term agreement. Process oils were sold from the Porvoo refinery to Nynas.
Key management compensation
EUR thousand 2013 2012
Salaries and other short-term employee benefits 3,605 3,453
Statutory pensions 175 177
Supplementary pensions 1,049 760
Share-based payments 749 -
Total 5,578 4,390
Key management consists of the members of the Board of Directors, President and CEO and other members of the Neste Executive Board. Key management compensation includes termination benefits. There were no outstanding loan receivables from key management on 31 December 2013 or 31 December 2012.
The amounts of share participations granted to the President and CEO and other members of the Neste Executive Board based on Managament Performance Share Arrangements have been disclosed in Note 31, Share based payments.
Compensation to President and CEO and Board of Directors
EUR thousand 2013 2012
Matti Lievonen, President and CEO 844 862
Board of Directors at 31 December 2013
Jorma Eloranta, chairman as of 28 March 2012 76 73
Maija-Liisa Friman, vice chairman as of 28 March 2012 59 57
Per-Arne Blomquist, as of 4 April 2013 44 -
Michiel Boersma 58 58
Laura Raitio 47 46
Willem Schoeber, as of 4 April 2013 43 -
Kirsi Sormunen, as of 4 April 2013 36 -
Former Board members
Timo Peltola, chairman until 28 March 2012 - 19
Nina Linander, until 4 April 2013 14 58
Hannu Ryöppönen, until 4 April 2013 14 57
Markku Tapio, until 4 April 2013 11 47
Board of Directors, all members total 402 415
Compensation to the Board of Directors include annual remuneration and meeting fee paid to each member of the Board for each meeting attended as well as for any meetings of the Board committees attended. Board members are not covered by the Company’s remuneration systems and do not receive any performance- or share-related payments.
Should the Company decide to give notice of termination, the President & CEO shall be entitled to his salary during the six-month period of notice, together with a severance payment equivalent to 18 months’ salary.
The retirement age of the President & CEO is 60 years, and his pension is based on a defined benefit plan. The pension paid is 60% of his or her retirement salary, equivalent to a monthly salary calculated on the basis of statutory pension insurance contributions made over the previous 10 years. The pension is insured by an insurance company, and insurance contributions paid during 2013 totaled EUR 525 thousand (2012: EUR 464 thousand). Net liability of defined benefit plan on 31 December 2013 was EUR 192 thousand. Statutory pension insurance contributions in 2013 were EUR 55 thousand. (2012: EUR 56 thousand).
Net liability of defined benefit plans of former Presidents and CEOs on 31 December 2013 were EUR 1,155 thousand.