35. Related party transactions

SATO's related parties include the parent company SATO Corporation, its subsidiaries and associated companies. In addition, SATO's related parties include shareholders that have control or joint control over, or significant influence on, the reporting entity, as well as persons who are members of the key management personnel of the reporting entity or a parent of the reporting entity. Shareholders with holdings of 20% or more are automatically considered related parties. Shareholders whose ownership is less than 20% are considered related parties when they have significant influence on the reporting entity through, for example, a position on the Board of Directors.

Shareholders that are considered as SATO's related parties in 2016 are Balder Finska Otas AB (owner: Fastighets Ab Balder, 100%), Stichting Depositary APG Strategic Real Estate Pool (owner: Stichting Pensioenfonds ABP, >95%; manager: APG Asset Management NV) and Elo Mutual Pension Insurance Company.

The members of the Board of Directors of SATO, CEO and the members of the Corporate Management Group and the entities controlled or jointly controlled by them are considered as SATO's related parties. Also close members of their family are considered as related parties. The Corporate Management Group comprises of SATO Corporation’s President and CEO, Vice Presidents, Director of Marketing and Communications and Chief Financial Officer.

Related party transactions consist of rental agreements and insurance payments. The terms and conditions used in the related party transactions are equivalent to the terms used in transactions between independent parties.

The following transactions were made with related parties:

1 Jan-31 Dec 2016 1 Jan-31 Dec 2015
Transactions with related parties

Rental agreements
0.0 0.2
Insurance payments
0.0 1.0
0.0 1.1

1 Jan-31 Dec 2016 1 Jan-31 Dec 2015
Management employee benefits

Salaries and other short-term employee benefits
1.8 1.5
Other long-term employee benefits
0.9 0.9
2.7 2.4

1 Jan-31 Dec 2016 1 Jan-31 Dec 2015
Salaries and remuneration paid

President and CEO
0.3 0.5
Deputy to President and CEO
0.4 0.3
Members of the Board of Directors
0.2 0.2
0.9 1.0

Thousand EUR
1 Jan-31 Dec 2016 1 Jan-31 Dec 2015
Compensation paid to the members of the Board of Directors and the President & CEO

Saku Sipola
304 38
Erik Selin
40 4
Jukka Hienonen
29 25
Esa Lager
29 40
Tarja Pääkkönen
27 25
Timo Stenius
26 19
Marcus Hansson
20 0
Andrea Attisani
16 24
Ilkka Tomperi
6 24
Erkka Valkila
0 442
Niina Rajakoski
0 19
Juha Laaksonen
0 7
Vesa Immonen
0 5
Timo Hukka
0 4
496 676

Persons employed by the Group are not paid separate remuneration when serving as a member of the Board of Directors or as a President of a Group company.

Acting Deputy Managing Director was covered by the supplementary pension insurance, which has ended on 31 December 2015. The supplementary pension insurance entitles the covered person to retirement at the age of 60 and to a pension equal to 60% of the pensionable salary. The retirement took place in late 2016.

The members of SATO's Corporate Management Group are covered by an annual incentive scheme based on SATO's profit and fulfilment of the key targets for their respective area of responsibility. The Board of Directors approves the payment of bonuses.

The Board of Directors have decided on a long-term incentive scheme with a maximum limit for the periods 2014–2016, 2015–2017 and 2016–2018. The incentive scheme applies to 15 people working in management positions in SATO. The purpose of the incentive scheme is to align the goals of the management with those of the shareholders, engaging key people, improvement of competitiveness and promotion of long-term financial success.