Of the annual remuneration, 40 percent was paid in class B shares of KONE Corporation and the rest in cash. It was also confirmed that a meeting fee of EUR 500 is paid for each meeting of the Board and its committees but anyhow EUR 2,000 fee per those Committee meetings for the members residing outside of Finland. Board members’ travel expenses and daily allowances are compensated in accordance with the company’s travel expense policy.
Compensation and other benefits of the Chairman
The compensation for Antti Herlin, full-time Chairman of the Board, consists of a basic salary and a yearly bonus decided by the Board on the basis of the Group’s financial result. The yearly bonus may not exceed 100 percent of the recipient’s annual salary. In 2017, Antti Herlin’s basic salary was EUR 468,488. In addition, his accrued bonus for 2017 totaled EUR 399,152. He was also paid EUR 60,500 as compensation for serving as Chairman of the Board. Antti Herlin’s holdings of shares are presented in the Corporate Governance Statement 2017.
The full-time Chairman’s retirement age and pension are determined in accordance with Finland’s Pensions Act. No separate agreement regarding early retirement has been made.
President and CEO
Henrik Ehrnrooth serves as KONE Corporation’s President and CEO.
Compensation and other benefits of the President and CEO
The President and CEO’s compensation consists of a basic salary and a yearly bonus determined annually by the Board on the basis of the Corporation’s key targets. The yearly bonus may not exceed 100 percent of the recipient’s annual salary.
Henrik Ehrnrooth’s annual base salary is EUR 750,000. In addition, his accrued bonus for 2017 totaled EUR 540,750. Henrik Ehrnrooth’s holdings of shares is available in the Corporate Governance Statement 2017.
Henrik Ehrnrooth is included in the share-based incentive plan for the Group’s senior management. The potential bonus is based on the growth in KONE’s net sales and operating profit. In April 2017, on the basis of the incentive plan for the year 2016, Henrik Ehrnrooth received a bonus of EUR 3,322,885 which consisted of 36,715 KONE class B shares together with a cash bonus to cover taxes and similar charges arising from the receipt of shares. The corresponding bonus accrued from 2017 and due for payment in April 2018 is 35,031 KONE class B shares together with a cash bonus to cover taxes and similar charges arising from the receipt of shares.
Henrik Ehrnrooth’s retirement age and pension are determined in accordance with Finland’s Pensions Act. No separate agreement regarding early retirement has been made. Should his employment contract be terminated before retirement, he has the right to the equivalent of 18 months’ salary, which includes the salary for a six-month term of notice.
Executive Board
KONE’s Executive Board consists of President and CEO and 13 Members. Henrik Ehrnrooth serves as President and CEO. The other members of Executive Board are Max Alfthan, Axel Berkling, Klaus Cawén, Hugues Delval (from February 1, 2017), Ilkka Hara, Thomas Hinnerskov, William Johnson, Mikko Korte, Heikki Leppänen, Pierre Liautaud, Tomio Pihkala, Susanne Skippari (from February 1, 2017), and Larry Wash. During the year, Executive Board members also included Pekka Kemppainen (until January 31, 2017) and Kerttu Tuomas (until January 31, 2017).
Compensation and other benefits of the Executive Board
The compensation for the members of the Executive Board comprises a base salary and a yearly bonus, based on the Group’s annual result and the achievement of personal targets. The bonus amount is determined by the Nomination and Compensation Committee and may not exceed 50 percent of the annual salary.
The Executive Board members’ holdings of shares is available in the Corporate Governance Statement 2017.
The members of the Executive Board are included in the share-based incentive plan for senior management. In April 2017, on the basis of the incentive plan, the members of the Executive Board received a bonus of 246,323 KONE class B shares together with a cash bonus equal to the amount required to cover taxes and similar charges arising from the receipt of shares. The corresponding bonus accrued from 2017 and due for payment in April 2018 is 182,169 KONE class B shares together with a cash bonus equal to the amount of taxes and similar charges. No separate agreement regarding early retirement has been made for the members of the Executive Board. The compensation for the termination of the employment contract prior to retirement is a maximum of 15 months’ salary, which includes the salary for a six-month term of notice.
Auditing
KONE Corporation’s Auditors are Niina Vilske, Authorized Public Accountant, and PricewaterhouseCoopers Oy, Authorized Public Accountants. The fees paid to companies in the PricewaterhouseCoopers chain for 2017 were EUR 4.0 million for auditing and EUR 0.9 million for other consulting services.
Insiders
The holdings of the Board of Directors and Management of KONE on December 31, 2017 and the changes occurring in them during the financial year are presented in the Corporate Governance Statement 2017.
(Updated on January 26, 2018)
