Compensations to the key management 

The key management of KONE consists of the Board of Directors and the Executive Board.

1) For the financial year 2008 in addition Antti Herlin’s accrued bonus is EUR 229,559 and Matti Alahuhta’s accrued bonus is EUR 594,371. These will be paid during 2009. In addition, to Matti Alahuhta in April 2008 paid share-based payments for financial year 2007 was EUR 1,803,946.

The compensation for the Chairman, Antti Herlin, consists of a basic salary and a yearly bonus, which is defined by the Board and based on the Corporation’s financial result. This bonus may not exceed 100 percent of his annual salary. In 2008, Antti Herlin’s basic salary was EUR 468,488. In addition, his accrued bonus for the accounting period January 1-December 31, 2008 was EUR 229,559. He was also paid EUR 59,500 as remuneration for serving as Chairman of the Board. Herlin’s holdings of shares and options are presented on Financial Statements at page 59. The Chairman of the Board’s pension and retirement age are determined in accordance with the retirement age legislation in force. No separate agreement has been made regarding early retirement.

The compensation for the President & CEO, Matti Alahuhta, consists of a basic salary and yearly bonus, defined by the Board on the basis of the Corporation’s annual result and other key targets. This bonus may not exceed 100 percent of his annual salary. Matti Alahuhta’s basic salary for 2008 was EUR 722,200. In addition, his accrued bonus for the accounting period January 1-December 31, 2008 totaled EUR 594,371. He was also paid EUR 32,500 as remuneration for serving on the Board. Alahuhta’s holdings of shares and options are presented on Financial Statements at page 59. He is also included in the share-based incentive plan for the company’s senior management. The potential reward is based on the annual growth in KONE’s sales and operating profit. In April 2008, on the basis of the incentive plan, he received a bonus of total value of EUR 1,803,946 including 36,000 KONE class B shares together with a cash bonus to cover the taxes and similar charges arising from the receipt of the shares.

The corresponding bonus accrued from 2008 and to be paid in April 2009 is 21,600 KONE class B shares and a cash bonus to cover the taxes and similar charges arising from the receipt of the shares. As part of his service contract he has possibility to retire at the age of 60 with a retirement pension of 60 percent of his average monthly salary during the past seven earning years. 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 6-month term of notice.

Compensation for members of Executive Board comprises a fixed basic salary and bonus, based on the annual result of the Group 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 and options are presented on Financial Statements at page 59. The Executive Board members are included in the share-based incentive plan. In April 2008, on the basis of the incentive plan, the members of the Executive Board received a bonus of total 158,400 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 2008 is 103,680 KONE class B shares and a cash bonus equal to the amount of taxes and similar charges. No separate agreement has been made regarding early retirement for members of the Executive Board. Compensation for termination of the employment contract prior to retirement is a maximum of 15 months’ salary, which includes the salary for a 6-month term of notice.