General Meeting of shareholders
The Annual General Meeting was held in Helsinki on February 28, 2011.
Board of Directors and committees
The Annual General Meeting elected eight members and one deputy member to KONE’s Board of Directors. The full-time Chairman of the Board of Directors of KONE Corporation is Antti Herlin. Sirkka Hämäläinen-Lindfors is the Vice Chairman of the Board. The other members of the Board are Matti Alahuhta, Anne Brunila, Reino Hanhinen, Juhani Kaskeala, Shunichi Kimura and Sirpa Pietikäinen. The deputy member of the Board is Jussi Herlin.
Of the Board members, Sirkka Hämäläinen-Lindfors, Anne Brunila, Reino Hanhinen, Juhani Kaskeala and Sirpa Pietikäinen are independent of the Corporation. With the exception of Antti Herlin and Jussi Herlin, the other Board members are independent of the Corporation’s significant shareholders.
In 2011, the Board of Directors convened six times with an average attendance rate of 87%. Jukka Ala-Mello serves as Secretary to the Board.
Audit committee
The Board of Directors’ Audit Committee comprises Antti Herlin (Chairman), Sirkka Hämäläinen-Lindfors and Anne Brunila (independent members). The Audit Committee held three meetings in 2011 with an average attendance rate of 89%.
Urpo Paasovaara serves as Head of Internal Control.
Nomination and compensation committee
The Nomination and Compensation Committee comprises Antti Herlin (Chairman), Reino Hanhinen and Juhani Kaskeala (independent members). The Nomination and Compensation Committee held four meetings in 2011 with an average attendance rate of 100%.
Compensation and other benefits of the Board of Directors
The Annual General Meeting of KONE Corporation in March 2010 confirmed the fees of the members of the Board as follows:
| Annual fees |
EUR |
| Chairman of the Board |
54,000 |
| Vice chairman |
44,000 |
| Member |
33,000 |
| Deputy member |
16,500 |
It was also confirmed that a meeting fee of EUR 500 is paid for each meeting of the Board and its committees. 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 Corporation’s financial result. The yearly bonus may not exceed 100 percent of the recipient’s annual salary. In 2011, Antti Herlin’s basic salary was EUR 468,488. In addition, his bonus accrued for 2011 totaled EUR 397,277. 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 table on page 59.
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
Matti Alahuhta 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 decided annually by the Board on the basis of the Corporation’s financial result and other key targets. The yearly bonus may not exceed 100 percent of the recipient’s annual salary.
In 2011, Matti Alahuhta’s basic salary was EUR 722,200. In addition, his bonus accrued for 2011 totaled EUR 649,980. He was also paid EUR 36,000 as compensation for serving on the Board. A regularly updated table on Matti Alahuhta’s holdings of shares is available here.
Matti Alahuhta is included in the share-based incentive plan for the Corporation’s senior management. The potential bonus is based on the growth in KONE’s net sales and operating profit. In April 2011, on the basis of the incentive plan, Matti Alahuhta received a bonus of EUR 2,064,516 which consisted of 25,000 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 2011 and due for payment in April 2012 is 22,380 KONE class B shares together with an estimated cash bonus to cover taxes and similar charges arising from the receipt of shares.
As part of Matti Alahuhta’s contract, he has the possibility to retire in June 2012 at the age of 60 according to his current agreement. Mr. Alahuhta will not exercise this possibility but will continue as KONE Corporation’s President and CEO also after June 2012, when he has the possibility to retire following the term of notice in his service contract. Alahuhta´s retirement pension is 60% of his average monthly salary during his last seven years of earnings. 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 Matti Alahuhta, President and CEO, Klaus Cawén, Henrik Ehrnrooth, Pekka Kemppainen, Anne Korkiakoski, Ari Lehtoranta, Heikki Leppänen, Pierre Liautaud (from April 1, 2011), Juho Malmberg, Eric Maziol (until March 31, 2011), Vance Tang, Kerttu Tuomas and Noud Veeger.
Compensation and other benefits of the Executive Board
The compensation for the members of the Executive Board comprises a basic 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.
A regularly updated table on the Executive Board members’ holdings of shares and options is available here.
The members of the Executive Board are included in the share-based incentive plan for senior management. In April 2011, on the basis of the incentive plan, the members of the Executive Board received a bonus of 110,000 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 2011 and due for payment in April 2012 is 98,450 KONE class B shares together with an estimated 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 Heikki Lassila, Authorized Public Accountant, and PricewaterhouseCoopers Oy, Authorized Public Accountants. The fees paid to companies in the PricewaterhouseCoopers chain for 2011 were EUR 2.1 million for auditing and EUR 1.6 million for other consulting services.
Insiders
A regularly updated table on the holdings of persons belonging to KONE's public insiders is available here.
(Updated on 27.1.2012)