Market capitalization
During the financial year 2011 the price of the KONE Corporation class B share fell by 3.6 percent, from EUR 41.60 to EUR 40.10, on the NASDAQ OMX Helsinki Ltd. in Finland. During the same period, the OMX Helsinki Cap Index fell by approximately 28 percent and the OMX Helsinki Industrials Index by approximately 25 percent. During the financial year the price of the KONE Corporation class B share peaked at EUR 44.37 and was EUR 33.78 at its lowest. At the end of 2011, the company’s market capitalization, in which the unlisted class A shares are valued at the closing price of the class B shares on the last trading day of the financial year, was EUR 10,249 million. At the end of December 2011, the company held 4,962,176 class B shares as treasury shares.
During the financial year, 151.7 million KONE Corporation class B shares were traded on the NASDAQ OMX Helsinki Ltd. The value of the shares traded was EUR 6,036 million. The average daily turnover of class B shares was 599,449, representing a value of EUR 23,859,159. The relative turnover was 58 percent. In addition to the NASDAQ OMX Helsinki Stock Exchange, KONE’s class B share is traded also on various alternative trading platforms. The volume of KONE’s B shares traded on the NASDAQ OMX Helsinki Stock Exchange represented approximately 49% of the total volume of KONE’s class B shares traded in 2011 (Source: Fidessa Fragmentation Index).
Shares and share capital
At the end of December 2011, the share capital was EUR 65,134,030.00. During the financial year there was no change in share capital compared to the situation at the end of 2010.
Each class A share is assigned one vote, as is each block of 10 class B shares, with the proviso that each shareholder is entitled to at least one vote. At the end of December 2011, the total number of shares was 260,536,120, comprising 222,431,764 class B shares and 38,104,356 class A shares. The total number of votes was 60,347,532.
Dividends
In accordance with the Articles of Association, class B shares have the right to a dividend that is at least one percent, but no more than 2.5 percent, higher than the dividend paid to the holders of class A shares, which is obtained by dividing the share capital entered in the Finnish Trade Register by number of shares entered in the same Register. The Board of Directors proposes to the Annual General Meeting that for the financial year 2011 a dividend of EUR 1.395 be paid for each class A share and a dividend of EUR 1.40 be paid for each class B share.
Authorization to raise the share capital
At the end of the financial year, the Board of Directors of the company had a valid authorization granted by the Shareholders’ Meeting in March 2010 to increase the share capital and to issue stock options. The authorization is effective until March 1, 2015.
Authorization to purchase and surrender own shares
KONE Corporation’s Annual General Meeting held on February 28, 2011 authorized the Board of Directors to repurchase the company’s own shares. On the basis of this authorization, the Board decided to commence the purchase of shares on March 8, 2011 at the earliest. The authorization will remain in effect for a period of one year from the date of the decision of the General Meeting.
Altogether no more than 25,570,000 shares may be repurchased, of which no more than 3,810,000 may be class A shares and 21,760,000 class B shares, taking into consideration the provisions of the Companies Act regarding the maximum amount of its own shares that the Company is allowed to possess. The shares may be repurchased, among other reasons, to develop the capital structure of the Company, finance or carry out possible acquisitions, implement the Company’s share-based incentive plans, or to be transferred for other purposes or to be cancelled.
The minimum and maximum consideration for the shares to be purchased is determined for both class A and class B shares on the basis of the trading price for class B shares determined on the NASDAQ OMX Helsinki Ltd. on the time of purchase.
During the financial year 2011, KONE repurchased 1,098,085 own shares. During January–December 2011, KONE used its previous authorization to repurchase own shares in February, and bought back in total 298,835 of its class B shares. In April KONE assigned 219,000 of its own class B shares to a share-based incentive plan. In July, 200,000 class B shares owned by KONE were subscribed with 2007 option rights. During August, KONE used its current authorization to repurchase own shares and bought back in total 799,250 of its class B shares. In October, 300,000 class B shares owned by KONE were subscribed with 2007 option rights. In December, in total 268,944 class B shares owned by KONE were subscribed with 2007 option rights, and 3,000 class B shares were returned free of consideration by virtue of the terms of KONE Corporation’s share-based incentive program for the years 2010–2012. The number of class B shares held by KONE Corporation at the end of the year was 4,962,176.
An updated list of shares in the Company's possession is found here.
Options
KONE Corporation had two stock option programs during the financial period 2011. The purpose of the stock options is to encourage long-term efforts by key personnel to increase shareholder value and their commitment to the company by offering them an internationally competitive incentive program. The company’s Board Members, President and CEO and members of the Executive Board are not included in the stock option programs. (For updated information about options, please see the links below.)
In December 2007, KONE Corporation’s Board of Directors decided to grant stock options 2007 to approximately 350 employees of KONE’s global organization based on the authorization by the Annual General Meeting on February 26, 2007. A maximum total of 2,000,000 options can be granted. The original share subscription price for the option was 25.445 euros per share and it is further reduced in situations mentioned in the terms, for example with dividends distributed before the subscription of the shares. The 2007 stock options were listed on the NASDAQ OMX Helsinki Ltd. as of April 1, 2010. The total number of stock options was 2,000,000 of which 888,000 are owned by a subsidiary of KONE Corporation. On December 31, 2011, the number of options outstanding was 725,328. Each option right entitles its owner to subscribe for two (2) existing class B shares held by the company at a price of, on December 31, 2011, EUR 21.945 per share. The subscription period for the 2007 stock options is April 1, 2010–April 30, 2012.
In July 2010, KONE Corporation’s Board of Directors decided to grant stock options 2010 to approximately 430 employees of KONE’s global organization based on the authorization by the Annual General Meeting on March 1, 2010. A maximum total of 3,000,000 options can be granted. The original share subscription price for the option was 35.00 euros per share and it is further reduced in situations mentioned in the terms, for example with dividends distributed before the subscription of the shares. Each option entitles its holder to subscribe for one (1) new or an existing company’s own class B KONE share at a price of, on December 31, 2011, EUR 34.10 per share. The share subscription period for the stock options 2010 will be April 1, 2013–April 30, 2015. The share subscription period begins only if the financial performance of the KONE Group for the financial years 2010–2012 based on the total consideration of the Board of Directors is equal to or better than the average performance of the key competitors of KONE. If the above-mentioned prerequisite is not fulfilled, the stock options expire based on the consideration and in the extent and manner decided by the Board of Directors and the terms of the stock options.
Share-based incentive plan
KONE has a share-based incentive plan for the company’s senior management (the President and CEO, members of the Executive Board and other top management), consisting of approximately 40 individuals. The potential reward is based on the annual growth in both sales and earnings before interest and taxes (EBIT). The reward is to be paid as a combination of class B shares and the cash equivalent of the tax and taxable benefit costs that are incurred. The plan prevents participants from transferring the shares during the fifteen-month period following the termination of each fiscal year. As part of the share-based incentive plan, a long-term target for the management’s ownership has been set. In April 2011, a total of 219,000 class B shares were granted to the management as a reward due to the achievement of the targets for the year 2010. In April 2012, a total of 210,980 class B shares will be granted to the management due to the achievement of the targets for the year 2011.
Shareholders
At the end of December 2011, KONE Corporation had 30,402 shareholders.
An updated breakdown of KONE's shareholders is found here.
At the end of December 2011, non-Finnish shareholders held approximately 52.0 percent of KONE Corporation’s class B shares, corresponding to around 19.2 percent of the votes. Of these foreign-owned shares, 14,097,076 were registered in the shareholders’ own names. Foreign-owned shares may also be nominee-registered. Only shares registered in the shareholders’ own names entitle their holders to vote at Shareholders’ Meetings. There were 101,618,329 nominee-registered shares, representing approximately 39.0 percent of all shares, at the end of December 2011.
Shareholdings of the Chairman and Members of the Board of Directors
On December 31, 2011, KONE Corporation’s Chairman and Members of the Board of Directors owned 35,280,804 class A shares and 19,437,546 class B shares, representing approximately 21 percent of the total number of shares and 62 percent of the total votes.