Remuneration

KONE’s remuneration approach is built around strong principles of driving high performance, fair and competitive remuneration, encouraging value-based behavior and sustainability. We are committed to developing a strong pay for performance culture for employees at all levels across the organization.

KONE - Investors

  • The Annual General Meeting 2023 confirmed an annual compensation of EUR 220,000 for the Chairman of the Board, EUR 125,000 for the Vice Chair and EUR 110,000 for Board Members. Of the annual remuneration, 40 percent will be paid in class B shares of KONE Corporation and the rest in cash. In addition, the General Meeting confirmed a separate annual compensation to the members of the board committees: Chair of the Audit Committee: EUR 20,000 and members of the Audit Committee: EUR 10,000, and Chair of the Nomination and Compensation Committee: EUR 20,000 and members of the Nomination and Compensation Committee: EUR 10,000. The annual compensation of the members of the board committees is paid in cash. In addition, it was resolved that compensation is not paid to a Board Member who is employed by the company.

  • The Vice Chair of the Board, Jussi Herlin has a separate employment contract for his role as Executive Vice Chair of the Board at KONE. The employment-based compensation for Jussi Herlin consists of a base salary, benefits and an annual bonus decided by the Board on the basis of the Group’s financial result. The annual bonus may not exceed 100 percent of the recipient’s annual base salary. In 2023, Jussi Herlin’s base salary and benefits were EUR 126,457. There was no bonus payout in 2023 as the performance criteria for 2022, tied to the Group’s financial performance, were not met. The performance criteria applied to his annual short-term incentive in 2023 was based on KONE’s financial performance. The bonus will be paid in 2024.

    The Executive Vice Chair’s retirement age and pension are determined in accordance with Finland’s Pensions Act. No separate agreement regarding early retirement has been made.

  • The President and CEO’s compensation consists of annual base salary, short-term incentive plan, long-term incentive plan, fringe benefits and contribution towards pension that are determined by the Board of Directors.

    Philippe Delorme joined KONE as the President and CEO on January 1, 2024. His annual base salary is EUR 850,000. His short-term incentive plan is determined by the Board and may not exceed 150 percent of the annual base salary. The performance criteria applied to the annual short-term incentive is based on the company’s financial and strategic targets as well as individual performance. He is eligible to a car, housing and insurance benefits.

    Philippe Delorme will be included in the long-term performance-based incentive plan for the Group’s top management. The performance criteria and the maximum number of shares available for earning for the President and CEO for the 2024 long-term incentive plan will be confirmed by the Board of Directors’ meeting on January 25, 2024.

    Philippe Delorme’s retirement age and statutory pension are determined in accordance with Finland’s Pensions Act. No separate agreement regarding early retirement has been made. In addition, he receives a contribution to maintain his French pension scheme. 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.

  • The compensation for the members of the Executive Board comprises a base salary, benefits and an annual bonus, based on KONE’s financial targets and strategic performance, as well as individual performance. The bonus amount is determined by the Nomination and Compensation Committee and may not exceed 75 percent of the annual salary.

    The total amount of base salary paid to the Executive Board members was EUR 6.4 million in 2023. The total amount paid to the Executive Board members in 2023 based on the annual short-term incentive (earned in 2022) was EUR 2.0 million and the long-term incentive plan was EUR 2.1 million.

    The members of the Executive Board are included in the long-term share-based incentive plan for top management. Additional information concerning long-term share-based incentive plan of the Executive Board is disclosed in the below table.

    Performance based long-term incentive planPerformance periodVesting datePerformance criteriaMaximum earning opportunity (number of shares)*
    LTI 2021January 2021 - December 2023January 2024Adjusted EBIT margin %, sales growth and sustainability235,578
    LTI 2022January 2022 - December 2024January 2025Adjusted EBIT margin %, sales growth and sustainability250,445
    LTI 2023January 2023 - December 2025January 2026Adjusted EBIT margin %, sales growth and sustainability296,081

    *The maximum number of KONE class B shares available for earning (gross before deduction for applicable taxes).

    If the participant's employment or service relationship with KONE Group terminates before the end of the performance period, the participant, as a rule, forfeits the share award without compensation. As part of the performance share plan for the senior management, a long-term target for their ownership has been set. For the Executive Board members, the long-term ownership target is that the members have an ownership of KONE shares corresponding to at least five years’ annual base salary.

    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.

  • KONE has a performance share plan to support long term value creation and align interests of shareholders and management. Measuring performance over three years, the share plan emphasizes profitable growth and sustainability. Incorporating sustainability measures alongside financial metrics ensures a strong focus in driving transformation and achieving our sustainability ambitions.

    The performance share plan consists of annually commencing individual share plans, each with a three-year rolling performance period. The plans vest and are delivered in one portion after three years, based on the accumulated outcomes for the three-year performance period. If the participant's employment or service relationship with KONE Group terminates before the end of the performance period, the participant, as a rule, forfeits the share award without compensation. The number of shares earned by participants under the share-based incentive plans are determined on gross basis with deduction for taxes made when applicable before delivery of the shares to the participants.

    Long-term share-based incentive plan 2024

    The Board of Directors of KONE Corporation decided on 25 January 2024 on commencement of a performance based long-term incentive plan 2024-2026.

    For the performance period 2024-2026, the plan has approximately 600 participants and the targets for the performance period are based on adjusted EBIT margin, sales growth and sustainability targets. The maximum number of shares to be paid based on the performance period 2024-2026 is 1,216,229 KONE class B shares. The potential rewards under the plan will be paid as a combination of KONE class B shares and a cash payment equivalent to the taxes and similar charges that are incurred from the receipt of the shares. Potential rewards from the performance period 2024-2026 will be paid out in spring 2027.

    Information about the previous years’ performance share plans can be found from the remuneration reports.

    Restricted share plan 2024

    The Board of Directors of KONE Corporation decided on 25 January 2024 on commencement of a Restricted Share Plan 2024.

    KONE operates a restricted share plan structure that serves as a complementary long-term share plan to be used as a commitment instrument for recruitment and retention purposes for top management and other selected key persons. The potential rewards under the plan will be paid to the participants in KONE Class B shares, provided that their employment or service relationship with KONE Group is in force at the time of payment.

    The maximum number of shares to be paid from Restricted Share Plan 2024 is 80,000 KONE class B shares.

    Option programs

    KONE no longer has option programs in place. More information on the previous option rights can be found from the published stock exchange releases.

Remuneration reports

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