CORPORATE GOVERNANCE IN 2017 This site uses cookies in order to provide you with the best user experience. You consent to the use of cookies by continuing the use of the site without changing your browser settings. You can change your browser settings and preferences at any time. For further information on cookies, please see our privacy statement. I Agree CONTACT HOME INVESTORS CORPORATE GOVERNANCE CORPORATE GOVERNANCE IN 2017 CORPORATE GOVERNANCE IN 2017 General Meeting of shareholders The Annual General Meeting was held in Helsinki, Finland on February 28, 2017. Board of Directors and committees The Annual General Meeting elected eight members to KONE’s Board of Directors. The full-time Chairman of the Board of Directors of KONE Corporation is Antti Herlin. Jussi Herlin is the Vice Chairman of the Board. The other members of the Board are Matti Alahuhta, Anne Brunila, Iiris Herlin, Ravi Kant, Juhani Kaskeala and Sirpa Pietikäinen. Out of the eight Board Members, five are male and three female. Of the Board members, Matti Alahuhta, Anne Brunila, Iiris Herlin, Ravi Kant, Juhani Kaskeala and Sirpa Pietikäinen are independent of the Corporation. With the exception of Antti Herlin, Iiris Herlin and Jussi Herlin, the other Board members are independent of the Corporation’s significant shareholders. In 2017, the Board of Directors convened 7 times, with an average attendance rate of 96%. Jukka Ala-Mello serves as Secretary to the Board and to its Committees. Audit committee The Board of Directors’ Audit Committee comprises Jussi Herlin (Chairman), Anne Brunila (independent member), Antti Herlin and Ravi Kant (independent member). The Audit Committee held 3 meetings in 2017, with an average attendance rate of 100%. Caj Lövegren serves as the Head of Internal Audit. Nomination and compensation committee The Nomination and Compensation Committee comprises Antti Herlin (Chairman), Matti Alahuhta (independent member), Jussi Herlin and Juhani Kaskeala (independent member). The Nomination and Compensation Committee held 3 meetings in 2017, with an average attendance rate of 100%. Compensation and other benefits of the Board of Directors The Annual General Meeting of KONE Corporation in February 2017 confirmed the fees of the members of the Board as follows (annual fees in EUR): ANNUAL FEES EUR Chairman of the Board 54,000 Vice chairman 44,000 Member 37,000 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) CONTACT US WORKING AT KONE FOR SUPPLIERS FOLLOW US Legal notice Data File Description Privacy Statement KONE CORPORATION FINLAND, KONE OYJ, KEILASATAMA 3, P.O. BOX 7, ESPOO, 02150, FINLAND (苏ICP备17069255号-2 | 沪公网安备 31010502002858号)