KONE's Board of Directors decides on a new share-based long-term incentive plan
KONE Corporation, stock exchange release, January 28, 2021 at 12.55 p.m. EET
KONE's Board of Directors decides on a new share-based long-term incentive plan
KONE Corporation's Board of Directors decided on January 28, 2021 to launch a new share-based long-term incentive plan. To support long term value creation and align interests of shareholders and management, the new performance share plan measures performance over three years compared to one-year performance in the previous performance share plans. The new plan will replace the existing performance share plans.
The new performance share plan continues to emphasize profitable growth and as a new measure sustainability. Incorporating sustainability measures into the performance share plan for management ensures a strong focus in driving transformation and achieving our sustainability ambitions.
The target group and targets within the plan as well as possible rewards are decided upon annually by the Board. The company's Board Members are not included in the plan. The performance share plan consists of annually commencing individual share plans, each with a three-year rolling 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 potential reward 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. A long-term target for share ownership has been set as part of the plan for the senior management of KONE.
The commencement of each individual plan within the performance share plan structure is subject to a separate approval of the Board.
In addition to the above, KONE operates a restricted share plan that serves as a complementary long-term share plan to be used as a commitment instrument for retention and recruitment purposes for top management and other selected key persons. The plan has a commitment period up to 3 years, after which the potentially granted share awards for an individual plan will be paid to the participant in KONE class B shares, provided that their employment or service relationship with KONE Group is in force at the time of payment. This number of shares represents gross earnings, from which the applicable withholding tax is deducted and the remaining net amount is paid to the participant in shares.
Performance share plan 2021
The first plan according to the new incentive plan commences as of the beginning of 2021 and any potential share awards under the plan will be paid out in spring 2024, if the performance criteria set by the Board for 2021-2023 are achieved.
The performance criteria applied to the 2021 performance share plan are based on annual growth in sales, adjusted EBIT margin and improvements in sustainability. The sustainability performance condition is a combination of reductions in carbon footprint, diversity and inclusion as well as safety related targets. KONE's Board of Directors has the possibility to change the basis of the target setting annually.
Approximately 55 members of the top management and 500 other selected key persons of KONE Group are eligible to participate in the 2021 performance share plan.
For further information, please contact:
Susanne Skippari, Executive Vice President, Human Resources tel. +358 20 475 4524
Sender:
KONE Corporation
Jukka Ala-Mello
Secretary to the Board
Susanne Skippari
Executive Vice President
Human Resources
About KONE
At KONE, our mission is to improve the flow of urban life. As a global leader in the elevator and escalator industry, KONE provides elevators, escalators and automatic building doors, as well as solutions for maintenance and modernization to add value to buildings throughout their life cycle. Through more effective People Flow®, we make people's journeys safe, convenient and reliable, in taller, smarter buildings. In 2020, KONE had annual sales of EUR 9.9 billion, and at the end of the year over 60,000 employees. KONE class B shares are listed on the Nasdaq Helsinki Ltd. in Finland.
www.kone.com