Shareholder's proposal for additional remuneration to members of Konecranes' Board of Directors
The shareholders of Konecranes Plc ("Konecranes") were given notice (the "Notice") of the Extraordinary General Meeting (the "General Meeting") to be held on September 15, 2016 by means of a stock exchange release published on July 15, 2016.
Konecranes has today received a proposal from HTT KCR Holding Oy Ab, the largest shareholder of Konecranes, for the General Meeting to resolve regarding the remuneration payable to the members of the Board of Directors. HTT KCR Holding Oy Ab proposed that the Board of Directors would, in addition to the proposal of the Nomination and Compensation Committee of Konecranes' Board of Directors as set out under item 7 of the Notice, be paid additional compensation, as described below. HTT KCR Holding Oy Ab is a part of Hartwall Capital Group. HTT KCR Holding Oy Ab is referred to below as "Hartwall Capital".
Hartwall Capital's proposal is based on the intensive 15-month period related to the acquisition of the Material Handling & Port Solutions business of Terex Corporation (the "Acquisition") that has significantly burdened Konecranes' Board of Directors. Board of Directors' role in the Acquisition was above and beyond the duties which would generally be required to be performed by board members, taking into consideration, inter alia, changes that have occurred in Konecranes' management during the Acquisition. The Board of Directors has convened 29 times between the 2015 and 2016 Annual General Meetings and 13 times thus far after the 2016 Annual General Meeting. By providing invaluable input, particularly the members of the Board of Directors belonging to the negotiation team (namely Svante Adde, Stig Gustavson, Bertel Langenskiöld and Christoph Vitzthum) were instrumental in securing Konecranes' position as one of the leading manufacturer of lifting equipment creating significant shareholder value. The importance of this is further underlined by the fact that the remuneration paid to the members of Konecranes' Board of Directors is generally at a low level in comparison with other comparable companies, and the members of the Board of Directors are not separately compensated for attending meetings of the Board of Directors.
In the light of the above, Hartwall Capital has proposed that the exceptional and valuable work for the company should be recognized and that the members of the Board of Directors would, independently of the proposal of the Nomination and Compensation Committee, be additionally remunerated as follows:
1. All members of the Board of Directors shall be remunerated for attending meetings of the Board of Directors during the period from Konecranes' Annual General Meeting held on March 23, 2016 until the closing of the Acquisition (or the next Annual General Meeting of Konecranes, unless the Acquisition has been closed prior to that). The compensation to be paid to each member of the Board of Directors shall be EUR 1,500 for each meeting the relevant member of the Board of Directors attended.
2. The members of the negotiation team shall be paid the following one-time compensation, which reflects the amount of each member's input:
a. EUR 60,000 to each of Stig Gustavson, Bertel Langenskiöld and Christoph Vitzthum; and
b. EUR 30,000 to Svante Adde.
Hartwall Capital has proposed that the accrued compensation per attended Board of Directors' meeting and the one-time compensation payable to the members of the Board of Directors shall be paid in cash. For the sake of clarity, Hartwall Capital has not proposed amending the proposal of the Nomination and Compensation Committee to increase the annual remuneration of the members of the Board of Directors as set out under item 7 of the Notice, but is in favour of the proposal.
Christoph Vitzthum, the Chairman of the Board of Directors, has informed Konecranes that if Hartwall Capital's proposal is approved by the shareholders at the General Meeting, he will forgo his one-time compensation referred to in item 2, as he considers that his input forms part of his duties as Chairman.
KONECRANES PLC
Miikka Kinnunen
Director, Investor Relations
Konecranes is a world-leading group of Lifting Businesses™, serving a broad range of customers, including manufacturing and process industries, shipyards, ports and terminals. Konecranes provides productivity-enhancing lifting solutions as well as services for lifting equipment and machine tools of all makes. In 2015, Group sales totaled EUR 2,126 million. The Group has 11,400 employees at 600 locations in 48 countries. Konecranes is listed on Nasdaq Helsinki (symbol: KCR1V).
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www.konecranes.com