The Nomination and Compensation Committee evaluates and prepares for Board decision the remuneration packages of Group Executive Board members who report directly to the President and CEO. Remuneration packages for other Extended Management Team members are confirmed by the President and CEO. Compensation packages normally include basic salary, fringe benefits (typically use of a company car and mobile phone), contribution-based pension schemes, and performance-related bonus schemes.
Bonus schemes are always based on written contracts. Bonus criteria vary, but are usually based on the Group’s five Key Performance Areas: Safety, Customer, People, Growth, and Profitability. Bonuses are related to an individual’s performance and to the performance of the unit that he/she belongs to. Numerical performance criteria are used rather than personal assessments, whenever possible. The maximum bonus percentage is based on the individual’s responsibilities and in 2012 was 50 percent of individual’s annual base salary.
The Finnish members of the Extended Management Team participate in a defined contribution-based group pension insurance scheme, which can be withdrawn from the age of 60. However, the retirement age of the members of the EMT is set according to the Finnish Employees Pensions Act (TyEL). The Finnish EMT members have life insurance and disability insurances. Non-Finnish members of the EMT also participate in defined contribution pension plans and have local insurance.
The Konecranes Group Executives established a company named KCR Management Oy in May 2009. KCR Management Oy acquired 517,696 Konecranes Plc shares from the market. The acquisition was financed by capital investments by the executives, in the total approximate amount of EUR 1.3 million, as well as by a loan in approximate amount of EUR 7.1 million provided by Konecranes Plc. KCR Management Oy was owned by the executives who belonged to the Group Extended Management Team upon the establishment of KCR Management Oy.
KCR Management Oy had an obligation to repay the loan granted by Konecranes Plc prematurely in case the share price of Konecranes Plc other than temporarily exceeds a certain level determined in the agreements. This condition was met in December 2010. The Board of Directors of Konecranes Plc decided that the loan will be repaid through a share swap and as a result of the share swap the Extended Management Team received in total 164,888 Konecranes shares (see item 5 in the table above). KCR Management Oy was merged to Konecranes Plc effective on December 31, 2011.
There were no loans issued by the Company to the Extended Management Team (excluding the President and CEO) at the end of December 2012.
*As of February 1, 2013, the EMT has been replaced by the Konecranes Senior Management Team. For more details visit www.konecranes.com > Investors > Corporate Governance > Group Management.