Remuneration of the President and CEO

The Nomination and Compensation Committee reviews the President and CEO’s performance. Based on this review and other relevant facts, the Board determines the total compensation package paid to the President and CEO.

The compensation package includes basic salary, fringe benefits, pension scheme, and performance-related bonus scheme. The President and CEO’s bonus scheme is based on Group profitability and growth, and the maximum bonus is 50% of the President and CEO’s annual base salary. Additionally, the Board of Directors can, but is not obligated to set certain strategic targets that can trigger an additional bonus, which can be a maximum of 50% of the President and CEO’s annual base salary.

The pension scheme states that when the President and CEO reaches the age of 60 years, both he and the Company may request his retirement with a target pension of 60 percent of his underlying income, excluding bonuses.

Salary and benefits paid to the President and CEO are shown in the table.

At the end of 2011, Konecranes had a loan receivable of EUR 217,197 from the President and CEO, Mr. Pekka Lundmark, with an interest rate of 2.039 percent. The loan relates to a tax payment resulting from the incentive scheme directed to the President and CEO in 2006. There is a tax appeal pending against the payment and the loan is effective until the appeal is resolved.

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, totaling approximately EUR 1.3 million, as well as by a loan in the 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.

The arrangement extended and continued the incentive scheme provided to the Company's President and CEO in 2006. In connection with the establishment of the new arrangement, the five-year transfer restriction relating to the 100,000 shares sold to the President and CEO in connection with the 2006 incentive scheme was amended, enabling the President and CEO to divest these shares on the market, provided that the funds so received were invested in KCR Management Oy.

According to the agreements governing KCR Management Oy, the latter had an obligation to repay the loan granted by Konecranes Plc prematurely in the event that the share price of Konecranes Plc exceeded a certain level determined in the agreements other than temporarily. This condition was met in December 2010. The Board of Directors of Konecranes Plc decided that the loan should be repaid through a share swap whereby Konecranes Plc acquired all the shares in KCR Management Oy. To implement the share swap, the Board of Directors of Konecranes Plc decided on a directed share issue in which the Company offered, in derogation from the shareholders’ pre-emptive subscription rights, a total of 281,007 new Konecranes shares to the shareholders of KCR Management Oy against share consideration (Share Swap). As part of the Share Swap, the shareholders of KCR Management Oy conveyed the KCR Management Oy shares they held and received new Konecranes Plc shares in return. The new shares are subject to the transfer restriction determined by the Board of Directors in May 2009 and which will expire on November 1, 2012. President and CEO Pekka Lundmark had a 27.9% share in KCR Management Oy and as a result of the Share Swap he received 83,606 Konecranes shares. KCR Management Oy was merged into Konecranes Plc effective on December 31, 2011.

The new shares were registered in the subscriber’s book-entry accounts and entered into the Trade Register on January 13, 2011 and were subject to public trading on NASDAQ OMX Helsinki from January 14, 2011.