Kone - AGM 25 February 2020
In general, KONE is in compliance with the Finnish regulations relating to the organisation and procedures of the Annual General Meeting.
Under ITEM 10, the board of directors seeks approval of the Company's executive remuneration policy. ECGS notes that, following the entry into force of the EU Shareholders’ Rights Directive (SRD II), this is the first time that KONE puts its executive remuneration policy to a vote. In general, ECGS deems the overall level of transparency of the policy below Finnish standards. In addition, ECGS is missing an actual LT component (with a performance period of at least 3 years) under said policy. ECGS furthermore notes that the maximum variable salary, corresponding to 353% of annual base salary, exceeds the threshold of 300% under its guidelines. In view of the above concerns, ECGS recommends to vote OPPOSE.
Under ITEM 11, approval is sought for the remuneration of the board of directors. Although ECGS has no concerns over the fees proposed, it notes that the non-executive Chairman of the board, Mr. Antti Herlin, is entitled to an annual bonus on top of his already excessive base salary. In ECGS' view, non-executive directors should NOT be entitled to any variable payments to safeguard their independence from the company. Accordingly, ECGS recommends to vote OPPOSE.
Under ITEM 13, the (re-)election of the board of directors is proposed. In view of insufficient independent representation on the board, ECGS recommends to vote OPPOSE.
Under ITEM 15d, the audit committee proposes to re-appoint PricewaterhouseCoopers as the Company's external auditor for the FY 2020. ECGS notes that the current auditor has been in office for 24 years. Therefore, even though the level of non-audit fees is conform to its guidelines and a change of external auditor is proposed for FY 2021, this proposal is NOT considered to be in accordance with ECGS’ guidelines. Accordingly, ECGS recommends to vote OPPOSE.
KONE is an elevator and escalator industry group based in Finland. Co. is engaged in the provision of products and services for the installation, modernization and maintenance of elevators, escalators and automatic building doors. Co. provides its products and services throughout the entire lifecycle of the equipment, beginning from the installation of new equipment to the maintenance and modernization during their lifecycle and the full replacement of the equipment. Co.'s customers are active in industry segments such as residential, office, retail, public transportation, hotel, hospital, and marine.
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