KION Performance Share Plan

As part of the KION GROUP AG performance share plan, the Executive Board members are allocated virtual shares over a fixed period (two-and-a-half years for the 2013 tranche and three years for all subsequent tranches). The remuneration component measured over the long term is based in equal parts on the total shareholder return (TSR) of KION GROUP AG shares compared with the STOXX® Europe TMI Industrial Engineering index as a measure of market performance, and with return on capital employed (ROCE) as an internal measure. It also depends on the performance of KION GROUP AG shares during the relevant period.

The performance period for the 2014 tranche ends on 31 December 2016. At the beginning of the performance period on 1 January 2014, the Executive Board members were granted a total of 0.2 million virtual shares for this tranche with a specific fair value based on an allocation value in euros specified in each Executive Board member’s service contract.

At the end of the performance period, the number of the virtual shares in each tranche is amended depending on the degree to which the relevant targets are achieved. The resulting final number of virtual shares multiplied by the smoothed price of KION GROUP AG shares at the end of the performance period determines the amount of cash actually paid. The Supervisory Board can also use a discretionary personal performance factor to adjust the final payment at the end of the performance period by +/– 20 per cent. The maximum amount payable is limited to 200 per cent of the value of the shares allotted to an individual at the grant date.

The pro-rata expense calculation is based on the fair value of the virtual shares on each valuation date, which is calculated using a Monte-Carlo simulation. The valuation parameters shown in >> TABLE 30 were used to value the virtual shares on the reporting date.

Significant measurement parameters for the KION GROUP AG Performance Share Plan

>>TABLE 30


Valuation date 31/03/2014

Measurement parameters

Tranche 2014

Tranche 2013




Expected volatility of the KION share



Expected volatility of the STOXX® Europe TMI Industrial Engineering Index



Risk-free interest rate



Expected dividend yield

0.88 €

0.88 €

Price of the KION share as at valuation date

34.03 €

34.03 €

Initial value of the KION share (60 days average)

29.49 €

26.64 €

Initial value of the STOXX® Europe TMI Industrial Engineering Index (60 days average)

208.87 €

204.26 €

Expected pay-out for internal target ROCE



The historic volatility of shares in similar companies (peer group) was used to determine the volatility of KION shares on which the valuation is based. As at 31 March 2014, the fair value of one virtual share was €26.80 for the 2013 tranche and €25.73 for the 2014 tranche. On that date, the total fair value based on 0.3 million and 0.2 million virtual shares respectively was €7.0 million (2013 tranche) and €5.0 million (2014 tranche). Because the performance period for the 2013 tranche has been set at 30 months, a pro-rata expense of €0.9 million for three months was recognised in the first quarter of 2014. The total carrying amount for liabilities in connection with share-based remuneration (2013 tranche) as at 31 March 2014 was €2.1 million (31 December 2013: €1.2 million). A liability of €0.4 million in respect of the 2014 tranche was recognised as a pro-rata expense for three months in the first quarter of 2014.

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