[44] Variable remuneration

KEEP employee share option programme

Following the introduction of the employee share option programme in Germany in 2014 (KEEP 2014), the Executive Board decided to launch a further share option programme for employees in Germany, China, the United Kingdom, France and Italy on 1 October 2015 (KEEP 2015). The period during which eligible employees could take up this offer by making a declaration of acceptance ran from 2 to 31 October 2015. To be eligible to participate in KEEP 2015, employees needed, at the start of the offer phase, to have had a permanent, uninterrupted employment contract with a participating KION Group company for at least one year. Currently, KION GROUP AG plus twelve German and 34 foreign subsidiaries are taking part in KEEP. The Company is considering whether to extend the employee share option programme to other countries over the coming years.

The KEEP programme is a share matching plan. Participating employees acquire KION shares for their own investment purposes. Each set of three KION shares represents a block of shares. Once the three-year holding period has expired, employees are entitled to one free matching share (bonus share) for each block. However, KION GROUP AG has the right to satisfy each programme participant’s entitlement by paying a cash settlement instead of granting a bonus share. For employees taking part for the first time, the KION Group offers a special incentive in the form of starter blocks. Under KEEP 2015, the KION Group will bear the cost of one KION share (free share) in each of the first nine blocks of shares that an employee takes up.

The right to obtain a bonus share lapses if participants sell their own investment in KION shares or cease to work for the KION Group. The change in the number of bonus shares to be granted is shown in > TABLE 119.

Development of the granted bonus shares

119

in units

2015

2014

Balance as at 01/01/

29,116

0

Granted bonus shares

24,504

29,146

Forfeited bonus shares

–400

–30

Balance as at 31/12/

53,220

29,116

In 2015, 8,740 free shares were issued to employees as part of their starter blocks (2014: 20,856 free shares).

The free shares to be issued are measured at their fair value on the day on which employees obtain the right to acquire shares as their own investment. The fair value on the grant date is determined on the basis of Monte Carlo simulation. The measurement parameters used are shown in > TABLE 120.

Significant measurement parameters for the KION GROUP AG Share Matching Programme

120

Measurement parameters

KEEP 2015

KEEP 2014

Expected dividend yield

€0.88

€0.88

Price of the KION share as at grant date

€41.01

€29.02

For the 2015 programme, the fair value of a bonus share was €38.57 (2014 programme: €26.59).

The fair value of the bonus shares to be granted is recognised as an expense and paid into capital reserves over the three-year holding period.

In 2015, an expense totalling €0.6 million was recognised under functional costs for free shares and bonus shares in connection with the employee share option programme (2014: €0.7 million). Of this amount, €0.2 million was attributable to KEEP 2014.

Each year, the Executive Board of KION GROUP AG decides whether there will be an offer made under the share option programme that year and which companies will participate.


KION performance share plan (PSP) for managers

KION performance share plan (PSP) for the Executive Board