[46] Variable remuneration
KEEP Employee Equity Program
KEEP is a share matching plan. Participating employees acquire KION shares for their own investment purposes. Each set of three KION shares represents a share package. Once the three-year holding period has expired, employees are entitled to another free matching share (bonus share) for each share package. However, KION GROUP AG has the right to satisfy each program participant’s entitlement by paying a cash settlement instead of granting a bonus share.
Each year, the Executive Board of KION GROUP AG decides whether there will be an offer made under the Employee Equity Program that year and which companies will participate.
Due to the coronavirus pandemic, the Executive Board of KION GROUP AG decided not to run the KEEP Employee Equity Program in 2020 and 2021.
In 2019, KION GROUP AG plus 19 German and 60 foreign subsidiaries were eligible to take part in KEEP 2019.
For employees taking part for the first time, the KION Group offers a special incentive in the form of starter packages. Under KEEP 2019, the KION Group bore the cost of one KION share (free share) in each of the first seven share packages that an employee took 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 granted was as follows:
in units |
2021 |
2020 |
---|---|---|
Balance as at Jan. 1 |
40,529 |
53,776 |
Exercised bonus shares |
–15,953 |
–11,129 |
Forfeited bonus shares |
–1,165 |
–2,118 |
Balance as at Dec. 31 |
23,411 |
40,529 |
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 was determined on the basis of Monte Carlo simulation. The following measurement parameters were used:
Measurement parameters |
KEEP 2019 |
---|---|
Expected dividend |
€1.30 |
Price of the KION share as at grant date |
€58.82 |
As at December 31, 2021, the fair value of a bonus share for KEEP 2019 was €55.16.
The fair value of the bonus shares to be granted is recognized as an expense and paid into capital reserves over the three-year holding period. The holding period for KEEP 2018 ended on October 2, 2021 and the bonus shares were issued to the eligible employees at no cost.
In 2021, an expense totaling €0.6 million was recognized under the relevant functional costs for free shares and bonus shares in connection with the Employee Equity Program (2020: €0.8 million).