Nokia 2004 Annual Report Download - page 91

(5) ‘‘Other Compensation’’ in 2002 for Mr. Olli-Pekka Kallasvuo represents a payment for the
20 year anniversary of his employment with Nokia, consistent with a policy for all Finnish-
based employees.
* Each executive listed received benefits and perquisites not exceeding the lesser of EUR 50,000
or 10% of the executive’s total compensation in each year.
Our executives forming the Group Executive Board in 2004 participate in the local retirement
programs applicable to all employees in the country where they reside. Executives in Finland
participate in the Finnish TEL pension system, which provides for a retirement benefit based on
years of service and earnings according to the prescribed statutory system. Under the Finnish TEL
pension system, base pay, incentives and other taxable fringe benefits are included in the
definition of earnings, although gains realized from stock options are not. The Finnish TEL pension
scheme provides for early retirement benefits at age 60 and full retirement benefits at age 65. The
current TEL provisions cap the total pension benefit at 60% of the pensionable earnings amount.
Executives in the United States participate in Nokia’s Retirement Savings and Investment Plan.
Under this 401(k) plan, participants elect to make voluntary pre-tax contributions that are 100%
matched by the company up to 6% of eligible earnings. The Company makes an additional annual
discretionary contribution of up to 2% of eligible earnings. In addition for participants earning in
excess of the eligible earning limit, the Company offers an additional Restoration and Deferral
Plan. This plan allows employees to defer income into a non-qualified plan. The Company also
makes an annual discretionary contribution of up to 2% of the earnings above 401(k) eligibility
limits.
For Mr. Jorma Ollila, Mr. Pekka Ala-Pietil¨ a, and Mr. Olli-Pekka Kallasvuo, Nokia offers a full
retirement benefit at age 60. The full retirement benefit is calculated as if the executive had
continued his service with Nokia through age 65.
Mr. Hallstein Moerk, following his arrangement from a previous employer, has a retirement benefit
of 65% of his pensionable salary beginning at age 62. Early retirement is possible at age 55 with
reductions in benefits.
Nokia does not offer any similar benefits to any other members of the 2004 Group Executive
Board.
6.C Board Practices
The Board of Directors
The operations of the company are managed under the direction of the Board of Directors, within
the framework set by the Finnish Companies Act and our articles of association and the
complementary Corporate Governance Guidelines and related charters as adopted by the Board.
The Board represents and is accountable to the shareholders of the company. The Board’s
responsibilities are active and not passive and include the responsibility to regularly evaluate the
strategic direction of the company, management policies and the effectiveness with which
management implements its policies. The Board’s responsibilities further include overseeing the
structure and composition of the company’s top management and monitoring legal compliance
and the management of risks related to the company’s operations. In doing so the Board may set
out annual ranges and/or individual limits for capital expenditures, investments and divestitures
and financial commitments not to be exceeded without Board approval.
The Board has the responsibility for appointing and discharging the Chief Executive Officer and the
President and the other members of the Group Executive Board. Subject to the requirements of
Finnish law, the independent directors of the Board will confirm the compensation and the
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