Nokia 2006 Annual Report Download - page 87

In 2004, the remuneration approved by the shareholders at the Annual General Meeting in 2004 was
as follows: EUR 150 000 for the Chairman, EUR 125 000 for the Vice Chairman, and EUR 100 000 for
each other members of the Board. As additional annual remuneration, the Chairman of the Audit
Committee and the Chairman of the Personnel Committee received EUR 25 000 each. In 2004, the
Chairman of the Board was Mr. Ollila, the Vice Chairman was Mr. Collins and the other members were
Mr. Ehrnrooth, Mr. Holmstr¨om, Mr. Karlsson, Ms. Scardino, Mr. Vainio and Mr. Wessberg. Mr. Collins
was the Chairman of the Personnel Committee and Mr. Karlsson was the Chairman of the Audit
Committee.
Proposal of the Corporate Governance and Nomination Committee of the Board
On March 5, 2007, the Corporate Governance and Nomination Committee of the Board announced
that it will propose to the Annual General Meeting to be held on May 3, 2007 that the annual
remuneration payable to the Board members to be elected at the same meeting for the term until
the close of the Annual General Meeting in 2008, be as follows: EUR 375 000 for the Chairman, EUR
150 000 for the Vice Chairman, and EUR 130 000 for each member. In addition, the Corporate
Governance and Committee will propose that the Chairman of the Audit Committee and the Chairman
of the Personnel Committee will each receive an additional annual fee of EUR 25 000, and each
member of the Audit Committee an additional annual fee of EUR 10 000. Further, the Committee will
propose that approximately 40% of the remuneration be paid in Nokia Corporation shares purchased
from the market.
Executive Compensation
Executive Compensation Philosophy
Nokia operates in the extremely competitive, complex and rapidly evolving mobile communications
industry. We are a leading company in the industry and conduct a global business. The key
objectives of the executive compensation programs are to attract, retain, and motivate talented
executive officers that drive Nokia’s success and industry leadership. The executive compensation
programs are designed to:
)provide competitive base pay rates,
)provide a total compensation that is competitive with the relevant market,
)attract and retain outstanding executive talent,
)deliver significant variable cash compensation for the achievement of stretch goals, and
)align the interests of the executive officers with those of the shareholders through longterm
incentives in the form of equitybased awards.
The Personnel Committee of the Board benchmarks Nokia’s compensation practices against those of
other relevant companies in the same or similar industries and of the same or similar revenue size.
The relevant companies include high technology and telecommunications companies that are
headquartered in Europe and the United States.
The Personnel Committee of the Board reviews all levels of the executive officers’ compensation on
an annual basis and, from time to time during the year, when special needs arise. The Committee
reviews and recommends to the Board the corporate goals and objectives relevant to the
compensation of the President and CEO, evaluates the performance of the President and CEO in light
of those goals and objectives, and proposes to the Board for its approval the compensation level of
the President and CEO. The Personnel Committee approves all compensation for the Group Executive
Board (other than the President and CEO) and other direct reports to the President and CEO,
including longterm equity incentives. The Personnel Committee also reviews the results of the
evaluation of the performance of the Group Executive Board members and other direct reports to the
President and CEO, and approves their incentive compensation based on such evaluation.
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