Nokia 2008 Annual Report Download - page 101

of the Annual General Meeting in 2010 be unchanged from 2008 as follows: EUR 440 000 for the
Chairman, EUR 150 000 for the Vice Chairman and EUR 130 000 for each member; for the Chairman of
the Audit Committee and the Chairman of the Personnel Committee an additional annual fee of
EUR 25 000; and for 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
shares purchased from the market.
Executive Compensation
Executive Compensation Philosophy, Programs and Decisionmaking Process
Our executive compensation philosophy and programs have been developed to enable Nokia to
effectively compete in an extremely complex and rapidly evolving mobile communications industry.
We are a leading company in our industry and conduct business globally. Our executive compensation
programs have been designed to attract, retain and motivate talented executive officers that drive
Nokia’s success and industry leadership worldwide.
Our compensation program for executive officers includes:
• competitive base pay rates; and
• short and longterm incentives that are intended to result in a competitive total compensation
package.
The objectives of our executive compensation programs are to:
• attract and retain outstanding executive talent;
• deliver a significant amount of performancerelated variable compensation for the achievement
of both short and longterm stretch goals;
• appropriately balance rewards between both Nokia’s and an individual’s performance; 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 competitiveness of Nokia’s executive compensation levels and practices is one of several key factors
the Personnel Committee of the Board (the “Personnel Committee”) considers in its determination of
compensation for Nokia executives. The Personnel Committee compares, on an annual basis, Nokia’s
compensation practices, base salaries and total compensation, including short and longterm incentives
against those of other relevant companies with the same or similar revenue size, global reach and
complexity that we believe we compete against for executive talent. The relevant companies include
high technology telecommunications companies, Internet services companies, and companies from
other industries that are headquartered in Europe and the United States.
The Personnel Committee retains and uses an external consultant from Mercer Human Resources to
obtain benchmark data and information on current market trends. The consultant works directly for
the Chairman of the Personnel Committee and meets annually with the Personnel Committee, without
management present, to provide an assessment of the competitiveness and appropriateness of
Nokia’s executive pay levels and programs. Management provides the consultant with information
with regard to Nokia’s programs and compensation levels for preparation in meeting with the
Committee. The consultant of Mercer Human Resources that works for the Personnel Committee is
independent of Nokia and does not have any other business relationships with Nokia.
The Personnel Committee reviews the executive officers’ compensation on an annual basis and from
time to time during the year, when special needs arise. Without management present, the Personnel
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 the compensation level of the President and
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