Nokia 2008 Annual Report Download - page 102

CEO, which is confirmed by the independent members of the Board. Management’s role is to provide
any information requested by the Personnel Committee to assist in their deliberations.
In addition, upon recommendation of the President and CEO, the Personnel Committee approves all
compensation for all the members of the Group Executive Board (excluding that of the President and
CEO of Nokia and Simon BeresfordWylie, Chief Executive Officer of Nokia Siemens Networks) and
other direct reports to the President and CEO, including longterm equity incentives and goals and
objectives relevant to compensation. The Personnel Committee also reviews the results of the
evaluation of the performance of the Group Executive Board members (excluding the President and
CEO and Mr. BeresfordWylie) and other direct reports to the President and CEO and approves their
incentive compensation based on such evaluation. Mr. BeresfordWylie’s compensation as CEO of Nokia
Siemens Networks is evaluated and approved by the Board of Directors of Nokia Siemens Networks.
The Personnel Committee is apprised annually on actions taken with respect to Mr. BeresfordWylie’s
compensation.
The Personnel Committee considers the following factors, among others, in its review when
determining the compensation of Nokia’s executive officers:
• The compensation levels for similar positions (in terms of scope of position, revenues, number
of employees, global responsibility and reporting relationships) in relevant comparison
companies;
• The performance demonstrated by the executive officer during the last year;
• The size and impact of the role on Nokia’s overall performance and strategic direction;
• The internal comparison to the compensation levels of the other executive officers of Nokia;
and
• Past experience and tenure in role.
The above factors are assessed by the Personnel Committee in totality.
The compensation for Mr. BeresfordWylie is determined by the Board of Directors of Nokia Siemens
Networks based on the same factors as for the other members of the Group Executive Board of Nokia
and determined in a similar process.
Components of Executive Compensation
Our compensation program for executive officers includes annual cash compensation in the form of a
base salary, shortterm cash incentives and longterm equitybased incentive awards in the form of
performance shares, stock options and restricted shares.
Annual Cash Compensation
Base salaries are targeted at globally competitive market levels.
Shortterm cash incentives are tied directly to performance and represent a significant portion of an
executive officer’s total annual cash compensation. The shortterm cash incentive opportunity is
expressed as a percentage of the executive officer’s annual base salary. These award opportunities
and measurement criteria are presented in the table below.
Measurement criteria for the shortterm cash incentive plan include those financial objectives that are
considered important measures of Nokia’s success in driving increased shareholder value. Financial
objectives are established which are based on a number of factors and are intended to be stretch
targets that, when achieved, we believe, will result in performance that will exceed that of our key
competitors in the high technology, telecommunications and Internet services industries. The target
setting, as well as the weighting of each measure, also requires the Personnel Committee’s approval.
The following table reflects the measurement criteria that are established for the President and CEO and
members of the Group Executive Board and the relative weighting of each objective for the year 2008.
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