Nokia 2008 Annual Report Download - page 103
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Incentive as a % of Annual Base Salary in 2008
Position
Minimum
Performance
Target
Performance
Maximum
Performance Measurement Criteria
President and CEO ......... 0% 100% 225%
(a) Financial Objectives
(includes targets for net
sales, operating profit and
operating cash flow)
0% 25% 37.5%
(c) Total Shareholder
Return
(1)
(comparison made
with key competitors in the
high technology,
telecommunications and
Internet services industries
over one, three and five
year periods)
0% 25% 37.5%
(d) Strategic Objectives
Total ................... 0% 150% 300%
Group Executive Board ..... 0% 75% 168.75%
(a) Financial Objectives
(includes targets for net
sales, operating profit and
operating cash flow); and
(b) Individual Strategic
Objectives
(as described
below)
0% 25% 37.5%
(c) Total Shareholder
Return
(1)(2)
(comparison
made with key competitors
in the high technology,
telecommunications and
Internet services industries
over one, three and five
year periods)
Total ................... 0% 100% 206.25%
(1)
Total shareholder return reflects the change in Nokia’s share price during a respective time period
added with the value of dividends per share paid during the said period, divided by Nokia’s share
price at the beginning of the period. The calculation is the same also for each company in the
said peer group.
(2)
Only some members of the Group Executive Board are eligible for the additional 25% total
shareholder return element.
The incentive payout is based on performance relative to targets set for each measurement criteria
listed in the table above and includes: (1) a comparison of Nokia’s actual performance to pre
established targets for net sales, operating profit and operating cash flow and (2) a comparison of
each executive officer’s individual performance to his/her predefined individual strategic objectives
and targets. Individual strategic objectives include market share, quality, technology innovation, new
product revenue, customer retention rates, environmental achievements and other objectives of key
strategic importance which require a discretionary assessment of performance by the Personnel
Committee.
When determining the final incentive payout, the Personnel Committee determines an overall score
for each executive based on the degree to which (a) Nokia’s financial objectives have been achieved
together with (b) qualitative scores assigned to the individual strategic objectives. The final incentive
102