Nokia 2010 Annual Report Download - page 136

Meeting in 2012, remain at the same level as during the past three years and be as follows: EUR 440
000 for the Chairman, EUR 150 000 for the Vice Chairman, and EUR 130 000 for each member (excluding
the President and CEO of Nokia if elected to the Nokia Board); 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 Corporate
Governance and Nomination Committee will propose that, as in the past, approximately 40 per cent of
the remuneration be paid in Nokia shares purchased from the market, which shares shall be retained
until the end of the board membership in line with the Nokia policy (except for those shares needed to
offset any costs relating to the acquisition of the shares, including taxes).
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 on a global
basis that drive Nokia’s success and industry leadership worldwide. Our compensation programs are
designed to promote sustainability and longterm value creation of the company and to ensure that
remuneration is based on performance.
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 main 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 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 sample includes
companies in high technology, telecommunications and Internet services industries, as well as
companies from other industries that are headquartered in Europe and the United States. The peer
group is determined by the Personnel Committee and reviewed for appropriateness from time to time
as deemed necessary due to such factors as changes in the business environment or industry.
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
regarding Nokia’s programs and compensation levels in preparation for meeting with the Committee.
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