Nokia 2010 Annual Report Download - page 137

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
CEO. All compensation for the President and CEO, including longterm equity incentives, is approved by
the Board and 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 Nokia Leadership Team (other than the President and CEO of
Nokia) 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 Nokia Leadership Team members (excluding the President
and CEO) and other direct reports to the President and CEO and approves their incentive compensation
based on such evaluation.
The Personnel Committee considers the following factors, among others, in its review when
determining the compensation of Nokia’s executive officers or recommending the compensation of
the President and CEO to the Board:
• 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 particular officer’s 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.
Nokia’s management performed an internal risk assessment of Nokia’s compensation policies and
practices for all its employees in 2009. As a result, management concluded that there are no risks
arising from Nokia’s compensation policies and practices that are reasonably likely to have a material
adverse effect on Nokia. The findings of the analysis were reported to the Personnel Committee.
Nokia’s compensation policies and practices did not change materially during 2010 and the Personnel
Committee concluded that there were no other significant factors which would have necessitated a
new assessment in 2010.
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.
The following report discusses executive compensation in 2010 when the Nokia Leadership Team was
called the Group Executive Board, and thus all references are made to the Group Executive Board.
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