Nokia 2013 Annual Report Download - page 122

NOKIA IN 2013
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 Approximately % of each Board member’s annual compensation is paid
in Nokia shares purchased from the market and the remaining approxi-
mately % is paid in cash. The members of the Board do not participate
in any of Nokia’s equity programs or receive any other form of variable
compensation for their duties as Board members.
 Represents compensation paid to Risto Siilasmaa for services as the
Chairman of the Board. This table does not include compensation paid to
Mr. Siilasmaa for his services as the interim CEO. For the compensation
paid for his services as the interim CEO. For the compensation paid for his
services as the interim CEO, please see “Summary compensation table”.
 Represents compensation paid to Jouko Karvinen, consisting of
EUR for services as Vice Chairman of the Board and EUR  
for service as the Chairman of the Audit Committee.
 Marjorie Scardino and Isabel Marey-Semper served on the Board until
the close of the Annual General Meeting in . They were not paid any
compensation during fiscal year , but received their compensation
for the term until the close of the Annual General Meeting in  in fiscal
year . For their compensation in , see Note  to our consolidated
financial statements.
 Represents compensation paid to Elizabeth Doherty, consisting of EUR
  for services as a member of the Board and EUR   for service
as a member of the Audit Committee.
 Stephen Elop did not receive compensation for his services as a member
of the Board. This table does not include compensation paid to Mr. Elop
for his services as the President and CEO. For compensation paid for his
service as the President and CEO, please see “Summary compensation
table ”. Mr. Elop stepped down from his position as President and CEO
and resigned from the Board of Directors effective September , .
 Represents compensation paid to Henning Kagermann, consisting of EUR
  for services as a member of the Board and EUR   for service
as the Chairman of the Personnel Committee.
 Represents compensation paid to Elizabeth Nelson, consisting of EUR
 for services as a member of the Board and EUR   for service
as a member of the Audit Committee.
Proposal by the Corporate Governance
and Nomination Committee for compensation
to the Board of Directors in 2014
On April , , the Corporate Governance and Nomination
Committee of the Board announced its proposal to the Annual
General Meeting convening on June ,  regarding the re-
muneration to the Board of Directors in . The Committee
will propose that the annual fee payable to the Board members
elected at the same meeting for a term until the close of the
Annual General Meeting in  remain at the same level as it
has been for the past six years and be as follows: EUR 
for the Chairman, EUR   for the Vice Chairman and EUR
  for each member; for the Chairman of the Audit Com-
mittee and the Chairman of the Personnel Committee an ad-
ditional annual fee of EUR  , and for each member of the
Audit Committee an additional annual fee of EUR  .
The guiding principle of the Committee’s proposal is to align
the interests of the directors with those of the shareholders
by remunerating directors primarily with Nokia shares that
must be retained for the duration of the Board membership.
Therefore, the Committee will propose that, approximately
% of the remuneration be paid in Nokia shares purchased
from the market or alternatively by using own shares held by
the company, which shares shall be retained until the end of
a director’s Board membership in line with the current Nokia
policy (except for those shares needed to off set any costs
relating to the acquisition of the shares, including taxes). The
rest of the remuneration would be payable in cash, most of
which is typically used to cover taxes arising out of the remu-
neration.
EXECUTIVE COMPENSATION
The sections below describe our executive compensation
philosophy, the design of our compensation programs and the
factors considered during the decision-making process. One of
the underlying principles of our compensation philosophy and
our compensation program design is that a signifi cant portion
of an executive’s total compensation is tied to the company’s
performance and be aligned with the value delivered to
shareholders. Of the  total compensation for Stephen
Elop, the President and CEO until September , , % of
his compensation was tied to the company’s performance. The
amount of compensation tied to the company’s performance
for the other members of the Nokia Leadership Team for 
ranged from % to %. Our programs are designed so that
this portion of compensation is earned and delivered only
when results warrant. In , we acquired the full ownership
of Networks (previously called Nokia Solutions and Networks),
and the three business continuing with Nokia after the Sale
of D&S Business were profi table. However, we did not achieve
all of our targets due to losses sustained in the Devices &
Services business. As a result, some members of the Nokia
Leadership Team did not realize signifi cant elements of their
total compensation in . There were no payments under the
vested Performance Share Plan to any Nokia Leadership Team
members and some did not receive annual short-term variable
incentive.
Executive compensation philosophy, programs
and decision-making process
The basic principles of our executive compensation philosophy
is to attract, retain and motivate talented executive offi cers
globally with the right mix of skills and capabilities to drive
Nokia’s success in an extremely complex and rapidly evolv-
ing mobile communications industry. To achieve this, we have
developed an overall compensation framework that provides
competitive base pay rates combined with short- and long-
term incentives or compensation that are intended to result in
a competitive total compensation package.
Our executive compensation programs are designed to
support Nokia in the execution of the corporate strategy.
Specifi cally, our programs are designed to:
■ incorporate specifi c performance measures that align
directly with the execution of our strategy;
■ deliver an appropriate amount of performance-related vari-
able compensation for the achievement of strategic goals
and fi nancial targets in both the short- and long-term;
■ appropriately balance rewards between Nokia’s and an indi-
vidual’s performance; and
■ foster an ownership culture that promotes sustainability
and long-term value creation and align the interests of the
named executive offi cers with those of the shareholders
through long-term equity-based incentives.
The competitiveness of Nokia’s executive compensation
program is one of several key factors that the Personnel
Committee of the Board considers in its determination
of compensation for the Nokia Group Leadership Team,
which includes the named executive offi cers. The Personnel
Committee compares, on an annual basis, Nokia’s compensa-
tion practices, base salaries and total compensation, including
short- and long-term incentives against those of other rel-