Nokia 2014 Annual Report Download - page 177

175
Financial statements
NOKIA IN 2014
34. Related party transactions
The Group has related party transactions with a pension fund, associated companies, and the management and the Board of Directors.
Transactions and balances with companies over which the Group exercises control are eliminated on consolidation. Refer to Note 1,
Accountingprinciples, and Note 33, Principal Group companies.
Transactions with pension fund
The Group has borrowings amounting to EUR 69 million (EUR 69 million in 2013) from Nokia Unterstützungsgesellschaft GmbH, the Group’s
German pension fund, a separate legal entity. The loan bears interest at the rate of 6% per annum and its duration is pending until further
notice by the loan counterparties who have the right to terminate the loan with a 90-day notice. The loan is included in long-term
interest-bearing liabilities in the consolidated statement of nancial position.
Transactions with associated companies
EURm 2014 2013 2012
Share of results of associated companies (expense)/income (12) 4(1)
Dividend income –5 –
Share of shareholders’ equity of associated companies 51 53 46
Sales to associated companies 1612
Purchases from associated companies 305 178 150
Receivables from associated companies –– 1
Payables to associated companies 35 12 32
The Group has guaranteed a loan of EUR 13 million (EUR 16 million in 2013) for an associated company.
Management compensation
The Group announced changes to its leadership in 2013 and 2014 related to the Sale of the D&S Business which was announced on September
3, 2013. The changes in leadership were designed to provide an appropriate corporate governance structure during the interim period following
the announcement of the transaction.
The Chairman of the Board of Directors, Risto Siilasmaa, and the Chief Financial Ocer, Timo Ihamuotila, assumed additional responsibilities as
the Interim Chief Executive Ocer (“CEO”) and Interim President, respectively, from September 3, 2013 to May 1, 2014 when Rajeev Suri was
appointed the President and CEO of the Group.
The following table presents compensation information for the President and CEO of the Group.
EUR
Base salary/
fee(1)
Cash incentive
payments
Share-based
payment
expenses
Pension
expenses
2014
Rajeev Suri, President and CEO from May 1, 2014 666 667 1 778 105 3 896 308 366 989
Risto Siilasmaa, Interim CEO from September 3, 2013 to May 1, 2014(2) 1 126 323 191 475
Timo Ihamuotila, Interim President from September 3, 2013 to May 1, 2014(3) 100 000 72 643 17 000
2013
Risto Siilasmaa, Interim CEO from September 3, 2013 to May 1, 2014(2) 500 000
Timo Ihamuotila, Interim President from September 3, 2013 to May 1, 2014(3) 150 000 12 107 42 500
Stephen Elop, President and CEO until September 3, 2013 753 911 769 217 2 903 226 263 730
2012
Stephen Elop, President and CEO until September 3, 2013 1 079 500 –1 597 496 247 303
(1) Base salaries are pro-rated for the time in role. Incentive payments represent full-year incentive payment earned under the Group’s short-term incentive programs. For interim roles, the base salary/fee
is for the role-related responsibilities only.
(2) Represents the value of 200 000 shares awarded as compensation for additional responsibilities, the balance of which was given in shares after deducting associated taxes and social security
contributions.
(3) Includes EUR 100 000 as compensation for additional responsibilities (EUR 150 000 in 2013). Also includes an equity grant with an approximate aggregate grant date value of EUR 250 000 in the
form of Nokia stock options and Nokia restricted shares. These grants are subject to the standard terms and conditions and vesting schedules of the Group’s equity plans. Refer to Note 25,
Share-based payment.
Following the completion of the Sale of the D&S Business, the composition of the Group Leadership Team changed signicantly. Total
remuneration awarded to the Group Leadership Team, for their time as members of the Group Leadership Team, is EUR 16 234 381
(EUR 9 710 848 in 2013 and EUR 12 045 471 in 2012), consisting of base salaries, cash incentive payments and severance payments. Total
share-based payment relating to equity-based awards recognized in the consolidated income statement is EUR 25 519 721 (EUR 7 913 633
in 2013 and EUR 3 213 047 in 2012). The Group Leadership Team’s share-based payment expense increased compared with 2013 as a result
of nal share-based payments to Stephen Elop and other Group Leadership Team members upon the termination of employment. The expense
was partially oset by movements within the Group Leadership Team resulting in signicant forfeitures of granted equity instruments.
The members of the Group Leadership Team participate in the local retirement programs applicable to employees in the country where
they reside.