Nokia 2014 Annual Report Download - page 97

95
Corporate governance
NOKIA IN 2014
Compensation structure and goal setting
In line with our overall compensation philosophy our executives are rewarded using a mix of xed and variable pay.
The elements of the compensation structure for the Nokia Group Leadership Team are further detailed below:
Element Principles Purpose
Base salary Fixed cash component targeted at our peer group median; base salary
can vary from the market due to individual performance, experience,
time in position, and internal equity considerations. Base salaries are
reviewed annually taking into account market conditions, aordability
and individual performance.
To compensate for the relevant knowledge, skills
and experience the individual brings to the role
and the responsibility of their position. Provides
a degree of nancial certainty and stability that
helps us retain talent.
Short-term
incentive
An annual cash award designed to reward a mix of corporate,
businessunit, and individual performance compared to pre-established
performance goals. The on target short-term incentive award,
whentakentogether with base salary, is designed to provide a median
annual total cash compensation comparable to that of our peer group.
Reward for the achievement of key business
metrics by meeting nancial and strategic targets
during the scal year.
Long-term
incentive
The equity-based portion of compensation that is tied to Nokia’s
long-term success and delivered through performance shares.
Long-term incentive awards are intended to provide competitive incentive
compensation compared with our peer group when combined with base
salary and target short-term incentive.
The ultimate value of an award depends on our share price and business
performance against predetermined performance measures.
Restricted shares are also used selectively to recruit and retain key talent
on a very limited basis. The number of shares vesting is predetermined
but the ultimate value will rise or fall in line with movements in the
share price.
There are also certain legacy equity compensation programs in force
as described in “—Legacy equity compensation programs” below.
To reward for delivery of sustainable long-term
performance, align the executives’ interests with
those of shareholders and aid retention.
Benets &
perquisites
The Nokia Group Leadership Team members are provided the same
benets that are made available to employees more broadly in the
relevant country, with additional security provisions, as appropriate.
TheNokia Group Leadership Team members may also be provided with
certain other benets from time to time, which are not material in terms
of monetary value.
Benets and perquisites are oered as part
ofthecore compensation package to enable
us to attract, retain and protect employees
andexecutives.
Relocation &
mobility
To facilitate international mobility by providing relevant benets to assist
executives in relocation. Mobility policies support the relocation of an
executive and their dependents or the reasonable costs of commuting.
Benets are market specic and are not compensation for performing
the role but provided to defray costs or additional burdens of a relocation
or residence outside the home country.
To assist with mobility across the Nokia Group
to ensure the appropriate talent is available
toexecute our strategy in the right locations.
Retirement
plans
To provide retirement funding in line with local market and legal
requirements, typically through dened contribution or locally mandated
pension plans. No supplemental pension arrangements are provided.
To give a market competitive level of provision
for post-retirement income.
Change of
control
arrangements
Change of control arrangements are oered on a very limited basis only,
and based on a double trigger structure, which means that both a
specied change of control event and termination of the individual’s
employment must take place for any change of control based severance
payment to materialize. More information provided under section
“—Termination provisions for the Nokia Group Leadership Team members”.
To ensure the continuity of management in
connection with possible change of control event.