Nokia 2015 Annual Report Download - page 102

100 NOKIA IN 2015
Alcatel Lucent liquidity agreements
Nokia, Alcatel Lucent and certain beneciaries of Alcatel Lucent stock
option and performance share plans have entered into liquidity
agreements, pursuant to which the Alcatel Lucent performance shares,
or the Alcatel Lucent shares resulting from the stock options exercises,
would be exchanged to for either (i) Nokia shares according to an
exchange ratio of 0.55 Nokia shares for each Alcatel Lucent share,
orfor (ii) a cash amount equivalent to the market value of such
Nokiashares, provided in any case that a reduced liquidity event has
occurred. A reduced liquidity was acknowledged on February 12, 2016
in respect of Alcatel Lucent shares. The choice for the settlement in
cash or in Nokia shares isat Nokia’s sole discretion, subject to the
possible applicable legal, regulatory or other local constraints.
The exchange ratio of 0.55 is subject to some adjustments in the
event of nancial transactions of Nokia or Alcatel Lucent, in order to
allow theholders of stock options or the recipients of performance
shares to obtain the same value in Nokia shares or in cash which they
would have obtained had such transactions not taken place. Liquidity
agreements have been oered also to current Group Leadership Team
members whoheld Alcatel Lucent stock options or performance
shares that were eligible for liquidity agreements.
Share ownership of the Board of Directors, the
President and Chief Executive Ocer and the
Nokia Group Leadership Team
General
The following section describes the ownership or potential ownership
interest in Nokia of the members of our Board, the President and CEO
and, on aggregate level, the Group Leadership Team at December 31,
2015, either through share ownership or, with respect to the
Presidentand CEO and the Group Leadership Team, through holding
of equity-based incentives, which may lead to share ownership in
thefuture.
With respect to the Board, approximately 40% of director
compensation is paid in the form of Nokia shares that are purchased
from the market or, alternatively, by using treasury shares held by
Nokia. The remainder of the remuneration, approximately 60%, is
paidin cash, most of which istypically used to cover related taxes.
Itisalso our policy that the directors retain until the end of their
directorship the net after-tax number ofshares that they have
received as remuneration for their duties as members of the Board
during their rst three years of service. Additionally, itis ourpolicy
thatnon-executive members of the Board do not participate in any
ofNokia’s equity programs and do not receive stock options,
performance shares, restricted shares or any other equity-based or
otherwise variable compensation for their duties as Board members.
For a description of the remuneration of our Board members,
refer to “—Board of Directors” above.
The President and CEO receives equity-based compensation
primarilyin the form of performance shares. Stock options are
nolonger granted and restricted shares are only granted in
exceptionalcircumstances. For a description of our equity-based
compensation programs for employees and executives, refer to
“—Equity compensation” above.
Compensation continued
Share ownership of the Board of Directors
At December 31, 2015, the members of our Board held the aggregate
of 1 414 445 shares and ADSs in Nokia, which represented 0.04% of
our outstanding shares and total voting rights excluding shares held
byNokia Group at that date.
The following table sets forth the number of shares and ADSs held by
the members of the Board at December 31, 2015:
Name(1) Shares(1) ADSs(1)
Risto Siilasmaa 992 334 –
Vivek Badrinath 19 255 –
Bruce Brown –74 847
Elizabeth Doherty 30 754 –
Simon Jiang 8 666 –
Jouko Karvinen 72 723 –
Elizabeth Nelson –87 308
Kari Stadigh 128 558 –
(1) The number of shares or ADSs includes not only shares or ADSs received as director
compensation, but also shares or ADSs acquired through any other means. Stock options or
other equity awards that are deemed as being benecially owned under the applicable SEC rules
are not included. For the number of shares or ADSs received as director compensation, refer to
Note 34, Related party transactions, of our consolidated nancial statements included in this
annual report.
Share ownership of the President and Chief Executive Ocer
andthe Nokia Group Leadership Team
The following table sets forth the share ownership of the President
and CEO, and the Group Leadership Team members in oce, in
aggregate, at December 31, 2015. The share ownership of all
members of the Group Leadership Team, including Mr. Suri, was
approximately 0.01% of the outstanding shares of the company
atDecember 31, 2015. The share ownership requirement of the
President and CEO as well as the Group Leadership Team members
isdescriber under “—Variable pay” above.
Beneficially owned shares
number
Rajeev Suri, President and CEO 29 722
Other members of the Group Leadership
Team, in aggregate 200 055
In addition to the 29 722 shares held by Mr. Suri, there are a number
ofunvested performance shares that are expected to vest in the
coming years. The performance of the performance share plan 2014
isnow known and 125.72% of the target award is expected to vest
onJanuary 1, 2017. The chart below shows the expected value of
shares valued at EUR 6.60 on December 31, 2015 compared to the
shareholding requirement for Mr. Suri. Unvested performance shares
under the performance share plan 2015 are valued below at “on
target” performance until the nal performance level of the plan
isknown. Subject to the terms and conditions of the long-term
incentive plans and the potential saleof vesting share awards to
meetassociated tax liabilities, it is expected that Mr. Suri will meet
theshareholding requirements within the next 12 months.