Nokia 2015 Annual Report Download - page 92

90 NOKIA IN 2015
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 Group Leadership Team including the President and CEO 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 comparability considerations. Base salaries are
reviewed annually taking into account market conditions, our nancial
condition 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 provided by our peer group.
Reward for the achievement of key business
metrics by meeting nancial and strategic targets
during the scal year.
Long-term
incentive
Performance shares:
The equity-based portion of compensation that is tied to our long-term
success and delivered primarily 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:
Restricted shares are used on a limited basis or in exceptional retention
and recruitment circumstances, predominantly in the United States,
asisconsistent with market practice. 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
Executives are provided the same benets as are made available to
employees more broadly in the relevant country, with additional security
provisions, as appropriate. Executives may also be provided with certain
other benets from time to time, which are not material in 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 rather provided to defray costs or additional burdens of
arelocation or residence outside the home country.
To assist with mobility across the Group to
ensure the appropriate talent is available to
execute our strategy at 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, 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. For further information refer to “—Termination provisions
forthe President and Chief Executive Ocer” and “—Nokia Group
Leadership Team members”.
To ensure the continuity of management in
connection with possible change of control event.
Compensation continued