Nokia 2015 Annual Report Download - page 94

92 NOKIA IN 2015
To ensure alignment with shareholders’ interests and the culture
ofdeveloping long-term sustainable success, we have two policies
inplace which apply to variable compensation:
Clawback policy: In the event that there is any error or misstatement
of nancial results which, had it been known at the time of the
determination of the incentive, would have resulted in a lower
payment, the Board has an option to claw back any excessive payment
within three years from such event. In a bad faith event, the Board
hasdiscretion to claw back remuneration from previous years, if it is
deemed appropriate.
Share ownership policy: To align the interests of the President and
CEO and the Group Leadership Team with shareholders’ interests,
wehave ashareholding policy requiring that a minimum number of
shares must be held by the executive. For the President and CEO,
therequirement istohold shares to a value equaling three times
hisbase salary. For the current Group Leadership Team members,
therequirement is to hold shares to a value equaling two times the
member’s base salary. The share ownership policy, which is eective
from January 1, 2015, requires these executives to amass the
requisite shareholding within ve years of becoming subject to
thepolicy. They are not permitted to sell any vesting equity awards,
other than for the purposes of meeting associated tax and social
security liabilities, until the shareholding requirement issatised.
Short-term incentives
The 2015 short-term incentive for the President and CEO is
determined by the achievement against key nancial targets and other
strategic objectives, as dened below. Performance against these
dened targets are then multiplied by a business results multiplier,
which acts as a funding factor for the incentive plan for most
employees, to determine the nal payment.
% of base salary
Measurement criteria
Minimum
performance
Target
performance
Maximum
performance
0% 125% 281.25% 80% of the incentive is based on performance against the Nokia scorecard:
■Non-IFRS revenue (⅓);
■Non-IFRS operating profit (⅓); and
■Net cash flow (⅓).
The nal 20% of the incentive is based on the achievement of personal strategic objectives given to
the President and CEO bythe Board.
2015 Short-term incentive
Personal strategic objectives (20%)
Nokia Scorecard (80%)
⅓ Nokia non-IFRS revenue
⅓ Nokia non-IFRS operating prot
⅓ Net Nokia cash ow
Business Results Multiplier
(Nokia non-IFRS operating prot) Annual incentive
The 2015 short-term incentive for Mr. Suri will be paid at 153.77% of the target incentive amount, which reects the performance of Nokia
across the metrics used in the plan, including Nokia’s continued progress and transformation, as reected in his personal strategic objectives.
Mr. Suri’s short-term incentive in 2014 was at a similar achievement level, albeit with a lower target incentive for the period between January and
April 2014 before he became President and CEO.
Compensation continued