Board and Executive Remuneration
We manage our remuneration through clearly defined processes, with well-defined governance principles, ensuring that no individual is involved in the decision-making related to their own remuneration and that there is appropriate oversight of any compensation decision.
Our Remuneration Policy sets a framework and describes the key principles as well as the decision-making processes for the remuneration of Nokia’s governing bodies-, i.e. the Board of Directors and the President and CEO. In respect of other Group Leadership Team (GLT) members, the Personnel Committee of the Board approves and oversees their remuneration subject to the same Remuneration Policy framework, including share ownership requirement and clawback policy.
Remuneration Policy
The Remuneration Policy was last presented to the Annual General Meeting 3 April 2024 for an advisory vote. Accordingly, the remuneration of the President and CEO as well as the Board of Directors shall be in line with this Policy as long as it remains in force. The updated Remuneration Policy is presented to the Annual General Meeting 2025. A remuneration policy will be presented to the Annual General Meeting at least every four years in line with the Finnish Corporate Governance Code.
Remuneration Report
The Remuneration Report will be annually presented to the shareholders for an advisory vote. The Remuneration Report describes the implementation of Nokia’s Remuneration Policy and provides information on the remuneration of the members of the Board of Directors and the President and CEO, during the preceding financial year.
Remuneration in our Annual Report 2024
The Remuneration section included in our Nokia Annual Report includes further information on the remuneration of the Nokia Group Leadership Team and their aggregate paid remuneration for the preceding financial year, overview of our incentive plans as well as further information on the remuneration related decision-making and meetings of the Board’s Personnel Committee.
Remuneration of the Board of Directors
Remuneration of the Board is annually presented to shareholders for approval at the Annual General Meeting. The Corporate Governance and Nomination Committee prepares the proposal for the shareholders in line with the Corporate Governance guidelines and valid Remuneration Policy. The Committee also reviews the remuneration for the members of the Board against international companies of similar size and complexity, and aims to ensure that Nokia is able to attract and retain Board members from diverse backgrounds with relevant skills and international experience to oversee the company strategy with emphasis on long-term value creation.
The Annual General Meeting 2024 resolved on the Board remuneration for the term that ends at the close of the next Annual General Meeting as outlined in the below tables.
Remuneration summary of the Board of Directors |
|
|---|---|
Fees |
Fees consist of annual fees and meeting fees. Approximately 40% of the annual fee is paid in Nokia shares purchased from the market on behalf of the Board members or alternatively delivered as treasury shares held by the Company. The balance is paid in cash, most of which is typically used to cover taxes arising from the paid remuneration. Meeting fees are paid in cash. Meeting fees are paid to all Board members, including the Board Chair. |
Incentives |
Non-executive directors are not eligible to participate in any Nokia incentive plans and do not receive performance shares, restricted shares or any other equity-based or other form of variable compensation for their duties as members of the Board. |
Pensions |
Non-executive directors do not participate in any Nokia pension plans. |
Share ownership requirement |
Members of the Board shall normally retain until the end of their directorship such number of shares that corresponds to the number of shares they have received as Board remuneration during their first three years of service in the Board (the net amount received after deducting those shares needed to offset any costs relating to the acquisition of the shares, including taxes). |
Other |
Directors are compensated for travel and accommodation expenses as well as other costs directly related to Board and Committee work. This compensation is paid in cash. |
Annual and meeting fees |
EUR |
|---|---|
Chair |
440 000 |
Vice Chair |
210 000 |
Member |
185 000 |
Chair of Audit Committee |
30 000 |
Member of Audit Committee |
15 000 |
Chair of Personnel Committee |
30 000 |
Member of Personnel Committee |
15 000 |
Chair of Strategy Committee |
20 000 |
Member of Strategy Committtee |
10 000 |
Chair of Technology Committee |
20 000 |
Member of Technology Committee |
10 000 |
Meeting requiring intercontinental travel |
5 000 |
Meeting requiring intracontinental travel |
2 000 |
Remuneration of the President and CEO
The remuneration of the President and CEO is approved by the Board, upon the recommendation of the Personnel Committee in accordance with the Remuneration Policy.
Justin Hotard started as the President and CEO of Nokia as of 1 April 2025. The table below outlines his current remuneration arrangements.
Pekka Lundmark stepped down from the role of Nokia President and CEO on 31 March 2025 and will continue as Advisor to the new President and CEO until 31 December 2025, to ensure a smooth leadership transition. Pekka Lundmark’s annual base salary and short-term incentive targets for the period from 1 January 2025 to 31 March 2025 were similar to those in the table below.
Further information is available in our Remuneration Policy, in the Remuneration Report and the Remuneration section included in our Annual Report.
Remuneration elements of the President and CEO Justin Hotard |
|
|---|---|
Annual base salary |
EUR 1 410 500 |
Short-term incentives (In 2025, pro-rated to nine (9) months in service) |
Target award: 125% of base salary Metrics: |
Long-term incentives |
Three-year plan in the form of Performance Shares Vesting in July 2028 Target award: 200% of base salary |
Buy-out award |
The President and CEO is entitled to a one-time buy-out award of EUR 2.0 million in cash (expected to be invested in Nokia shares) and EUR 6.0 million in Restricted Shares vesting in three tranches over a period of three years (2026, 2027, 2028), both in lieu of his forfeited unvested equity awards from the previous employer. In accordance with Nokia’s Remuneration Policy, the Company may make additional cash and/or share-based awards as it deems appropriate and, if the circumstances so demand, to take account of foregone remuneration by a candidate on leaving a previous employer. |
Pension |
Contribution to the mandatory TyEL pension plan in Finland. |
Benefits & mobility |
In line with Nokia’s Remuneration Policy, life and critical illness insurance, private medical insurance and company car, family relocation related payments and benefits, immigration and tax advisory services related to service at Nokia. |
Share ownership requirement |
Three (3) times base salary to be achieved within five years of appointment. |
Malus and Clawback |
The Nokia Executive Officer Clawback Policy and Nokia Incentive Compensation Clawback Policy as in force from time to time, including their Malus provisions, are applicable to any short- and long term incentives payable to the President and CEO. |
The President and CEO’s termination provisions
The President and CEO may terminate his service agreement at any time with a 12-month notice period and either continue to receive salary and benefits during the notice period or, at Nokia’s discretion, a lump sum of equivalent value. Additionally, the President and CEO is entitled to any short- or long-term incentives that would vest during the notice period. Any unvested equity awards would normally be forfeited after termination, unless the Board determines otherwise, and with the exception that in the case of death, permanent disability and retirement, unvested equity awards would normally continue to vest at their regular vesting date, subject to performance and time proration of service.
In the event that the President and CEO terminates his service agreement based on Nokia’s material breach of the agreement, he may shorten his notice period to a minimum of two months, and he is entitled to a severance payment equaling up to 12 months’ remuneration. Any unvested equity awards would be forfeited after termination.
Nokia may terminate the CEO service agreement for cause without observing a notice period. In such case the President and CEO is entitled to no additional remuneration and all unvested equity awards would be forfeited. In case Nokia terminates the CEO agreement for any other reason than cause, the President and CEO is entitled to remuneration during his 12-month notice period (including annual base salary, benefits, and short-term incentive) and his unvested equity awards would be forfeited after the termination, unless the Board determines otherwise.
If the service agreement of the President and CEO is terminated by Nokia within three (3) months before or six (6) months after a change of control event (double trigger mechanism), the President and CEO is entitled to a severance payment equaling 12 months’ remuneration (base salary, benefits and target short-term incentive) and his equity incentives would vest, subject to any performance criteria and time proration, until the expiry of the agreement.
The President and CEO is subject to a 12-month non-competition and non-solicit obligation that apply after the termination of his service agreement.
Remuneration of the Group Leadership Team
Executives on the Group Leadership Team are subject to the same remuneration policy framework as the President and CEO. This includes being subject to clawback and shareholding requirements. The shareholding requirement for members of the Group Leadership Team is two times their annual base salary within five years from their appointment.
The Personnel Committee has overall responsibility for evaluating and resolving the remuneration of the members of the Group Leadership Team (excluding the remuneration of the President and CEO, which is approved by the Board of Directors based on the recommendation of the Personnel Committee) and their terms of employment; ensuring that the remuneration is performance-based as a main rule and designed to contribute to long-term shareholder value creation and alignment to shareholders’ interests. As a general rule, the right to incentives always requires a valid contract of employment. The Group Leadership Team members’ average notice period is six months.
The remuneration of the Group Leadership Team members consists of base salary, benefits, and short- and long-term incentives. Short-term incentive plans are based on rewarding the delivery of business performance utilizing financial targets and non-financial metrics such as health & safety, workforce diversity and carbon emission reductions, or other separately defined strategic objectives.
The long-term incentive targets are set at the start of the performance period of the plan. The plans generally hold a three-year vesting period and the vesting is subject to continued employment.
The aggregate remuneration of the Group Leadership Team (excluding the President and CEO) in 2024 is presented in the table below:
2024 EURm(1) |
|
|---|---|
Salary, short-term incentives and other compensation(2) |
11.3 |
Long-term incentives(3) |
3.9 |
Total |
15.2 |
(1) The values represent each member’s time on the Group Leadership Team.
(2) Other compensation includes mobility related payments, local benefits and pension costs.
(3) The amounts represent the equity awards that vested in 2024.
The members of the Group Leadership Team (excluding the President and CEO) were awarded the following equity awards under the Nokia equity program in 2024:
Award |
Units awarded(1) |
Grant date |
Vesting |
|---|---|---|---|
Performance share award(2) |
7 445 257 |
5 July 2024 |
Q3 2027 |
Restricted share award(3) |
151 467 |
5 July 2024 |
Q4 2025 |
(1) Includes units awarded to persons who were Group Leadership Team members during 2024.
(2) The 2024 performance shares have a three-year performance period based on total shareholder return. The maximum payout is 200% subject to maximum performance against the performance criterion. Vesting is subject to continued employment.
(3) Vesting of the tranches of the restricted share award is conditional to continued employment.