Nokia CEO Kallasvuo decides to forgo personal bonus for 2006

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Olli-Pekka Kallasvuo, the President and CEO of the mobile telephone manufacturer Nokia, has decided to give up his personal bonus pertaining to the second half of 2006. Kallasvuo announced his decision on the company’s intranet pages on January 29th - four days after the company’s result for 2006 had been published.
     
Nokia personnel have expressed annoyance over the company’s announcement that despite the company’s record-breaking fourth quarter result, the so-called "Connecting People" performance bonuses for the second half of last year would not be paid as the earnings per share were below the target set by the Board.
      A further cause of annoyance is the fact that the missed targets also translate to cuts in the bonus systems paid by individual business groups. Such bonuses are based on the net sales, business profit, and cash flow, among other things.
      Last Friday, the senior clerical employees of the mobile telephone manufacturer Nokia walked out in Tampere and Oulu, demonstrating against the company’s personnel policy.
     
Nokia did not make public Kallasvuo’s decision, as the company wanted to respect Kallasvuo’s personal choice of action.
      Nor does the company report the size of Kallasvuo’s personal bonus. It will not be revealed until after Nokia’s annual report for 2006 has been published.
      The so-called "Connecting People" bonus is not applicable to Nokia’s executive level. Instead, the incentive bonus system of the senior management includes money and share incentives that are linked with the company’s result, personal performance, and the development of the price of the Nokia stock.
      Kallasvuo’s basic annual salary is EUR one million, and his personal bonus could be up to 150 per cent of his basic salary, provided that all targets are met.


Previously in HS International Edition:
  Nokia personnel fume over bonus cuts (1.2.2007)
  Nokia senior clerical employees stage walk-out in Tampere and Oulu (26.2.2007)
  Bollywood and the Nokia Bonus: The Serfs Strike Back (6.2.2007)

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