The group leadership team of Nokia Corporation (NYSE: NOK / Nasdaq Helsinki: NOKIA) owned about 4,8 million shares in Nokia at the end of 2018. They also have a very lucrative co-investment arrangement, which allows them to invest their own money in Nokia shares and receive two performance shares under the 2018 long-term incentive plan for every share they purchase. The plan vests on 1.1.2021.
I call this lucrative because purchasing and holding on to those shares will expose them to minimal risk of losses. Let's assume the plan vests at 100% i.e. they get two additional shares for every share they have purchased with their own money. That would mean they will make profit even if Nokia would trade at 2 euros (2+2*2 euros). For example, Rajeev Suri purchased the shares related to this plan with average price of 5,25 euros.
Therefore, I wanted to find out that how many shares out of the 2,4 million GLT members own fall into this category (of minimal risk).
Let's start from the CEO Rajeev Suri. He owns 2 473 450 shares out of which 575 309 shares via the co-investment plan. That's excellent news: Vast majority of his stake carries same risk than the rest of the shareholders in Nokia do. What's more: he purchased the maximum amount he was allowed to in the co-investment plan.
The rest of the GLT owned less than 2,4 million shares in the end of 2018 out of which a bit more than a million is explained by the co-investment arrangement. Maria Varsellona, President of Nokia Technologies and Chief Legal Officer, sold recently 128 000 shares so the ratio of "normal shares" to "shares under co-investment agreement" is about 1,3 to 1. Not bad, but not as good ratio as ratio that the CEO has: about 4,3 to 1.
All in all, I would say that the GLT, and especially the CEO, is well aligned with the interest of the rest of the stock holders and takes sufficiently risk also with their own money.
Disclosure: Long Nokia at the time of writing.
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