Elop Pay-off Threatens Finland’s Social Harmony
The $25 million (€18.8 million) payout to Nokia CEO Stephen Elop “may be a threat to social harmony,” says Finland’s finance minister Jutta Urpilainen.
There is widespread anger in the country over what has happened to Nokia since Elop took over and the proposed mega pay-out to him.
Nokia’s market cap has fallen by €19 billion during Elop’s tenure. Now, following the proposed sale of the handset business to Microsoft, he’s to get €18.8 million.
“It is quite outrageous,” says Finland’s Prime Minister, Jyrki Katsinen, “”the practices of rewards by large corporations all over the world are so exceptional that they cannot be understood with common sense.”
“It really is appalling,” said Timo Soini, head of the main opposition True Finns party, “most definitely people are angry.”
The Mayor of Oulu, where Nokia has a large part of its business said: “In Finnish behaviour such huge bonuses are unacceptable.”
Next month Nokia shareholders are to vote on the deal to sell Nokia’s handset business to Microsoft and, in a statement to the shareholders ahead of the meting, Elop’s pay-off is explained.
‘Mr. Elop will be entitled to receive 18 months of his base salary and management short-term cash incentive (calculated at 100% of target) as well as accelerated vesting of his outstanding equity awards.’
It goes on to say that the compensation payments: ‘Are estimated to be approximately EUR 18.8 million in the aggregate. This amount includes: base salary and management incentive EUR 4.1 million, value of benefits EUR 0.1 million and pro forma value of equity awards EUR 14.6 million.’
30% of the amount (EUR 5.65 million) will be borne by Nokia and the remaining 70% of the amount (EUR 13.17 million) will be borne by Microsoft.
The payout has sparked speculation that Elop’s employment contract was skewed to reward a sale of the company
Recently it was revealed that the CEO of Blackberry, Thorsten Heins, had contractual terms which meant he received $55 million if he sold the company.Tags: base salary, cash incentive, compensation payments, finance minister, target