Finnishing the job. Nokia destroyed but ex-CEO gets US$25 million to rejoin Microsoft.
Elop's payoff was disclosed yesterday in a Nokia regulatory filing. It is astonishing. Mr. Elop departed Microsoft in September 2010 to become CEO at Nokia of Finland. Under his leadership the company's fortunes went from bad, to worse, to hopeless. Three years into his tenure at Nokia's mobile telephony business, the jewel in the company's tarnished crown, is sold to Microsoft for $7.2 billion. As part of the sales agreement, Stephen Elop will go back to work at Microsoft.
Mr. Elop still has a home in sunny Redmond. Neither he nor his family moved to Finland, he just wafted back and forth on the wings of hot air and the updraft from Nokia's burning platform. That says a lot about commitment, short-termism and reality.
Once the acquisition gets Nokia shareholder and then regulatory approval (which it will: Nokia shareholders vote on the deal on November 19 and they are going to take the money and run) Mr. ELop will get his $25 million and more "welcome home" bonus. Seventy per cent of that sum will come from Microsoft but 30 per cent will actually be paid by Nokia.
The sum to be awarded to Mr. Elop is based on Nokia's share price as at the closing bell on September 6 this year. Since he took the reins three years ago Nokia's share price has fallen by more than 34 per cent - and that includes the 'dead cat bounce' stock price increase that followed the announcement of the sale to Microsoft.
According to a Nokia statement, Stephen Elop is entitled to the money as he had agreed to step down as CEO with immediate effect when the sale of Nokia's handset division was announced. Thus he will get 18 months of 'basic' salary, a 'short-term management cash incentive' of $4.2 million (why that should be is unclear) and will be able to realise some $14.6 million from 'the accelerated vesting' of 'outstanding equity awards'. Ye Gods.
Soon, Stephen Elop will be the head of Microsoft’s handset division but, presumably to avoid accusations of 'conflict of interest', he will not be CEO of that business. He will instead be executive vice president for devices and services. But we know who'll be pulling the strings.
And, by the way, who was it that set the 'burning platform' ablaze?