Nokia's outgoing CEO Stephen Elop is to receive €18.8m ($25.5m) from Nokia and Microsoft due to contractual clauses pertaining to a change in control of the company.
Revealed in a "proxy materials" document by Nokia, Elop's payout includes 18 months of his current salary plus a "management incentive", 70 per cent of which Microsoft will provide, with the other 30 per cent contributed by Nokia.
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The quoted total assumes a Nokia closing share price of €4.12 for each of the company's shares, and the document also states that, having accepted the payment, Elop will be "subject to a covenant restricting him from working for certain specified competitors of Nokia", provided that upon Elop's commencement of employment with Microsoft, Nokia will waive his competition restriction to Microsoft.
The revelation of such a large payout for Elop will not help calm the criticisms of those who suspect the Nokia CEO had a vested interest in the Finnish company's $7.2bn sale to Microsoft.
Three years ago, when Elop left Microsoft for Nokia, he received a $6.2m "golden hello" for joining the company. The benefits the executive is enjoying from moving jobs sit uncomfortably next to a deal that many are saying seriously undervalued Nokia's devices division.
Risto Siilasmaa, current Nokia board chairman, who will become interim CEO upon Elop's departure, will receive €500,000 as "compensation for his additional responsibilities" as CEO. Sixty per cent of this figure will be paid in cash, while 40 per cent will come in the form of "shares from the open market".
