Linked by Thom Holwerda on Tue 24th Sep 2013 11:44 UTC
PDAs, Cellphones, Wireless

Finland is boiling with rage this weekend over the $25 M bonus payment the CEO Stephen Elop is set to receive as he leaves Nokia after his two-year tenure. Questions are now being raised by the oddest aspect of the bonus: the board of Nokia seems to have given Elop a $25 M incentive to sell the handset unit cheaply to Microsoft way back in in 2010. This effectively means that the board hired a man who was given a giant carrot to drive down Nokia's overall valuation and phone volumes while preparing a sale to Microsoft. What could possibly be a reason to structure Elop's original contract in this manner? Did the board in fact end up promising Elop more compensation in case he sells the phone division than if he runs it with modest success?

Vindication. We were right all along.

Permalink for comment 572997
To read all comments associated with this story, please click here.
Comment by Nelson
by Nelson on Tue 24th Sep 2013 12:24 UTC
Member since:

Considering his compensation is tied to stock options, lowballing the stock (which he hasn't done, or he would've sold it when it was less than $4 a share) wouldn't make sense financially for him.

There was no specific clause in his contract that said "Sell to Microsoft and get $25 million". It merely treats an acquisition the same as being let go from the company compensation wise, a much less serious offense.

The Nokia board could've fired him Sept 4th and he'd still get $25 million.

CEOs have golden parachutes. Who knew. This simpleton view of how companies work is all too common here. I'm glad I ignored the endless piles of bullshit here and loaded up on Nokia stock while it was low, made a nice return.

Elop offloaded an unprofitable division to the best suitor (Microsoft wants Windows Phone, let them finance it) and simultaneously is leaving Nokia flush with cash. Nokia will have billions in cash, no debt, and be impervious to patent litigation. They just beat HTC over non SEPs, the money train is just starting for their patent arsenal.

Market cap is a fickle thing, it was $14 billion prior to the announcement of the deal, its $20 billion now. Setting Nokia up on firm ground and leaving them with nothing but upside is the opposite of killing the company.

But of course, the small minds here are allergic to common sense and don't own any Nokia stock, never shorted any Nokia stock, and couldn't predict what the weather will be like tomorrow let alone the state of a company like Nokia. You have people who judge the company based off of the results of one division, and say its going to die.

BBRY just got cremated, their CEO accepted a $150 million penalty for a non assured purchase, but you're all getting hot in your seats over a golden parachute. Jesus christ.

Edited 2013-09-24 12:27 UTC

Reply Score: -4