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 573127
To read all comments associated with this story, please click here.
RE[6]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 21:20 UTC in reply to "RE[5]: Comment by Nelson"
Nelson
Member since:
2005-11-29

Because Microsoft offered them financial reward and absorbed the downside. They keep the billions they got, don't have to pay MSFT royalties, instantly rid themselves of all debt, and have cash to invest into NSN and AT.

Plus they get to sue Android OEMs while not being able to be countersued. Their patent arsenal is worth billions.

In a risk/reward calculation Nokia kept only the upside.

Reply Parent Score: 3