Nokia chief executive Stephen Elop is catching heat today in Finland after the country’s biggest newspaper, Helsingin Sanomat, reported that Elop was guaranteed a $25 million payment if he was able to sell Nokia’s cellphone business.
For Finns, who view Nokia as a national treasure, that’s an outrage. From the newspaper’s view, the bonus gave Elop the incentive to tank the stock, sell the handset business for cheap to Microsoft, and pocket a big payday. That’s a pay structure that is not aligned with the interests of the company’s shareholders.
The newspaper said that Risto Siilasmaa, chairman of Nokia’s board, misrepresented facts last week when he claimed that Elop’s bonus was similar to those of previous Nokia chief executives. But Nokia acknowledged Tuesday that Elop had received a contract that included the $25 million payoff.
Nokia is now doing damage control, partly by asking Elop to accept a smaller bonus, according to Helsingin Sanomat. Elop is reportedly resisting that plea because he is getting divorced. That’s quite a melodrama.
Microsoft knew that its takeover of Nokia’s phone business would be controversial, so it agreed to spend $250 million on a data center in Finland. Now that gesture of goodwill will likely go unappreciated.
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