Today a Nokia filing detailed the compensation package that outgoing CEO Stephen Elop will receive as he transitions back to his former home, Microsoft, along with large chunks of the company that he led. He’ll take with him around $18.8 million euros, or $25.5 million dollars.
Microsoft will pay 70 percent (13.17 million euros) of that fee, and Nokia will pay the rest (5.65 million euros). The total sum includes Elop’s base salary, “management incentive” and an equity chunk that is currently valued using a Nokia per-share price of 4.12 euros. That’s the level that Nokia traded at before the deal was announced, so Elop is not being paid a premium on that bit of his compensation for having arranged the deal; this removes any potential financial chicanery from occurring.
The sum is small compared to the 5.44 billion euro deal in which Microsoft will acquire key Nokia brands and the company’s handset business, totaling just 0.35 percent of the larger deal. Still, it’s a handy chunk of change for Elop, and a more-than-polite welcome-home gift.
Elop is an oft-discussed potential next CEO for Microsoft. Elop’s return to Microsoft with pieces of Nokia stuffed into his pockets will fuel the persistent speculation that he has long been a plant inside the mobile giant. I’ve never felt that the idea had any truth to it. Elop’s return is as innocuous as his initial departure, as was the Nokia choice of Windows Phone over Android as its next platform of choice. Is Microsoft unhappy with how things shook out? No, but not every pleasant occurrence is call for conspiracy.
The Nokia-Microsoft deal is expected to close in early 2014. That said, most are treating the agreement as done: Microsoft pays a large stack of its foreign cash to pick up the handset assets of Nokia, thus bringing under its own roof the phones that constitute almost 90 percent of its Windows Phone unit volume. It therefore regains control of its own mobile platform, and Nokia can do something else with hopefully stronger margins.
For now, Elop gets a fine check if his deal pulls through, and it should.
Top Image Credit: Vernon Chan