Elop to get €18.8m payout once Nokia-Microsoft deal goes through

Elop to get €18.8m payout once Nokia-Microsoft deal goes throughStephen Elop stands to benefit to the tune of €18.8m as he prepares to return to Microsoft after engineering the sale of Nokia's handset business to his former paymasters in Redmond.

This just three years after he was paid $6.2m to go the other way – a period which has seen the Nokia's value shrink dramatically to the point where Microsoft paid just £4.6bn to take over what was until recently the world's leading phone manufacturer.

The details of Elop's payoff were revealed in the supporting materials put together ahead of Nokia's extraordinary general meeting on November 19, where the board will vote whether to ratify Microsoft's takeover bid.

It's hardly likely to make Elop any new friends, considering it means his payoff for leaving Nokia is more than double what he earned in his three years actually working for the company.

It's also hard to disagree that the only person who's actually benefited from the whole affair is Elop himself.

Elop, formerly the head of Microsoft's Business Division, was appointed new Nokia CEO in September 2010, becoming in the process the first non-Finn to head the company.

Nokia was looking to fresh blood to lead the company in a new direction after having been caught flat-footed by the rise of high-powered all-touch smartphones, and within months Elop had decided drastic action was needed.

After famously describing Nokia as being on a “burning platform” in an internal memo in February, Elop announced Nokia was cutting its losses on its own Symbian and MeeGo platforms and adopting Microsoft's Windows Phone instead.

The move was by no means popular, and with Nokia's Lumia smartphones still struggling to make an impression two and a half years later, it still isn't.

And now comes the latest chapter in this long-running saga, with Microsoft having agreed to pay £4.6bn for Nokia's phones division, including the Lumia and Asha product ranges and a 10-year licence to Nokia's patent portfolio.

It's a fraction of what Nokia was worth when Elop took over – as the Financial Times puts it, Elop is now earning €1m for every €1bn in value Nokia has lost under his leadership.

Elop has now stood aside, handing over day-to-day leadership of Nokia to interim CEO and current Nokia chairman Risto Siilasmaa. But when the deal is completed, he'll be back at Microsoft as an executive vice-president, with many saying he's the leading candidate to take over from Steve Ballmer when the Microsoft boss steps down next year.

For the final word, we can't better what Finland's economy minister Jan Vapaavuori told a Finnish newspaper this week: “I find it difficult to understand the merits of this bonus.”

Read more about: Windows Phone

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4 comments

JanSt / MOD  Sep. 19, 2013 at 19:59

Jan is right

babylon  Sep. 19, 2013 at 20:27

Trojan Horse springs to mind for some reason.

JanSt / MOD  Sep. 19, 2013 at 20:47

Plenty of reasons, actually.

CTPAHHIK  Sep. 20, 2013 at 11:11

Wow, Elop single-handedly redefined leveraged buyout.

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