Bulk of €18.8m payoff coming from Microsoft, which is buying Finnish phone maker
Former Nokia boss Stephen Elop’s proposed €18.8 million pay-off has been slammed by Finland’s prime minister – Jyrki Katainen, as “outrageous,” adding to anger over how the once mighty phone maker is being sold to Microsoft – the company he once worked for as an engineer. Nokia is already facing questions over the size of Elop’s redundancy package, equating as it does to about €1m for every €1 billion in market capitalisation the Finnish group lost under his stewardship. Elop moved from Microsoft to run Nokia in September 2010 and will return to his former employer when the deal is completed. In the meantime the Seattle software giant will fund 70 per cent of his pay-off.
Nokia has countered criticism by saying that it approved the the deal to stop its former CEO from leaving immediately, simultaneously agreeing not to work for Microsoft until its sale to the latter was finalised.
Elop, who became head of Nokia’s mobile business on announcement of the €5.44 billion deal with Microsoft, has already stepped down as CEO but is set to rejoin the US company with the handsets business.
The combined operation will still have a significant presence in Finland as Microsoft is planning to build a big data centre in the north of the country, while some 32,000 Nokia employees will transfer to Microsoft.
But all that has done little to dampen criticism over Elop’s huge redundancy award.
As well as the Finnish prime minister joining with union leaders to protest, the country’s centre-left finance minister, Jutta Urpilainen, has added her voice – claiming in her blog that the deal could be “a threat to social harmony.”
Meanwhile, shareholders in Nokia will vote on Microsoft’s proposed acquisition in November [2-13].
The purchase is set to be completed in early 2014, when about 32,000 Nokia employees will transfer to Microsoft.