The chairman of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has admitted that he made an error in describing the compensation package the company intends to give current CEO Steven Elop when he leaves the firm. Risto Siilasmaa told the Finnish Newspaper Helsingin Sanomat that an accident led him to make the mistake.
The news, which was picked up by the Financial Times, comes in the midst of a disruptive period for the company. There has been public outcry in Finland over the €18.8 million that Elop would receive for leaving the company. Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has laid off many of its staff in Finland as its prospects in the mobile market worsened in recent years.
Nokia Elop payout problems
The Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) chairman originally said that the payout to Elop would be roughly similar to those received by CEOs in the past, but this turned out not to be true. Elop is entitled to €14.6 million of stock options in addition to the eighteen months normal compensation received by other CEOs.
According to the terms of the buyout deal that will see Microsoft Corporation (NASDAQ:MSFT) take control of the Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) handset business, Elop will leave the Finnish firm for Microsoft. Microsoft will pay around 70 percent of the compensation to Mr. Elop.
The compensation deal is roughly equivalent to the amount of equity that Elop held in Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V), according to spokespeople from the company. That fact is not causing the controversy in Finland to die down, however, as the company’s major business moves away from its home country.
Nokia going forward
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has been majorly transformed by the Microsoft Corporation (NASDAQ:MSFT) deal and it has not yet become clear how the firm plans to deal with that future. The company has a couple of cash cows in the form of Nokia Networks and its patent portfolio, and it also has a great deal of cash in the wake of the deal.
Shares in the company have traded up massively based on the company’s new found flexibility, but before the company can deal with the future it needs to deal with closing the Microsoft Corporation (NASDAQ:MSFT) deal. That means selling the gifting of €18.8 million to its former CEO is something it will have to deal with.