Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s former CEO, Stephen Elop, will receive 24.2 million euros or $33.4 million in cash, which is 25% higher than originally planned. Now Elop is a part of Microsoft Corporation (NASDAQ:MSFT), as the deal between the two companies closed on Friday. He will also get 18.8 million worth of options for the early termination of his contract, which is based on Nokia’s September share price.
Suri to get a lower salary than Elop
Back in September, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) announced that Microsoft Corporation (NASDAQ:MSFT) would acquire its handset unit for 5.6 billion euros. The severance payment for Elop is around 4 million euros. He formally quit his position as Nokia’s chief executive in September, assisting the company to close the deal with Microsoft.
The former CEO received 70% of his severance payment from Microsoft Corporation (NASDAQ:MSFT), and 30% was given by Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V), according to Nokia’s 2013 annual report. Nokia filed a statement in which it revealed that Elop’s successor will get a smaller salary. New CEO Rajeev Suri is estimated to get 1 million euros, compared with 1.1 million euros in of Elop. Suri will also receive a “short term incentive” of 125% of salary and 650,000 shares under a bonus scheme.
Nokia under Elop
Elop earned the most last year compared to any previous years, as he received 9.7 million euros in salary, mostly in stock awards. Under Elop’s time at the helm, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s market value dropped by 17 billion euros to 11 billion euros, and net sales shrunk to half from 10.3 billion euros to 5.7 billion euros. The company’s operating profits declined 70% to 118 million euros from the third quarter of 2010 when Elop took over the post, compared to the third quarter of 2013.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares surged 75% after the announcement of the Microsoft Corporation (NASDAQ:MSFT) deal but are down 25% from the point from where Elop took the company into his hands. Nokia stated that Elop deserves to get the pay what he was contractually entitled to.
Recently Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) revealed its new strategy in the absence of its mobile phone segment. The core business of the company will be its networks business, which includes the mapping business and patent portfolio. Also the company will return $3 billion to shareholders. Nokia’s operating losses came in at 306 million in the first quarter of this year.