To put the blame for Nokia’s problems all on the shoulders of Stephen Elop would be absurd, but he came to the company from Microsoft, bet the company’s future on the Windows Phone operating system, and it was a huge disaster. Now with the one-time market leader no longer viable as an independent company it’s being bought by Microsoft and Elop will find himself earning about $25 million in bonuses as part of Nokia contractual arrangements for a change in corporate control.
That’s a hell of a contract. Oh yes, and he’s failing up. Here are the reasons why according to Nokia (which Elop still runs?):
The first was to stop Mr Elop resigning. He could have resigned because of the change of control and still received the pay-off. “The amendment was made to keep him on board,” Nokia said.
Microsoft is keen to retain Mr Elop because the US group wants him to run the mobile phone unit, and he has been talked about as a favourite to replace Steve Ballmer as Microsoft chief executive. As part of the deal, Microsoft has agreed to cover 70 per cent of Mr Elop’s pay-off, with Nokia paying the remainder.
“They didn’t have to pay it legally. But they also want to ensure he comes and properly integrates the devices and services business,” Nokia said.
The second reason was that his original contract contained a non-compete agreement that included Microsoft among the list of companies that he could not join. That clause had to be altered to allow him to go to Microsoft with the unit when the deal closes, in the first quarter of next year.
The third reason, Nokia says, is to regulate what would happen were the deal to collapse. Nokia says the contract now says he could be reinstated as chief executive but he would give up all his equity awards.
I’d rather just have the phone.