Nokia chairman: 'I was wrong about Elop's pay'

Risto Sillasmaa has admitted he was wrong to say Stephen Elop's pay deal is the same as his predecessors'.

by Emma Haslett
Last Updated: 25 Sep 2013
Hilary Clinton might prefer to refer to this sort of thing as ‘mis-speaking’, but Risto Siilasmaa has called it an ‘accident’: whatever its epithet, the Nokia chairman has admitted that comments he made about chief executive Stephen Elop’s bonus were, well, wrong.

Elop will receive a $25.4m (£16m) pay-off when the €5.44bn (£4.6bn) takeover of Nokia by Microsoft goes through.

The payoff has caused a national furore in Finland, where the phone manufacturer is based: ostensibly in an effort to pour water on the fire, Sillasmaa had told Finnish newspaper Helsingin Sanomat that Elop’s contract was the same as his predecessor’s. It turns out that’s not strictly true: Elop is eligible to receive €14.6m in share options that previous chief executive Olli-Pekka Kallusvuo wasn’t.

Nokia said on Sunday that it had changed Elop’s contract at the same time as the deal went through to ensure he didn’t resign. What’s actually the case is that a 2012 US Securities and Exchange Commission filing shows that if he resigned after a takeover, he would be entitled to 18 months’ pay and his ‘unvested equity will vest in an accelerated manner’.

Part of the reason Finns are up in arms over the deal is because the company is a source of national pride and the idea of Yanks taking it over is painful. So controversial has it been that both the prime minister and finance minister - neither of whom are in the habit of commenting on executive pay - have spoken out against the payoff. Prime minister Jyrki Katainen called it ‘quite outrageous’.

To be fair to Elop, he has effectively engineered the rescue of a company that had been struggling to compete in the age of the smartphone. For that, we’d argue he deserves a decent reward.

But the payoff is part of a wider argument about executive pay and whether those at the top are getting rewards that can be considered proportionate. Usually, the argument in favour of big rewards is that if we didn’t do it, talent would go elsewhere. But this battle is taking place in Finland, suggesting the UK isn’t the only country where this is happening.

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