The chairman of Nokia has admitted that he accidentally misled the public and Finland's prime minister over an €18.8 million pay-off to former chief executive Stephen Elop triggered by the sale of the mobile phone business to Microsoft.
Risto Siilasmaa, Nokia's chairman, had tried to calm growing national anger at the massive pay-off by saying that the terms were "substantially similar to those of former Nokia CEOs". But he was yesterday forced to admit that the Canadian will pocket €14.6 million more than the previous Nokia boss, Olli-Pekka Kallasvuo, collected when he was fired three years ago.
Mr Siilasmaa told Finnish news site Helsingin Sanomat that an "accident" during the formulation of the contract meant that Mr Elop would collect the huge sum. "This is a very unfortunate thing about the case, which, moreover, raises a lot of emotions," Mr Siilasmaa said, according to a translation of the Helsingin Sanomat article. Nokia declined to comment further last night.
Filings with the US regulator the Securities and Exchange Commission reveal that Mr Elop's contract requires him to be paid €14.6 million in share awards on top of 18 months' salary. Mr Kallasvuo collected only 100,000 shares on top of 18 months' pay.
Mr Siilasmaa’s admission is likely to reignite the heated national debate over Mr Elop’s pay-off, which was triggered by Microsoft’s €5.5 billion takeover.
Jyrki Katainen, the Finnish prime minister, criticised the pay-off on national TV on Saturday as "outrageous". "Many, with reason, are sure to be thinking about what is reasonable," he said. "Apparently the practices of rewards by large corporations are so exceptional that they cannot be understood with common sense."
Jutta Urpilainen, the country's centre-left finance minister, said the pay-off could spark unrest. "In addition to the general toxic atmosphere, it may be a threat to social harmony," she wrote on her blog.
The payout works out at roughly €1 million for every €1 billion wiped off Nokia's market value under Mr Elop's leadership. – (Guardian service)
