Nokia will pay CEO Stephen Elop €18.8 million ($25.5 million) as a farewell gift when he leaves for Microsoft, the company announced today (pdf p32). Here’s how it breaks up: Elop will receive 18 months worth of base salary and management incentive, which amount to €4.1 million, another €100,000 in benefits, and stock worth €14.6 million when calculated at the Sept. 6 closing price of €4.12. That’s a pretty sweet deal for Elop. Nokia stock closed at €2.96 on Sept. 2, the day before its sale to Microsoft was announced. On Sept. 3, it closed at €3.97. That’s an extra €4 million the news of the sale added to Elop’s golden parachute. Of course if the value goes up still further by the time the sale closes, so much the better for Elop.
As the Financial Times wryly notes (paywall), Elop will receive “€1m for every €2.5 billion of corporate value lost under his leadership.” Nokia shareholders might not be ecstatic about the idea of giving a big gift to the man who oversaw an 85% drop in the company’s value during his time at the helm. They needn’t worry. Nokia will only contribute 30% of the total award, leaving Microsoft to pick up most of the tab. Considering Elop was Microsoft’s man in the first place, that is perhaps a small price to win him back.