Nokia chairman admits to misinformation over Elop payout

Nokia’s chairman Risto Siilasmaa has admitted giving misleading information to the press regarding outgoing CEO Stephen Elop’s exit payout, according to reports in the Finnish news.

Last week it  emerged  that Elop is set to receive a $25m payout for overseeing the sale of Nokia to Microsoft, his previous (and future) employer. In a statement sent to the Financial Times as well as Finnish daily Helsingin Sanomat following that revelation, Siilasmaa said there was “no essential difference” to predecessor Olli-Pekka Kallasvuo’s contract and that the terms in Elop’s contract were similar to Kallasvuo’s.

Yet it has now been suggested that Elop’s contract was designed to deliver a swift and substantial bonus if Elop was to sell the handset unit, according to Helsingin Sanomat.

“The terms and conditions are substantially similar to those of former Nokia CEOs,” Siilasmaa told Sanomat on Friday. However, when news of Elop’s payout broke, he said that there was a “prevalent misconception” about Elop’s contract.

“There was an accident …This is a very unfortunate thing about the case, which, moreover, raises a lot of emotions,” Siilasmaa added.

The newspaper also reports that Nokia has pleaded with Elop to accept a smaller bonus after angry reactions to the payout in Finland.

The windfall has been labelled “termination payments” by Nokia and will be given to Elop if the firm’s shareholders agree to sell the handset business to Microsoft.

Nokia said the payment follows his agreement to step down as Nokia chief and that Microsoft would pay approximately 70 per cent of the total. He will then return to Microsoft after the closure of the deal.

In addition, Elop is entitled to 18 months of his base salary, plus a short-term management cash incentive, a package worth a total of around €4.2m. He would also be in line for around €14.6m from an accelerated vesting of his outstanding equity awards.

Elop moved from Microsoft to run Nokia in September 2010, and will return to his former employer when the deal is completed.

Nokia shareholders are due to vote on the deal on 19 November.