Nokia’s interim boss has admitted making error when comparing the pay of former chief executive Stephen Elop and his predecessor Olli-Pekka Kallasvuo as more details emerge of controversial changes made earlier this year to Elop’s contract.
The company confirmed that Risto Siilasmaa, the interim boss, made an error when stating that Elop’s contract, which contains an €18.8 million [£15.87 million] termination payment, is exactly the same as Kallasvuo’s contract.
"All the details were not checked," he told Finnish daily newspaper Helsingin Sanomat, something that was confirmed to Reuters by Nokia’s legal department, which called the earlier claims “a working place accident”.
Elop, who stepped down as Nokia CEO to avoid a conflict of interest, has a contract that contains a “change of control” clause that permits him 18 months of his base salary and a cash incentive that have a combined worth of €4.2 million [£3.5 million]. He is also entitled to receive approximately €14.6 million [£12.3 million] from an “accelerated vesting” of outstanding equity awards.
Kallasvuo did have the “change of control” clause in his contract but not the equity rewards clause that makes up the bulk of Elop’s compensation payment, 70 per cent of which will be paid by Microsoft.
There’s more controversy with the news that Elop’s new contract was only revised around the time that Nokia and Microsoft were agreeing a deal for the latter to acquire Nokia’s smartphone business and license its patents. In addition to the financial terms outlined above the new terms relaxed restrictions on working for a competitor and allowed Elop to return to Microsoft.
Elop was Nokia’s first ever non-Finnish CEO and at the time of his appointment the company board of directors changed his salary to award a bonus worth around €13 million if the Nokia and Windows Phone partnership was a success. When the deal is completed Elop will become the executive vice president of Microsoft.
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