HELSINKI -- Nokia (IW 1000/109) chairman Risto Siilasmaa today defended a $25.4 million payoff to former chief executive Stephen Elop as part of Microsoft's (IW 500/16) takeover of Nokia's mobile phone unit.
Siilasmaa told Finnish daily Helsingin Sanomat he was "proud" of having changed Elop's contract the day before the Microsoft deal was announced, so that the U.S. company bore 70% of the cost.
Without the change, the ailing Finnish company would have had to pay the entire cost for its outgoing chief's golden parachute, he said.
"In both cases, he would have received the same compensation, but if the contract hadn't been changed, the shareholders of Nokia would have paid in full," Siilasmaa said. "The change was made to defend the interests of Nokia, and I'm proud of that."
The sum, more than four times the amount of Elop's annual compensation last year, has stunned egalitarian Finland, where wage rises are typically regulated in national accords between trade unions and employers.
Finnish Officials Decry Payoff
Finnish Prime Minister Jyrki Katainen slammed the amount as "crazy" and "incomprehensible to common sense," while finance minister Jutta Urpilainen called on the Nordic nation's companies to "moderate" executive pay.
The fact that Elop presided over the decline of what was once a national champion has added to the outrage.
Nokia hired Elop from Microsoft in 2010 to help Nokia recover from having missed the shift to smartphones, and as part of the sale will rejoin the U.S. software giant. Elop has been rumoured as a possible replacement for outgoing Microsoft chief Steve Ballmer.
Siilasmaa gave no indication as to whether the amount could be revised downwards.
Nokia said on September 19, two months before shareholders are due to vote on the sale of its handset business, that Elop would receive 14.6 million euros in the form of Nokia stock, and the rest in cash.
The Nokia chairman argued that the sum was "in line with international remuneration practices" for leaders of multinational companies, but conceded that these amounts were usually "significant."
Copyright Agence France-Presse, 2013
