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Home BUSINESSNokia chairman defends ‘costly ’ deal of Elop
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Thu, 26 Sep, 2013 01:16:38 AM
FTimes-STT Report, September 26
File picture of the chairman of the Nokia Risto Siilasmaa. Photo - Lehtikuva
The chairman of the Nokia board of directors, Risto Siilasmaa on Wednesday defended the high amount scheduled to be taken by the former chief executive officer Stephen Elop for completing the selling deal of the mobile phone giant Nokia to Microsoft.
“The contract with Elop has been made as per the international law. If the deal was not made at the final stage, the entire amount would go to the shoulders of the share holders,” said the board chairman at a press conference, adding that now the shareholders would bear only 30 percent of the amount.
The rest 70 percent will be taken from the Microsoft, he said.
“I understand very well that the amount is high but the board has to concentrate to the benefits of the shareholders,” said Siilasmaa, adding that it was difficult to change the international practices.
He also hinted that the amount might increase and the final amount would be known after the deal with Microsoft is completed.
The STT calculated that the amount to be taken by the CEO would be about EUR 21.5 million.
Earlier the Prime Minister, Jyrki Katainen on Saturday said that the amount fixed up for Stephen Elop for completing the selling deal was unfair and outrageous.
“If rewarding is outrageous then it feels unfair especially when the economic situation is difficult,” said Katainen in an interview with the Yle TV 1 as the morning guest.
Controversy arose when it was disclosed that the former CEO of Nokia, Stephen Elop is going to get EUR 18.8 million for making the deal of selling Nokia to Microsoft.
The amount was determined by Nokia’s share price on 6 September, three days after the deal between Nokia and the Microsoft.
The financial deal with the former Nokia CEO, however, was criticised by the investors of the Finnish stock exchange.
Mobile phone giant Nokia Corporation on September 3 decided to sell all of its phone sets, services and patent licences to software company Microsoft for EUR 5.44 billion.
Nokia expects to book a gain on sale of approximately EUR 3.2 billion, and expects the transaction to be significantly accretive to earnings.
The transaction between the companies is expected to be completed in the first quarter of the next year after completion of approvals of the shareholders, regulatory approvals and other customary closing conditions.
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