The world's leading cellphone maker has bet at least $6 million that Stephen Elop can fix its problems.
The company disclosed today in SEC filings that it will give its new CEO just over $6 million in a one-off payment for joining Nokia from Microsoft -- $3 million last October and $3 million more next October. The payments are compensation for lost income from his prior employer, according to the filing. Elop also received equity in the company, including 500,000 stock options. In the event of termination in the absence of cause, the CEO would get severance of up to 18 months of total compensation.
When Elop joined Nokia on Sept. 21, 2010, critics wondered if he could fix the Finnish company's problems, including a "market share death spiral" and an operating system that was "dated and losing ground."
Elop himself eloquently described the problem in early February, saying that Nokia was "standing on a burning platform" and needs to "change [its] behavior."
Change came a few days later when the company announced the end of Symbian, the operating system that runs on its smartphones, and a joint venture with Microsoft to develop its Windows 7 mobile operating system.
Speculation inside and outside of the company swirled as to how many Nokians would lose their jobs -- 20,000 was a number being thrown around. The company has 132,000 employees worldwide, according to its most recent filing.
Elop's one-time payment is in addition to a €1.05 million annual salary plus bonuses (about 17% less than the €1.23 million his predecessor, Olli-Pekka Kallasvuo, was earning).
In addition to discussing Elop's compensation, today's 20-F filing details possible pitfalls of Nokia's new partnership with Microsoft. The transition from Symbian to Windows 7, for instance, will take about two years. If the prediction proves correct, Elop will get the second installment of his one-off payment a year before the outcome of his first big strategic decision.
Write to Jeremy Greenfield