Controversial outgoing Nokia boss gets massive $25.5 million payday on sale

Outgoing Nokia chief executive Stephen Elop is set to receive a €18.8 million ($25.5 million) golden parachute if shareholders agree to sell its mobile phone division to Microsoft for $US7.2 billion.

According to Reuters, Elop’s termination agreement is set to include 18 months of his base salary, worth around €4.2 million, along with €14.6 million accelerated vesting of his outstanding equity awards.

Elop had emerged as a favourite to replace outgoing Microsoft chief executive Steve Ballmer, with bookmakers offering 5-to-1 odds of Elop taking the helm of the tech giant even before Microsoft’s takeover of Nokia’s handset business was announced.

For its part, Microsoft told Reuters today it currently has no update on its search for a new chief executive.

However, Elop’s Windows Phone strategy and decision to sell the handset division to Microsoft remains controversial, especially in Finland where some tech bloggers have described him as being a “Trojan horse” who sold off a national icon.

“Under Elop, Nokia exchanged strongly growing smartphone unit sales for a record-setting collapse of smartphone sales. Nokia shrunk literally to one-tenth its size in a market that tripled in size. Nokia’s dominating market share of 35% is now 3% and falling,” outspoken former executive and industry analyst Tomi Ahonen said.

In its second quarter results, the Finnish communications giant saw its net sales plunge 24% year-on-year, from €7.542 billion for the second quarter of 2012 to €5.695 billion for the same quarter this year.

Unit shipments were down across every region, including Europe (down 26% to 11.3 million units), Middle East and Africa (down 15.5% to 16.6 million), Greater China (down 48% to 4.1 million), Asia-Pacific (down 29% to 20.2 million), North America (down 17% to just 500,000) and Latin America (down 29% to 8.4 million).

The picture was no better in its Lumia smartphone unit, where unit shipments fell 27% from 10.2 million units a year ago to just 7.4 million this year.

The poor results led to Elop being heckled by angry shareholders at the company’s annual general meeting this year.

“You’re a nice guy… and the leadership team is doing its best, but clearly, it’s not enough,” a shareholder named Hannu Virtanen told Elop.

“Are you aware that results are what matter? The road to hell is paved with good intentions. Please switch to another road!”

While Elop’s golden parachute is impressive, it remains significantly less than the lavish $US55.6 million BlackBerry’s chief executive Thorsten Heins is set to receive if his company is sold.

If Heins is terminated without a change of control, he is set to be rewarded with a far more modest total compensation package of just $US22 million, along with an annual incentive payment of $US2.8 million.