The CEO's compensation package is now directly tied to the success of the deal, and Nokia's stock price in the next 20 months.
Says the source:
Here’s the new revised deal Mr. Elop gets, depending on how well his strategy works:
His short term cash incentive plan has been reduced to 100% from 150% of gross salary. It means that ~1.5 Million EUR yearly cash bonus Mr.Elop was entitled to if Nokia reached it’s intended targets for 2011 and 2012, is reduced by 500K Euro each year. Annual equity grants are reduced to a level below the competitive market value. Not sure what this one means, my guess is the automatic yearly share grants to Mr. Elop have been reduced. In return Mr. Elop gets an opportunity to earn a number of Nokia shares if overall Nokia share price increases.
Overall Nokia share price performance will be compared to a group of “relevant companies in the high technology/mobility, telecommunications and Internet services industries”. To get any bonus at all, Nokia’s share price performance should be “at the 50th percentile of the peer group”, for the maximum bonus – Nokia should be among the top three of the peer group. Also, the minimum Nokia share price at the end of the 2012 should be 9 EUR. For maximum bonus it should be at least EUR 17.
Simply put, Elop stand to make around 13 million euro if Nokia can make a turnaround in the next couple of years. Unfortunately for the new CEO, the first Nokia WP7 devices will start shipping in 2012, giving him little time to see success.
Written by: Andre Yoskowitz @ 31 Mar 2011 13:08
