Former Nokia boss Stephen Elop to receive $25m pay-off

http://www.bbc.co.uk/news/business-24171520

by flarg • 13 years ago

34 51 13 years ago

bbc.co.uk

rbanffy5• 13 years ago

What annoys me most is not the evident maneuver that benefited Microsoft alone. It's not that Elop will be rewarded for destroying a company. It's the many Nokia employees who lost their jobs thanks to what amounts to be facilitating an acquisition by screwing shareholders and employees.

Doesn't Finland have laws about this?

bsullivan01• 13 years ago

I don't think he destroyed anything, just Nokia got caught off-guard by the iPhone and never recovered. As for choosing Windows Phone over Android, we'll never know and now it's easier to criticize but I would have done the same thing.

Sometimes it just doesn't work and companies need to reinvent or die.

uio3• 13 years ago

Microsoft "partners" have a history of getting royally screwed. Android was the obvious choice, only a complete idiot (or in this case, a Microsoft mole) would choose otherwise.

Not every company needs to reinvent to survive, plenty of companies perform well sticking in a middle ground. As did all the phone manufacturers who used Android...

GFischer2• 13 years ago

You can look backwards at the "burning platform" thread and discussion:

https://news.ycombinator.com/item?id=2195520

His memo was hailed as a good move, but even then, many (including myself) were arguing for Nokia moving to Android:

SandB0x 954 days ago | https://news.ycombinator.com/item?id=2195699

"Please, please, Nokia, adopt Android and put your efforts into making great hardware to go with it, without ruining the interface like so many other manufacturers do."

Interestingly, the "trojan horse" hypothesis has been around for at least 2 years:

https://news.ycombinator.com/item?id=3928410

with some skeptics unable to believe it (it still sounds farfetched, I believe that the cause was incompetence myself).

nl 504 days ago

"Now, of course, he grasps at a broad conspiracy theory involving Nokia CEO Elop being somehow motivated to deliberately destroy Nokia for Microsoft."

exDM69• 13 years ago

It seems evident that the plan all along was for Microsoft to acquire what's left of Nokia. This was probably blessed by the board of directors in strict secrecy. Of course I'm just guessing here, but the more details are surfacing the more it seems like that. Microsoft is paying 70% of the Mr. Elop's reward (source: Finnish news).

Doesn't Finland have laws about this?

Finnish laws follow Nokia, not the other way around. See "lex Nokia": http://www.theregister.co.uk/2009/03/06/finland_nokia_snoopi...

waps• 13 years ago

Exactly. Especially given Microsofts $250 million prepayment to Nokia.

http://www.engadget.com/2012/01/26/microsoft-paid-nokia-250-...

yummyfajitas2• 13 years ago

How are the acquired shareholders getting screwed? Was Nokia worth more than $5B at the time of acquisition?

rbanffy5• 13 years ago

Nokia was worth much more before Elop announced they would partner with Microsoft.

devx2• 13 years ago

$15 billion whole, so I think the mobile division was worth at least 2x that, especially if we consider that when acquired, companies usually pay a premium over the market price. Motorola was like $9 billion at the market price when Google bought it for $12.5 billion.

speeder4• 13 years ago

Before Elop Nokia was worth 270 billion

pavlov4• 13 years ago

If the pre-Elop executives had been left in charge, Nokia would most likely be in bankruptcy today. The imminent collapse in smartphones was exactly the reason why he was hired.

Under Elop, the loss-making phone business was streamlined to the point that Nokia's stockholders got $7 billion for it, rather than losing the whole company.

For a comparison point, look at BlackBerry. They're basically what Nokia would have become if they had continued on the Symbian+Meego path. Nobody's going to pay 7 billion for BlackBerry at this point.

rbanffy5• 13 years ago

If the pre-Elop executives had been left in charge, Nokia would most likely be in bankruptcy today.

Everybody agrees Nokia needed a change in management. Or, at least, in course.

The imminent collapse in smartphones was exactly the reason why he was hired.

I fail to see this collapse now. Unless you mention Nokia's smartphone collapse, on which case I don't see how Elop averted it.

if they had continued on the Symbian+Meego path.

I keep seeing this excuse as if Nokia would never change course. You know companies do that sometimes.

speeder4• 13 years ago

I doubt it. Nokia had 60% of Brazil smartphone market, and almost the entire normal phone market, and they lost that only after Elop showed up.

Here in Brazil Chinese knockoffs are king now, because no major manufacturer took the niche that Nokia left.

mathattack• 13 years ago

This reminds me of John Thain at Merrill. The company was headed for the toilet before he got there. He was the boss as the share price fell through the floor. He found a buyer, then asked for a large bonus. Ultimately he was rebuked, and left the combined company.

The difference here... The CEO came from the new buyer, and is getting paid off the acquirer. It certainly looks bad. But... If he was wise enough to sell the company before disaster, there is something to be said for that.

programminggeek• 13 years ago

I think it would have been cheaper for Microsoft to just build their own devices than go through all of this to buy Nokia.

devx2• 13 years ago

It was more of a desperate move than a well-planned move that needed to happen. Ballmer cared more about not wanting Nokia to go Android, than about them needing Nokia's hardware division and 35,000 employees.

rbanffy5• 13 years ago

By building their own phones, they wouldn't get rid of a potential competitor.

Without a company the size of Nokia, Windows Phone would be even more irrelevant than it is today.

mbesto• 13 years ago

You know what, I think you're right too. But I'm just an armchair M&A analyst. It's about risk reduction and this is a much safer bet than say perhaps, Kin?[0] There are so many dynamics to this, as it's not as simple as you may think. Just a few factors that often get missed:

- Cost (and time) of go to market

- Cost of marketing

- Cost (and time) of branding

- Emerging market opportunities

This list goes on and on...

Unfortunately what is produced as an offshoot of M&A is a whole bunch of people who start pulling at the windfall straws.

[0] http://en.wikipedia.org/wiki/Microsoft_Kin

meepmorp• 13 years ago

Cheaper, maybe, but this way is probably a faster and less risky means to vertical integration a la Apple; buying Nokia means not having to build out mobile engineering, manufacturing, and supply infrastructure from scratch, as well as (likely) a pipeline of product designs for the next year or two.

Plus, it knocks out some competition.

buster• 13 years ago

Not if you have the opportunity to smash one big opponent. After all Nokia was the biggest phone manufacturer worldwide and if Nokia would have chosen Android and produced high build-quality phones, it could have "easily" become the top smartphone manufacturer again, or atleast number 2.

Now Microsoft has one enemy less and gained a company that was known for it's high-quality phones for years.

pjc50• 13 years ago

Cheaper? Possibly. Quicker? Almost certainly not.

dandrews• 13 years ago

Ellison: "Every ecosystem needs a scavenger".

(Referring specifically to CA, and quoted by Marc Benioff here: http://www.blnz.com/news/2008/02/19/SaaS_Have_Breakout_Accep... )

Fuxy• 13 years ago

Nokia had an interesting vantage point.

Usually disruptors start with a very low end non significant part of the market and chase competitor gradually out.

That's what they were left with after the unexpected smartphone boom.

So the chance for them to recover was there with a small shift in strategy but after they gave that up and bet everything on Microsoft they got doomed.

cja• 13 years ago

It was obvious that Nokia should have gone with Android because of its popularity versus Windows Phone. Elop surely guided them towards Microsoft even though it was the inferior option.

Imagine if Nokia had gone with Android two years ago. Nokia's build quality and cameras plus pure Android versus Samsung's build quality and Touchwiz would have made Nokia the obvious choice for many smartphone buyers.

I'd kill for a Nokia Android phone.

throwawaykf025• 13 years ago

In the interest of DRY:

Yay-sayers: "That's not obvious at all -- look at all Android manufacturers other than Samsung"

Nay-Sayers: "Nokia had the capability to sufficiently differentiate their hardware to avoid the fate of LG, HTC et al."

Neutral: "We'll never really know."

Former Nokia boss Stephen Elop to receive $25m pay-off

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