Proxy materials for Nokia's upcoming Extraordinary General Meeting published on Tuesday show that the terms of Elop's original 2010 contract were revised on September 3rd of this year.
In his original contract, Elop was eligible for 1.5 years of salary, bonuses and share incentives if the company were to be sold or management replaced. It also included a routine clause that Elop could not work for a competitor for 12 months after leaving the company. He would have lost his share incentives only in the case of being dismissed from his position.
The new contract eased the restrictions on working for a competitor to allow Elop to move back to Microsoft. In complex legalese, it also changed to allow Elop to gain maximum compensation if leaving the company at the moment of operations sales or thereafter. The same benefits would accrue even if Nokia were to fire Elop before the sale.
Two main differences
There seem to be two key differences between the 2010 contract and the one made earlier this month. Elop can be dismissed before the finalization of the sale and still receive full benefits. The other is the easing of the restriction on transferring to a competitor, which will allow Elop to take up a job at Microsoft.
The revisions can be regarded as highly favourable for Stephen Elop, as in practice they guarantee him full benefits under all circumstances that do not arise from a breach of contract for which he himself is responsible.
The bulk of Elop's golden handshake of close to 19 million euros will come in the form of the value of share incentives. These will be paid out under a accelerated schedule, two or three years earlier than would be the case if he were to continue working for Nokia.