Nokia chairman admits mistake over $25 million Elop payoff

Ville Mannikko | Bloomberg | Getty Images

Nokia's chairman has admitted that he gave misleading information about the 18.8 million euro ($25.4 million) payoff to former chief executive Stephen Elop, as the Finnish mobile firm faces increasing pressure over the saga.

Risto Siilasmaa, chairman of Nokia, had originally said that Elop's deal was "substantially similar" to previous CEOs, in an attempt to calm the growing furore in Finland against the company.

But the chairman told Finnish newspaper Helsingin Sanomat, that an "accident" meant that he had said Elop's contract was the same as his predecessor. The Canadian will bag 14.6 million euros more through stock awards than his predecessor Olli-Pekka Kallasvuo.

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The admission caused further embarrassment for Nokia, after the Finnish prime minister, Jyrki Katainen, called Elop's payoff "outrageous" on Saturday in an interview with Finland television station Yle TV 1.

Elop's payout was triggered by Microsoft's 5.44 billion euro buyout of Nokia's mobile phone business.

The difference in payouts between Elop and Kallasvuo is laid out in documents to U.S. regulators. In Nokia's 2009 filings with the Securities and Exchange Commission (SEC), the group said Kallasvuo was entitled to 18 months of compensation in salary and bonuses in case of a change of control. No promise of stock awards is noted.

But the 2012 SEC filing set out different terms for Elop. In the event of a change of control, the former Nokia boss could resign and be awarded 18 months of compensation and "his unvested equity will vest in an accelerated manner", resulting in 14.6 million euros more through stock awards than Kallasvuo.

(Read more: Is Elop being groomed to take over top job at Microsoft?)

Elop joined Nokia in September 2010 from Microsoft and was given a $6 million signing-on bonus on top of his $1.4 million salary.

Nokia said on Sunday that it amended Elop's contract at the same time it struck the Microsoft deal to ease restrictions on him working for a competitor. That would allow the former CEO to move back to Microsoft. The Bill Gates-owned company is paying 70 percent of the payoff.

Elop is set to return to his former employer when Microsoft completes the acquisition of Nokia's devices business.

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