That is just f*cked up but hardly surprising. How can anybody be elected CEO when it's pretty clear he will see to his own interests rather than the companys interests?
His interests ARE aligned with Nokia. Like every CEO everywhere, a big chunk of his comp package is bonus and stock options.
Much ado has been made about him having $0 Nokia stock. This just means that he hasn't executed any of his Nokia options yet, and hasn't been awarded any stock as part of his bonus yet. Neither is suprising: He hasn't been with Nokia for a year yet and he certainly has a vesting schedule.
to be fair, he might have options or other incentives structured around nokia stock. i'm not sure he should be expected to sell all his microsoft shares on leaving the company- perhaps put it in the control of a trust so that it doesn't look like a blatant conflict of interest?
"i'm not sure he should be expected to sell all his microsoft shares on leaving the company" - Why not? Executive options are explicitly justified with reference to their incentive value.
Yeah, it seems like a bit of a misleading way to put it. $3.12 million is a lot, and perhaps a story in itself, but 7th largest individual stakeholder sounds a lot bigger.
yeah, and Bill Gates with his mere 6.95% is totally irrelevant too. I mean, I probably could own and influence as much of MSFT trough various Vanguard ETFs!
I guess I don't understand your sarcasm. With only $3m in stock, even if he made the stock rise 5% with this deal, that's only an increase of $150k. I'd say his financial future is far more tied with the success of Nokia than Microsoft.
"I guess majority of his current net worth is in MSFT"
That would mean that his net worth is only around 4-5 million and I doubt that is the case...
What reitzensteinm means is that his stake in Microsoft is probably only a small part of his net worth. I would also guess that he owns significantly more (from a number_of_shares*share_price point of view) of Nokia than of Microsoft. That is why "his financial future is far more tied with the success of Nokia than Microsoft".
his holdings of NOK are reportedly 0 so far, which makes sense - he's been on the job for less than a year so 1st vesting cliff haven't been reached yet.
Given that he has been a Microsoft veteran, it's hardly surprising that (1) he's a big shareholder, and (2) whatever decision he makes as Nokia chief, his position as one of the largest individual shareholders of Microsoft will come into scrutiny.
I think it's naive to say that he chose to go down the Microsoft route because he is one of its largest individual shareholders. It is equally as likely that Elop would have made his decision regardless of his $MSFT stock ownership. A little too much FUD for me in this case.
Would you like people to talk about you like this just because you switched jobs after 2 years time?
if I switched 3 senior executive jobs in 4 years and then went on to become CEO one of the most known companies in the world today, then yes, absolutely.
Oh come on, no sane person is arguing that Elop went the Microsoft route _because_ he's a big shareholder. The reason people bring up the issue of the stock he owns is to point out that not only his decisions at Nokia are mostly consequence free for him personally, but he also stands to benefit handsomely form this decision that many argue is very bad for Nokia and very good for Microsoft.
The scrutiny in this case comes directly from the fact that Elop's actions at Nokia are very much Microsoft centric, and arguably Microsoft serving.
There is absolutely no way he could have made such a move without the board's blessing; perhaps it was even their expectation that bringing him in would improve a deal they wanted to make with MS. I don't understand at all why you'd hint that this is "Microsoft serving" when it is clearly the will of the board of directors that this happen for Nokia.
No he doesn't. WP7, even under the best case circumstances, will have limited impact on Microsoft stock. People with tens of millions of dollars are connected to far better investment opportunities than making a stock bump up in value a few percentage points.
Do we really need a deep conspiracy theory angle to explain the deprecation of a horribly lagging OS (Symbian) and a next-gen OS whose development was severely lagging even behind WP7?
The board brought on Elop to do precisely what he did - any ire should be directed squarely at them.
Say what you will about RIMM, at least they aren't striking at the prospect of QNX replacing their OS.
If you're referring to sales of the N900, it's shocking to remember that it shipped at almost the same time as the Motorola Droid (one of the first Android devices really suited to consumer needs). Consider all of the development to Android in the intervening 15 months, the dozens of models Google's partners introduced, the millions of units sold... the N900 is as relevant to this discussion as the Razr.
WP7 hasn't been a runaway success, but at least it's stable, polished and backed by fairly advanced web services. The bet is essentially that Nokia's 1st rate supply chain combined with a polished new OS can sell more than either could have otherwise.
That talks more about Nokia's brand than about Maemo or Meego. I was among the first to buy a Maemo device, the hardware rocked but the software was average.
As Nokia said, it is a war of eco-systems now; not devices. Even a low-end Android beats a better spec'ed Nokia because the software is so much better. The quality of apps on Ovi store says it all.
Yup, and now they totally gave up in the ecosystem wars giving their portion to Microsoft. Dumb move considering the market leader position (still over 30% with Symbian), brand loyalty, and huge mass of devoted developers. Technology pieces were falling in place with the newly announced Qt support on Ovi Store apps. There's no way someone thinks this deal was good for Nokia.
Technology pieces were falling in place with the newly announced Qt support on Ovi Store apps?
Really? The Ovi Store is pathetic, and even though they have improved a bit recently it comes nowhere close to the other platforms. Casual games are very important, Ovi has less to offer than the nascent Windows Marketplace.
I am among the few who think this is better for Nokia, given the alternative. Nokia is a hardware company. They don't do great software, and they just accepted that fact.
Btw, they might have a gotten a good deal with Microsoft too, given the situation MS itself is in. WP7 is a great OS, and the collaboration with Nokia could see it appearing on cheaper devices. Nokia is famous for making affordable devices that can survive a drop or two. In fact, I know many people who WANT a Nokia with a decent OS.
The thing is QNX alone was never the solution to RIM's problem, it's just a powerful OS. RIM did take a good look at itself and use other purchases and in house talent to build a pretty amazing UI on top of QNX.
The partnership is still suspicious; any reasonable person would tell you Nokia should have picked Android instead. There's no competitive advantage picking up WP7, unless microsoft wanted to subsidize every nokia handset
It's interesting to see him acknowledge directly that his personal familiarity with Microsoft played a role in the decision (at about 1:00 in). But aside from that, well... opinions differ. At about 3:15, he said that the danger if they went with Android is:
1) The platform would succeed.
2) They'd be one among a crowd of Android phone manufacturers.
3) It would be hard to differentiate from the others.
Contrast that to Windows Phone 7, where:
1) The platform is playing catch-up, and may fail entirely.
2) They're already one among a crowd of Windows Phone manufacturers, with LG, Samsung and HTC already shipping, and Dell having devices in the pipeline.
3) The party that controls the platform has chosen not to allow differentiation, requiring all the devices to be lookalikes[1].
On all his supposed drawbacks of Android, WP7 looks even worse.
There's some other odd stuff in the video, which begs for explanation. He starts by saying that "Microsoft has placed a large bet on us." But it isn't yet obvious why Microsoft has bet more on Nokia's success than it has on the success of the other WP7 handset manufacturers. And if they have, I can't imagine HTC or Samsung being happy about it.
There's also some stuff at about 2:30 about how each party has licensed technology from the other, with an implication (though not an outright statement) that money might be flowing both ways. If that's true, it raises the possibility that the sale of an HTC WP7 handset results in royalty payments to Nokia, for the mapping technology that Microsoft has licensed. That could cause real friction with the other vendors.
(To clarify: the mapping technology bit was part of the announcement, though it wasn't clear what it was doing there; the payment structures were not announced, but Elop did seem to imply in that video that money would be going both ways, and I'm not sure what other reason there is that Microsoft would have to write checks to Nokia.)
> I'm not sure what other reason there is that Microsoft would have to write checks to Nokia.
Microsoft is already in the habit of paying companies to force their users to use Bing search (see Verizon replacing Google search with Bing on some of their Android phones).
Though for Nokia's sake I hope they're not getting paid per use but per device. Bing's quality outside the US is dreadful, so the vast majority of Nokia's customers are either getting a crappy experience or will somehow need to replace the default search engine.
It's funny how people pick on Windows Desktop and Android for setting off a race to the bottom among manufacturers and then say there is no competitive advantage when one manufacturer chooses something else.
> unless microsoft wanted to subsidize every nokia handset
I wouldn't discard that possibility. Phone makers have to pay to call their Android sets Android and to have the Gmail, Google Maps and other Google properties on their phones. Maybe Microsoft is giving them a boatload of money and saying "spend this money to make WP7 suck less, for we can't to it ourselves" on the condition they sell only WP7 phones.
We don't know what's in the package. This could give Nokia time enough so it can be carved into smaller sellable pieces before the whole thing collapses.
The whole thing would collapse anyway without an aggressive course correction. MeeGo isn't going anywhere and Symbian is doomed. They could have gone Android, but I guess the board thinks the company is doomed no matter what is done and that WP7 is what brings it more time.
> unless microsoft wanted to subsidize every nokia handset
I wouldn't discard that possibility. Phone makers have to pay to call their Android sets Android and to have the Gmail, Google Maps and other Google properties on their phones. Maybe Microsoft is giving them a boatload of money and saying "spend this money to make WP7 suck less, for we can't to it ourselves" on the condition they sell only WP7 phones.
We don't know what's in the package. This could give Nokia time enough so it can be carved into smaller sellable pieces before the whole thing collapses.
The whole thing would collapse anyway without an aggressive course correction. MeeGo isn't going anywhere and Symbian is doomed. They could have gone Android, but I guess the board thinks the company is doomed no matter what is done and that WP7 is what brings it more time.
There's no need for conspiracy theories, but this is something that should not be overlooked either. Elop's decisions influence two very large companies and their shareholders, and one small to medium sized country and its taxpayers. One thing is to make sure that his actions are legal (which they appear to be, unsurprisingly), and other is to understand the context and biases he is operating with.
I've seen a lot of people carrying work relations to their new work places and continue doing(favouring?) business. Only in this case, the person is a CEO, making a really important decision for his new company, and is likely to come under the scanner.
The difference in shares between the top two and all the rest is remarkable. I would have expected to see a bigger spread - clearly everyone else sold-out years ago.
If I were him, I'd sell/sold all my MS stocks (its just 3M), to avoid all the FUD being created around it, and all the energy going in PR and possible scrutiny by the authorities.
This was a news item on Friday in Finland. Nokia says that Elop wasn't allowed to sell all his Microsoft holdings or buy Nokia because of insider trading laws.
The first stage of grief is shock and denial. So I'll forgive all the FUD flying in this kind of discussion. The key is that the Nokia board approved this move. They are most Finnish, and Nokia loyal. This isn't some kind of devious plot coming out of Redmond, you give them way too much credit.
So now Nokia's decision to replace Symbian has nothing to do with a careful analysis of the situation, but everything to do with keeping $3 million dollars worth of Microsoft stock on the up for 1 man?
I have not seen 1 insightful post since this FUD has been spreading. It's amazing how much petty hatred is out there towards Microsoft...
I don't even think this has anything to do with Microsoft itself, but rather with people's psychological need to create conspiracies, to see themselves as the little guy fighting the big guy, and pretend that they have knowledge / can see what other's can't.
Seriously? This is a clear case of conflict of interest. The scary thing is that you might be right about
'So now Nokia's decision to replace Symbian has nothing to do with a careful analysis of the situation, but everything to do with keeping $3 million dollars worth of Microsoft stock on the up for 1 man'
Petty hatred? Microsoft made a lot of real enemies on the way up. Microsoft drove a lot of people out of business. Microsoft funded the massive expansion of H1B visas in the late 1990s by hiring Harris Miller to form the ITAA to bribe Congress, Clinton and Bush. We got outsourcing and Microsoft having a special subsidy that cost developers lots. [ source : Four Indian IT outsourcers topped the 2008 list of companies obtaining H-1B visas - http://www.eweek.com/c/a/IT-Management/Indian-Outsourcing-Fi... ]. Microsoft acted like Walmart for 15 years : destroying their American competition and suppliers. Now that they're looking for buddies. They're scraping the bottom of the barrel for alliances: SCO, Novell and now Nokia. Sleep with Redmond and you die. This may save Nokia from bankruptcy in the short run and enrich some executives, but it spells doom in the long run. The fear is well justified.
And by the way, the ownership table that is linked to isn't even CORRECT. Not even remotely.
Sinofsky isn't listed, and just 2 weeks ago he reported 737,000 shares, which would make him #4 on that list. [1]
Ray Ozzie has just under 1 million shares, and again he's not listed. [2]
The way you assemble these kinds of tables is by mining the SEC filing Form 4, "Statement of Changes in Beneficial Ownership of Securities". But you have to include every Form 4 for your data to be at all accurate.
So already we can see that Elop is #9, and that's just by me guessing two people who seemed conspicuously absent. There could be dozens of others. And don't forget that non-executives don't have to report their shares. I would bet a few grands that there are senior developers who have been working at Microsoft for 15 or 20 years who own more than $3M in stock.
In fact, I just cast my first ever "flag" vote on HN. (With gusto, I might add.) This doesn't deserve the #1 slot.
petty hatred? Microsoft made a lot of enemies bullying their way to the top. Much of the enmity and fear is well placed. Microsoft acted like Walmart for 15 years destroying their competition and their suppliers. Many remember getting run out of business by these guys. It's not petty, it's payback.
Pardon for the comment. I will likely be voted out of existence. Regardless, before that happens and you can see this comment ... is there a contingent gaming the scores? Perhaps paid trollers? How did this get 48 points? A post that's basicly saying "criticism of Microsoft is petty" getting cheered like it's the Gettysburg address? I smell something fishy going on.
Tallqvist told YLE that Elop will divest all of his Microsoft shares as soon as security exchange regulations and Nokia's own internal directives allow. Elop intends to purchase Nokia shares as soon as it is legally possible.
As an executive at MS who announced his role at Nokia while at MS, it was all but impossible to liquidate quickly, given all the disclosure that needs to happen to avoid insider trading issues.
There's no conspiracy or conflict of interest since all of his MS shares will be gone before any actual work product from the alliance has occurred.
I don't see it elsewhere in the comments, but to be very clear, Elop's being listed there does not mean he is the 7th biggest individual shareholder at Microsoft. The headline is 100% inaccurate.
Not all shareholders are publicly reported — there are likely hundreds, even thousands, with larger individual stakes, both those still working Microsoft and not. Moreover, that list doesn't even necessarily report all of the holdings of each individual, many listed in public filings can and do own far larger amounts (by orders of magnitudes).
I'm not sure what reporting requirements dictated Elop be listed there to begin with, but regardless, the article is wrong.
HN desperately needs the ability to retroactively retract such silliness when it happens (which it does from time to time), because people tend to quote and repeat headlines so quickly these days that they create their own truth. (Six months from now, if someone says, "Isn't Elop the 7th biggest individual shareholder of Microsoft", you'd say, "Yeah, I remember hearing that, I think he is.")
Why do people think Microsoft has the ability to "inject" their man as CEO into another company? Nokia's board would have chosen and appointed him with full knowledge of his MS past, probably for the sole purpose of getting the deal done with MS.
68 comments
[ 1.6 ms ] story [ 141 ms ] threadtrough the process known as "election"
Elop's background and shareholdings would be well understood by Nokia's board.
very optimistic statement
Much ado has been made about him having $0 Nokia stock. This just means that he hasn't executed any of his Nokia options yet, and hasn't been awarded any stock as part of his bonus yet. Neither is suprising: He hasn't been with Nokia for a year yet and he certainly has a vesting schedule.
and why would that be?
I guess majority of his current net worth is in MSFT, and future success of NOK is now firmly tied to MSFT as well.
That would mean that his net worth is only around 4-5 million and I doubt that is the case...
What reitzensteinm means is that his stake in Microsoft is probably only a small part of his net worth. I would also guess that he owns significantly more (from a number_of_shares*share_price point of view) of Nokia than of Microsoft. That is why "his financial future is far more tied with the success of Nokia than Microsoft".
I think it's naive to say that he chose to go down the Microsoft route because he is one of its largest individual shareholders. It is equally as likely that Elop would have made his decision regardless of his $MSFT stock ownership. A little too much FUD for me in this case.
[1] http://www.linkedin.com/pub/stephen-elop/1/3a0/b31
http://news.ycombinator.com/item?id=2212657
/edit: Would you like people to talk about you like this just because you switched jobs after 2 years time?
if I switched 3 senior executive jobs in 4 years and then went on to become CEO one of the most known companies in the world today, then yes, absolutely.
The scrutiny in this case comes directly from the fact that Elop's actions at Nokia are very much Microsoft centric, and arguably Microsoft serving.
No he doesn't. WP7, even under the best case circumstances, will have limited impact on Microsoft stock. People with tens of millions of dollars are connected to far better investment opportunities than making a stock bump up in value a few percentage points.
The board brought on Elop to do precisely what he did - any ire should be directed squarely at them.
Say what you will about RIMM, at least they aren't striking at the prospect of QNX replacing their OS.
WP7 hasn't been a runaway success, but at least it's stable, polished and backed by fairly advanced web services. The bet is essentially that Nokia's 1st rate supply chain combined with a polished new OS can sell more than either could have otherwise.
As Nokia said, it is a war of eco-systems now; not devices. Even a low-end Android beats a better spec'ed Nokia because the software is so much better. The quality of apps on Ovi store says it all.
Really? The Ovi Store is pathetic, and even though they have improved a bit recently it comes nowhere close to the other platforms. Casual games are very important, Ovi has less to offer than the nascent Windows Marketplace.
I am among the few who think this is better for Nokia, given the alternative. Nokia is a hardware company. They don't do great software, and they just accepted that fact.
Btw, they might have a gotten a good deal with Microsoft too, given the situation MS itself is in. WP7 is a great OS, and the collaboration with Nokia could see it appearing on cheaper devices. Nokia is famous for making affordable devices that can survive a drop or two. In fact, I know many people who WANT a Nokia with a decent OS.
There are serious competitive considerations for Nokia not choosing Android. I think Elop outlines them pretty intelligently here - http://video.allthingsd.com/video/nokia-ceo-on-choosing-wind...
1) The platform would succeed.
2) They'd be one among a crowd of Android phone manufacturers.
3) It would be hard to differentiate from the others.
Contrast that to Windows Phone 7, where:
1) The platform is playing catch-up, and may fail entirely.
2) They're already one among a crowd of Windows Phone manufacturers, with LG, Samsung and HTC already shipping, and Dell having devices in the pipeline.
3) The party that controls the platform has chosen not to allow differentiation, requiring all the devices to be lookalikes[1].
On all his supposed drawbacks of Android, WP7 looks even worse.
There's some other odd stuff in the video, which begs for explanation. He starts by saying that "Microsoft has placed a large bet on us." But it isn't yet obvious why Microsoft has bet more on Nokia's success than it has on the success of the other WP7 handset manufacturers. And if they have, I can't imagine HTC or Samsung being happy about it.
There's also some stuff at about 2:30 about how each party has licensed technology from the other, with an implication (though not an outright statement) that money might be flowing both ways. If that's true, it raises the possibility that the sale of an HTC WP7 handset results in royalty payments to Nokia, for the mapping technology that Microsoft has licensed. That could cause real friction with the other vendors.
(To clarify: the mapping technology bit was part of the announcement, though it wasn't clear what it was doing there; the payment structures were not announced, but Elop did seem to imply in that video that money would be going both ways, and I'm not sure what other reason there is that Microsoft would have to write checks to Nokia.)
[1] http://mobilementalism.com/2011/02/12/the-photo-the-nokia-fa... has a photo (second in the post) with a bunch of them. They all really do look alike.
Microsoft is already in the habit of paying companies to force their users to use Bing search (see Verizon replacing Google search with Bing on some of their Android phones).
Though for Nokia's sake I hope they're not getting paid per use but per device. Bing's quality outside the US is dreadful, so the vast majority of Nokia's customers are either getting a crappy experience or will somehow need to replace the default search engine.
I wouldn't discard that possibility. Phone makers have to pay to call their Android sets Android and to have the Gmail, Google Maps and other Google properties on their phones. Maybe Microsoft is giving them a boatload of money and saying "spend this money to make WP7 suck less, for we can't to it ourselves" on the condition they sell only WP7 phones.
We don't know what's in the package. This could give Nokia time enough so it can be carved into smaller sellable pieces before the whole thing collapses.
The whole thing would collapse anyway without an aggressive course correction. MeeGo isn't going anywhere and Symbian is doomed. They could have gone Android, but I guess the board thinks the company is doomed no matter what is done and that WP7 is what brings it more time.
I wouldn't discard that possibility. Phone makers have to pay to call their Android sets Android and to have the Gmail, Google Maps and other Google properties on their phones. Maybe Microsoft is giving them a boatload of money and saying "spend this money to make WP7 suck less, for we can't to it ourselves" on the condition they sell only WP7 phones.
We don't know what's in the package. This could give Nokia time enough so it can be carved into smaller sellable pieces before the whole thing collapses.
The whole thing would collapse anyway without an aggressive course correction. MeeGo isn't going anywhere and Symbian is doomed. They could have gone Android, but I guess the board thinks the company is doomed no matter what is done and that WP7 is what brings it more time.
http://www.bloomberg.com/news/2011-02-13/nokia-chief-elop-to...
I have not seen 1 insightful post since this FUD has been spreading. It's amazing how much petty hatred is out there towards Microsoft...
I don't even think this has anything to do with Microsoft itself, but rather with people's psychological need to create conspiracies, to see themselves as the little guy fighting the big guy, and pretend that they have knowledge / can see what other's can't.
Sinofsky isn't listed, and just 2 weeks ago he reported 737,000 shares, which would make him #4 on that list. [1]
Ray Ozzie has just under 1 million shares, and again he's not listed. [2]
The way you assemble these kinds of tables is by mining the SEC filing Form 4, "Statement of Changes in Beneficial Ownership of Securities". But you have to include every Form 4 for your data to be at all accurate.
So already we can see that Elop is #9, and that's just by me guessing two people who seemed conspicuously absent. There could be dozens of others. And don't forget that non-executives don't have to report their shares. I would bet a few grands that there are senior developers who have been working at Microsoft for 15 or 20 years who own more than $3M in stock.
In fact, I just cast my first ever "flag" vote on HN. (With gusto, I might add.) This doesn't deserve the #1 slot.
[1] http://google.brand.edgar-online.com/displayfilinginfo.aspx?...
[2] http://biz.yahoo.com/t/12/7827.html
Should he have excluded going with MS as an option just because he worked there?
See: http://yle.fi/uutiset/news/2011/02/nokia_elop_buying_shares_...
Which includes:
Tallqvist told YLE that Elop will divest all of his Microsoft shares as soon as security exchange regulations and Nokia's own internal directives allow. Elop intends to purchase Nokia shares as soon as it is legally possible.
As an executive at MS who announced his role at Nokia while at MS, it was all but impossible to liquidate quickly, given all the disclosure that needs to happen to avoid insider trading issues.
There's no conspiracy or conflict of interest since all of his MS shares will be gone before any actual work product from the alliance has occurred.
As a general rule, whenever someone uses a phrase as awkward as "actual work product", they're trying to twist the truth.
Stock price relies on more than just reported earnings. The announcement that Nokia has bet the company on Windows Phone 7 affects MSFT's price now.
What would it mean if he switched nokia to windows while holding a lot of google stock?
Not all shareholders are publicly reported — there are likely hundreds, even thousands, with larger individual stakes, both those still working Microsoft and not. Moreover, that list doesn't even necessarily report all of the holdings of each individual, many listed in public filings can and do own far larger amounts (by orders of magnitudes).
I'm not sure what reporting requirements dictated Elop be listed there to begin with, but regardless, the article is wrong.
HN desperately needs the ability to retroactively retract such silliness when it happens (which it does from time to time), because people tend to quote and repeat headlines so quickly these days that they create their own truth. (Six months from now, if someone says, "Isn't Elop the 7th biggest individual shareholder of Microsoft", you'd say, "Yeah, I remember hearing that, I think he is.")
Case in point:
http://www.google.com/search?q=7th+biggest+individual+shareh...
Sigh.