ESPOO, Finland – After thirty years of service to Nokia, Olli-Pekka Kallasvuo will leave his position of CEO and the board of directors, and Stephen Elop, the former head of Microsoft’s Business Division will replace him in that capacity.
Following the news, Nokia’s share rose seven percent and closed on Friday at US$9.94.
Kallasvuo, usually referred to as OPK, will not leave empty-handed, as he is entitled to a severance payment consisting of 18 months gross base salary and target incentive which totals approximately EUR4.6m (US$5.8m). He has also been granted 100 000 restricted shares.
During Kallasvuo’s four years as the company’s CEO, Nokia’s stock fell 50% to US$37bn. The telecommunications giant is the biggest company in Finland, but in the United States it has performed poorly. The new chief executive officer emphasised that North America was an important market to the company, a region from where Nokia’s smartphones are losing to Android devices, the iPhone and to BlackBerry – considering the entire mobile phone segment, Nokia has under 10% of it in the US.
Under the former CEO, some new services ended up being scraped: Ovi Files, a file-storage website for mobile phones and computers; and the NGage gaming platform, which was revived after being killed as an actual phone line.
Elop has experience working in the United States at Juniper Networks, Macromedia, Adobe Systems and Microsoft, although the job will not be easy for him, even though Nokia will soon release smartphones based on two modern operating systems: MeeGo, a product of its collaboration with Intel, and Symbian, not new, but rather a refresh.