When Nokia's newish CEO Stephen Elop came over from Microsoft a few months ago, he brought with him more than fresh ideas about how Nokia is a burning platform. He also brought 200,000 shares of his old company for a ride—the vast majority of which he still owns.
Why is that significant? Because Nokia and Microsoft were competitors, certainly, but more so because they're currently comrades. But what seems like a glaring conflict of interest may not actually as a big a deal as it first seems.
According to Nokia, while Elop was able to sell of approximately an eighth of his Microsoft stake, to have jettisoned more so quickly would have put him in possible violation of insider trading laws, since the two companies were in active negotiations. And Elop does have an option to acquire up to 500,000 shares in Nokia, although there's no word on when—or if—he might choose to do so. Given how far Nokia's stock has dropped on the news of Elop's Microsoft investment, though, now might not be a bad time for him to buy in.
Update: Nokia sent us this comment in response, which confirms that there were "market rules" that have tied Elop's hands, and at present approximately 60% of his Microsoft shares have been sold.
Stephen Elop had a significant number of shares in Microsoft when he left the company. After leaving Microsoft, stock market rules are such that he was not permitted to sell Microsoft shares for approximately one month after departing. As soon as he was allowed, Stephen started to systematically sell his Microsoft shares. Then, when serious discussions began with Microsoft and other potential partners, stock market rules prevented all participants in the discussion from trading or selling any shares in Microsoft, Nokia or other potential partners, and he had to cease the sales of his Microsoft shares. Additionally, he could not buy Nokia shares. At this moment in time, approximately 60 per cent of his Microsoft shares have been sold, and the remaining minority will be sold when he is once again free to continue with his selling program.
Elop has equity-based incentives from Nokia, and these will be published as per standard practice in Nokia's 20-F report. He also intends to buy Nokia shares going forward, again, once he is permitted to do so under stock market rules. Nokia has stock-ownership guidelines and Stephen Elop will naturally follow those.
The role of the CEO is to act for the benefit of the company and its shareholders, and his work is supervised by the Board of Directors. The Nokia Board of Directors has reviewed the Nokia-Microsoft cooperation plans in detail, and the partnership decision was made by the Board.