Nokia's former chief executive reportedly turned down a request from the Finnish company's chairman to waive part of his controversial £16m golden goodbye, on the grounds that he is going through a divorce.
Stephen Elop's payoff, awarded after he helped sell Nokia to Microsoft earlier this month, has caused a political firestorm in Finland, with the prime minister, Jyrki Katainen, describing it as "quite outrageous".
Nokia's chairman, Risto Siilasmaa, has admitted he misled shareholders about the fact that Elop had received a more lucrative payoff than predecessors. Elop will receive 18 months' salary and a "management short-term cash incentive" worth a combined €4.2m (£3.5m).
To this will be added €14.6m in share awards, giving an overall package worth €18.8m. During his three years at the helm, Nokia's market capitalisation has more than halved. The company's smartphone arm, which once dominated mobile phone manufacturing, was sold to Microsoft for £4.5bn.
Siilasmaa is reported by Finnish paper Helsingin Sanomat to have asked Elop several days ago to return some of the money. Sources told the paper that Elop argued he could not do so because under Finnish law his wife would be entitled to half of the £16m compensation. If he accepted less, there is supposedly no guarantee that she would in turn agree to a lower settlement.
The legal position is unclear because Elop's wife lives in the United States, leaving open the question as to whether divorce proceedings could take place in the US or in Finland. A spokesman for Nokia refused to comment.
Elop will return to the US to take up a senior position running Microsoft's expanding devices business, which will include Nokia. He is a leading candidate to succeed the software behemoth's long-serving chief executive, Steve Ballmer.
Microsoft will pay 70% of Elop's leaving package, but its contribution was not enough to prevent a backlash. Finland's economy minister, Jan Vapaavuori, has reportedly said: "I find it difficult to understand the merits of this bonus."
Elop's contract was amended days before the Microsoft deal was finalised, Siilasmaa told Helsingin Sanomat. This was because the chief executive would have the right to claim compensation for breach of contract if his role changed substantially as a result of the takeover.
"In both cases, he would have received the same compensation, but if the agreement had not been changed, Nokia's shareholders would have paid full compensation. Moreover, the mobile phone unit would have lost its leader for a transitional period," Siilasmaa said.
Microsoft's decision to help fund Elop's payoff is unusual, its chairman claimed. "I am even a little proud," he added. "The matter was decided after the actual purchase price was agreed upon."
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