Considering the early tally from Nokia (NYSE:NOK) shareholders, who were voting on the deal to sell its devices and services unit to Microsoft (NASDAQ:MSFT) for $7.34 billion (based on today's conversion rates), the final results were a given. As expected, "more than 99% of the votes cast" were in favor. The only question was -- what were the opponents even thinking?
But Nokia shareholders weren't done. In addition to overwhelmingly agreeing to the Microsoft transaction, shareholders made it clear that they've washed their hands of former Nokia CEO Stephen Elop, too. Which begs another question: With Microsoft looking for a new CEO to replace outgoing Steve Ballmer, should it heed the words of Nokia's shareholders and remove Elop from its short list?
The root of shareholder angst
Elop received some less-than-kind feedback during Nokia's 4.5 hour shareholder gathering. But before we look at that, it's important to appreciate the role that the company plays in Finland. Nokia has been an institution in Finland since its roots as a paper producer beginning in 1865. From there, Nokia added rubber production to its business in the late 1800s, and transitioned to electronics in the 1960s.
The Finnish population has come to view the 150-year old Nokia much like we in the U.S. look at Coca-Cola and Ford: They're not just companies to us, they're Mom, baseball, and apple pie. For example, when the deal with Microsoft was announced, Finnish Minister for European Affairs and Foreign Trade Alexander Stubb tweeted, "For a lot of us Finns, including myself, Nokia phones are part of what we grew up with. Many first reactions to the deal will be emotional."
Based on yesterday's meeting, Stubb got it right: emotional. At one point during the proceedings, Nokia's chairman had to ask shareholders to stop verbally abusing Elop, who sat on stage, but apparently didn't have anything to add. Shareholders called Elop a "triple a flop," blamed him for ruining Nokia, and referred to the shareholder meeting as "the funeral of Nokia phones." Ouch.
Do Nokia shareholders have Elop pegged?
Emotions aside, it's easy to see why Nokia fans aren't enamored with Elop. When he took over Nokia in 2010, it employed about 20,000 people, easily making it Finland's top employer, and a huge part of the national economy. Following the deal with Microsoft, Nokia will employ about 6,000 Finns. The decline of Nokia's mobile phone market share, and the precipitous stock price decline that followed, sealed Elop's fate in Finland.
Ditching Symbian, Nokia's proprietary OS, in favor of Microsoft's Windows Phone also struck a bad chord with Finns, and is largely blamed for the demise in its mobile phone market share. Of course, as we're starting to see, Elop's gamble is beginning to pay off as Windows Phone picks up steam, especially overseas. But that's little consolation to disillusioned Nokia shareholders, and Elop's the target of their discontent.
Microsoft's CEO solution
While there are a few names being bandied about as Microsoft's new CEO, the focus of most rumors are on Elop and Ford's Alan Mulally. Since Mulally joined Ford as CEO in 2006, he's worked miracles for a company that was knocking on death's door. In the last five years, Ford shareholders have enjoyed a robust 837% return on their investment. Nokia is down 38% during that same time, and is just now nearing breakeven since Elop joined in 2010.
The concern with Mulally is his lack of mobile experience, and that's legitimate, but there's an answer for that -- Elop. His background with Microsoft, and knowledge of mobile, has put Elop atop many a list as its new CEO. However, his track record, as Nokia shareholders will tell you, leaves much to be desired.
The solution? Let Elop do what he knows best, and run Microsoft's devices unit, as originally planned. Then, move mountains, if need be, to get Mulally installed as its CEO. Problem solved.