Nokia's Board raises number of stock options to be issued this year

Nokia's Board raises number of stock options to be issued this year
While Nokia's stock has rebounded from a low of $1.63 to hit current levels of $2.11, overall the stock has been a disaster. As a result, previously issued and un-exercised stock options are underwater requiring Nokia's Board to make some adjustments. A stock option is a financial instrument that gives the holder the right to buy or sell a stock at a set price for a certain period of time. In the case of company-issued stock options, they are usually given to key employees that a company wants to retain, and offer the ability to buy shares at a discount for a period of time. When the underlying stock is falling, the potential reward drops until in some cases, the price of the stock is well under the price at which the option can be exercised making the options worthless. While the options can be changed to lower the exercise price, that has been a controversial move over the years. Another tactic is to increase the number of options issued, increasing the potential for a windfall if the stock rebounds.

Nokia's stock has been in freefall

Nokia's stock has been in freefall

Nokia's Board has just increased the number of stock options that will be issued under the Nokia Equity Program 2012 from 8.5 million to 12 million. Nokia's Board can raise the number of options outstanding to a maximum of 35 million based on previously approved documents. Where Nokia is making a prudent decision is with its statement that none of the additional options will be awarded to CEO Stephen Elop or other members of Nokia's Leadership Team. Instead, these potentially valuable options will be awarded to key senior level employees who have been given the responsibility of implementing Nokia's strategy to turn the company around. In effect, this aligns the success of these employees with the success of the company which would then be reflected in the company's stock, making the options more valuable.

Under the Stock Options Plan 2011, options can be issued through 2013 with 50% of the options vesting three years after they are granted with the remaining 50% vesting the following year.

source: Nokia

FEATURED VIDEO

5 Comments

1. Wiki_jaan

Posts: 704; Member since: Jun 24, 2012

Nok u r dead since u leave meego and even dont take care about android

2. marchels14 unregistered

Nokia is dying, if they don't deliver high end windows 8 phone with purview technology, end is near.they are killing off Symbian and they don't have an other OS. if the do it right maybe they can survive.

3. cepcamba

Posts: 717; Member since: Feb 27, 2012

Windows phone will inevitably gain market share in the coming years. 20% is not impossible in 2-3 years time, and if Nokia can get half of that 20% they'd be safe enough.

4. kunyuk

Posts: 56; Member since: Jun 29, 2012

Wp8 will be a 'bom' for ios, android and to Nokia. ;-)

5. SemperFiV12

Posts: 949; Member since: Nov 09, 2010

Nokia cannot fail. Standalone or apart of Microsoft, the craftsmanship and quality of their devices will carry on! Like Windows or not, you cannot argue with Nokia's build quality.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.