Nokia rose 5.3% to $10.28 a share at 6:32 a.m., Eastern time. The shares gained 0.6% to $9.76 on Thursday.
Elop, who is currently head of Microsoft Corp.'s (MSFT) Business Division, will take over effective Sept. 21, the company said in a statement. His previous employers include Juniper Networks, Adobe Systems Inc and Macromedia Inc.
"The Nokia Board believes that Stephen has the right industry experience and leadership skills to realize the full potential of Nokia," Jorma Ollila, chairman of the board of directors said. "His strong software background and proven record in change management will be valuable assets."
Kallasvuo will receive severance pay of about 4.6 million euros ($5.9 million), plus the fair market value of the 100,000 restricted Nokia shares granted to him in 2007.
Not everyone was thrilled with the new appointment. Some analysts expressed concern that Elop's lack of experience dealing with hardware and wireless carriers could hamper the company's expansion in the U.S.
"Everyone's talking about his U.S. experience like it's a big asset. Well not really when you get someone with no connection to the carriers," Carolina Milanesi, research director in the mobile devices and consumer services practice of Gartner, told MarketWatch.