The chairman of ABB, Jürgen Dormann, says the group's admission that it paid huge sums to former CEOs is part of its culture of openness.This content was published on February 26, 2002 - 12:25
Dormann was answering speculation that the decision to go public about the payouts was motivated by a personal vendetta by the company's largest shareholder, Martin Ebner.
Ebner, a board member who has a ten per cent stake in the electrical engineering giant, is said to be incensed by ABB's poor share performance in recent years.
Insiders say Ebner may have insisted that the company reveal it had paid out SFr233 million in retirement benefits to two former chief executives.
The announcement was made on the same day that ABB posted losses of $690 million for 2001 - the first loss since the group was formed from the merger of Sweden's Asea and Switzerland's Brown Boveri in 1988.
Dormann said the decision to reveal the payouts had nothing to do with personal vendettas. He said the scale of the payoffs would eventually have leaked out, and would have damaged ABB's pledge of openness and accountability.
"We wanted to put a line between the past and the future...there was no other way. It would have become public anyhow. It is much better that we did it," Dormann said.
Dormann, who has been chairman of the electrical engineering group since the end of last year, said he wanted to increase the number of outside directors and to have more active board members, as part of the move towards greater openness.
"We are trying to restore our credibility in the marketplace. There is a big effort to improve transparency and corporate governance," he said.
Earlier this month, ABB revealed it had paid SFr148 million ($87.16 million) in retirement benefits to former CEO Percy Barnevik of Sweden when he stepped down in 1996, and SFr85 million to his successor, Göran Lindahl.
The company has asked for part of the money to be paid back.
swissinfo with agencies
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