The board of the Swiss-Swedish engineering firm, ABB, has reached a deal with two former CEOs, who have agreed to pay back SFr137 million ($81.5 million) from their pension settlements.This content was published on March 10, 2002 - 21:11
The company made the announcement on Sunday following talks with Percy Barnevik, who retired in 1996, and his successor Göran Lindahl, who left ABB at the end of 2000.
"These settlements, achieved amicably, show that the principles of good corporate governance are being fully implemented in our company," said ABB chairman, Jürgen Dormann.
When he retired, Barnevik received SFr148 million ($88 million) tax-free after more than 22 years with the company. Lindahl was promised SFr85 million in severance and pension benefits, when he was forced out over a pension scandal.
Barnevik has agreed to pay back SFr90 million ($53.5million), whereas Lindahl's pension and benefits will be reduced by SFr47 million.
ABB said they arrived at these amounts through a process of negotiations, actuarial calculations, and benchmarking with other European CEOs' pension packages.
No board approval
As early as last year, the board started questioning how Barnevik's and Lindahl's payouts were approved. They concluded that they had not been fully informed and promptly launched an in-depth internal and external review.
The findings were presented to the board last month and again they said that the two men's payouts were made without their approval.
"It became clear that the board had never been informed about these benefits, and that the delegation by the board to the individual board members had not envisaged to agree or disburse such large sums of money," Dormann said.
He added that the board had acted to "the best of its ability, openly and with complete commitment".
The settlement will come as good news to shareholders, who were left reeling in February after ABB announced losses of more than $600 million for 2001, the first loss since the group was formed by the 1988 merger of Sweden's Asea and Switzerland's Brown Boveri companies.
swissinfo with agencies
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