Call for Fortum Execs to Refund Stock Option Bonuses
Nearly half of the politicians in charge of supervising state-owned energy company Fortum want the executives to voluntarily give up part of their stock options.
According to an Aamu-TV poll, five of the 12 members of the Administrative Council feel that giving some money back would be in the best interests of the company. The rest were undecided.
The Council does not, however, have the authority to require the top management to refund any money.
A public and political outcry was raised over multi-million-euro bonus packages granted to the top management, which is seen as incompatible with the state's financial woes.
For example, Fortum's CEO Mikael Lilius' stock options bring him 12 million euros, which is 100 times the salary of the President. Ministers Point Fingers Mönkäre (Social Democrat) held the trade-and-industry portfolio in Paavo Lipponen's government when decisions on Fortum's stock options were made. Mönkäre refuses to become a scapegoat and says that she had always followed government policy in decision-making. Mönkäre blamed civil servants who are responsible for state ownership policy in companies. She told the newspaper Helsingin Sanomat that she had tried to make modifications to Fortum's stock options scheme but experts had informed her that this would be impossible. The civil servants, for their part, say they believed they had acted with the minister's approval in showing the green light to financial incentives for top bosses in Fortum as well as other state-owned firms. Mönkäre says that with hindsight it is easy to see that a ceiling should have been put on financial incentives. Fortum: Debate Has Become Politicised Fortum's management has declined to comment on the outcry over their lucrative stock options. Fortum's head of communications Carola Teir-Lehtinen refused to reveal whether there had been any debate within the company to modify existing financial incentives in a more moderate direction. Teir-Lehtinen told YLE Radio News that public debate was based on misconception and had become politicised. She said the debate showed that the general public failed to understand the reasoning behind management incentive schemes and bonuses. Conservatives Swipe at Ministers
The Chair of the Parliamentary Constitutional Committee, Kimmo Sasi (National Coalition Part, opposition) has called for an inquiry into the possible accountability of ministers involved with the Fortum stock options.
"We have to look at who made these stupid decisions, stupid agreements. At the time it was ministers Tuomioja and Mönkäre", Sasi told YLE's Morning Show on Channel 1.
Foreign Minister Erkki Tuomioja (Social Democrat) held the trade-and-industry portfolio 1997 to 2000. Mönkäre held the post from 2000 to 2000.
During that time, Sasi served as minister of foreign trade.
Both the Center Party and the main opposition party, the National Coalition Party, have been having a field day with the political fallout the Social Democrats have suffered from the Fortum scandal.
Though coalition patners, there is little love lost between the Centre Party and the Social Democrats.
Both parties say that dismantling Fortum's incentive programmes through retroactive legislative means would prove impossible, since such a law would never receive the sufficient five sixths backing in parliament.
In February 2004, the current minister of trade and industry decided that no new stock option schemes would be approved in companies where the state has a majority holding.
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