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State-owned companies’ board members’ hefty rewards

Board members of exchange-listed companies where the state has stakes are paid an average of 47,000 euros per year, while board members in wholly state-owned companies are awarded an average of 15,000 euros per annum.

Valtioneuvoston kanslian omistajaohjausosaston osastopäällikkö Eero Heliövaara.
Eero Heliövaara, chief of the Government Ownership Steering Department. Image: Yle

There’s great variability in the pay of board members in wholly and partly owned state companies. Some board chairs get paid up to 75,000 euros a year – and that’s not including several thousand euros’ compensations for meetings. So finds a study by the Finnish Pension Alliance TELA.

Among the highest paid chairs in 2013 were Sari Baldauf from Fortum, Claus Heinemann from Finnair, and Neste Oil’s Jorma Eloranta.

Other state-owned companies or companies where the state has a majority stake are postal company Itella, alcohol retailer Alko and Finavia, which maintains the network of airports.

In state-owned companies, even board members not in leadership positions can be paid some 40,000 euros, plus meeting compensations.

According to the TELA report, in 2012 board chairs took in an average of 30,000 euros, while those just sitting on the board earned on average over 15,000 per year.

No raises this year

According to Eero Heliövaara, chief of the Government Ownership Steering Department, payments to state-owned companies’ board members were not raised last year, nor will they be raised this year.

“In this economic situation it was thought that last year’s level is enough, even though there were pressures to make raises in exchange-listed companies. You can’t really attract foreign experts to boards in Finland with these levels of remunerations,” Heliövaara notes.

In listed companies partly owned by the state, for example through its investment company Solidium, fees can be sizeable. A board chair may be paid up to 170,000 euros per year, and a normal board member 80,000 euros. On average chairs in such companies are paid 102,000 and board members 47,000 euros per year.

Among this group, Björn Wahlroos, board chair with investment and insurance company Sampo, is the highest paid.

Big bucks

Board members of big exchange-listed companies such as Nokia, Nordea and Kone get paid the most. A chair may be awarded hundreds of thousands of euros per year. In 2012, the average pay was 108,000 euros. In such companies, even a normal board member is paid an average of 50,000 euros.

“Working on the board takes a lot of time and familiarization. There are around ten meetings in a year, and each time one has to read and internalize 250-300 pages of facts. On top of this, there are committees,” Heliövaara explains.

TELA’s study shows pension companies paying the smallest board remunerations. In 2012, a board chair’s average pay was a bit over 26,000 euros, while the corresponding figure for a normal board member was a little more than 10,000 euros.

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