ABB chiefs ready to return some cash

Former ABB chief executives Göran Lindahl (left) and Percy Barnevik (right) Keystone

Two former bosses of the electrical engineering group ABB are reportedly willing to return some money from their multi-million dollar retirement packages.

This content was published on February 21, 2002 - 15:33

A source at the Swiss-Swedish group told the British news agency Reuters that both Percy Barnevik and Goran Lindhal were ready pay back some of their money in a bid to defuse a public scandal.

"Both gentleman have called to express their willingness to find a compromise," the source explained.

The supervisory board of ABB revealed last week that the company had paid out severance packages worth SFr233 million ($137.2 million) to the two men.

Barnevik received SFr148 million in pension benefits after his resignation as chief executive in 1996. Lindahl got benefits worth some SFr85 million.

Payout bombshell

The scale of the payouts - revealed on the same day that ABB announced losses of more than $600 million in 2001 - caused a public outcry in both Switzerland and Sweden.

Barnevik, one of the main architects of the creation of ABB through the 1988 merger of Sweden's Asea and Switzerland's Brown Boveri, saw his reputation as a business guru and respected European manager melt away amid a torrent of recriminations.

Barnevik unexpectedly resigned as chairman of ABB in December, to be succeeded by Aventis chairman, Jürgen Dormann, after the board heard details about the compensation paid to Lindahl, who was dismissed a year earlier.

The ABB source said the board met on February 11 to finalise the 2001 results and to get a report from an internal commission on payments made to Lindahl and Barnevik.

Internal investigation

"The board was stunned. It was decided the matter needed to be made public in the interest of ABB's new focus on transparency," the source added.

"An internal investigation is now under way to establish what exactly went on and what amounts of money the company can ask back. This is likely to take several weeks.

"In the end, if we can find common ground, there will probably be a short statement saying an agreement has been reached," the source said.

ABB spokesman Thomas Schmidt confirmed an internal investigation was underway and noted that chief executive Jörgen Centerman had said last week that he wanted an "amicable solution".

Tax concerns

Jürg Altdorfer, responsible for corporate taxes at the tax office in canton Zurich - to which ABB reports - said the authorities were awaiting the outcome of the ABB study.

"That is a very serious study. Not just with internal people but also with leading outside experts," he said.

"For me, as an economist, the main issue is corporate governance - have the rules been followed or not? But as a tax official I can only look at the question of whether sums that have been paid needed to be taxed or not," Altdorfer said.

swissinfo with agencies

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