Ex-chiefs' £95m payouts in spotlight
TWO of the most senior men in British boardrooms have came under an unwelcome spotlight after their former employer said it had paid them too much and was seeking to recover some of the money.
Electrical engineering giant ABB is asking Percy Barnevik, chairman of AstraZeneca, and Goran Lindahl, chairman-elect of Anglo American, to pay back some of the Swfr230m (£95m) they have received in pensions and other benefits.
ABB cast doubts on the way the payments had been approved: 'The board of directors has now determined that approval procedures for these benefits were unsatisfactory and the company will seek restitution of amounts paid in excess of its obligations.'
The company, which also posted worse-than-expected losses of $691m (£482m) for 2001, said it was acting after a detailed internal review and after seeking external expert opinion.
Barnevik, once one of the most admired businessmen in Europe, was paid Swfr148m in pension benefits since he stood down as chief executive in 1996. He quit as chairman last November.
Lindahl has received pension and other benefits of Swfr85m. He succeeded Barnevik as chief executive and also resigned suddenly last year.
The attempt to wrest back money paid to a former executive is highly unusual, if not unprecedented.
ABB's loss was its first in 13 years and followed a $1.4bn profit last time. It came after a doubling of provisions to $940m for asbestos claims stemming from its Combustion Engineering operation. The dividend was axed.
The company, the product of the 1988 merger of Sweden's Asea with Switzerland's Brown Boveri, also unveiled a raft of other charges, including $295m in provisions after recalculating reinsurance business and £138m in insurance underwriting losses, including a $48m charge for 11 September.
On top of this came $288m of write-downs on intangible assets and another $231m in restructuring charges. Chief executive Joergen Centerman said: 'After a detailed review of our operations, we took broad measures across our business to turn the page and put ABB on a better footing.'
ABB employs 8,000 people in the UK. Its activities range from automated paint systems in the car industry to providing the power equipment for the West Coast Main Line upgrade.
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