The share has fallen like a stone on the stock market – and the savings package can make thousands of people unemployed.
But when Hans Vestberg is leaving his position as CEO of Ericsson, he can laugh all the way to the bank.
Vestberg contract allows him to pick out almost 30 million in compensation.
the Swedish telecom giant Ericsson burdened by high costs and declining demand. In the last quarter ended the company’s profit well below analysts’ expectations.
In order to reverse the trend, the company has doubled its savings package, and thousands of workers risk being given notice. Meanwhile, shares have fallen heavily in the stock market. This year, a fifth of the market capitalization wiped out.
“The right time for new leaders”
Against this background surprised it probably hardly the assessors that the board finally lost patience with CEO Hans Vestberg. On Monday morning the news came that he kicked.
– In the current environment, and with the increased pace of implementation of its strategy the Board has decided that the time is right for a new leader to drive the next phase of Ericsson’s development, says the chairman Leif Johansson in a statement. READ ALSO “25,000 can leave Ericsson”
Generous severance
Vestberg can however take comfort in the fact that his financial situation is secure for a long, long time. In addition to a notice period of six months, he is entitled to compensation for a further 18 months.
– Vestberg has the same contract as the rest of the management team. That is to say six months notice, then severance pay corresponding to 18 months. From there, we will deduct 50 percent of all new income that he could have said the chairman Leif Johansson during a press conference on the change of CEO.
Sheep million
Hans Vestberg was one of the highest paid exchange-CEOs in Sweden. In 2015, he had a base salary of 14.2 million, and a variable bonus of 16.2 million. This, according to Ericsson’s Annual Report.
Based on the fixed compensation amounts Vestberg monthly salary of about 1.2 million. This means that the agreement with notice and severance pay is worth a total of SEK 28.8 million.
However, compensation may be higher than that. During the notice period can Vestberg namely get bonuses.
– The moving parts depends on how the company developed during the year. 2015 was the very high levels. How it will be this year can not say in advance, says Ola Rembe, Communications at Ericsson.
“galling”
Per Norlander, head negotiator for the union Swedish engineers at Ericsson, is critical to compensation.
– It is easy to be blinded by such sums, and I would like to work for a company that can afford to provide a first class CEO compensation. But then that there is uppsidor in the form of technical development at the forefront and lots of products sold;
– Against the background that has been so sticks it in his eyes.
Norlander hope Vestberg replacement becomes more of a ingenjörstyp.
– Previously, Ericsson has been a very heavy engineering companies. Hans Vestberg has pushed hard against savings, and lost focus on making world-class products.
– I hope that the new CEO will be a person who can both the financial side and the engineering part. READ ALSO Flying a private jet – the 300 million
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