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February 25, 2013 4:32 pm
Vestas, the Danish wind turbines group under attack from shareholders, has proposed retroactively more than doubling the pay of its chairman and deputy chairman last year due to their roles in its extensive restructuring.
The second-largest maker of turbines in the world justified the proposal to give chairman Bert Nordberg €270,818 instead of €130,818 and deputy chair Lars Josefsson €177,212 instead of €87,212 because of their “unexpected and extensive workload” throughout the year. Both were elected to the board for the first time in 2012 when shareholders agreed their pay.
Deminor, a Brussels-based shareholder rights group leading a proxy fight against Vestas, criticised the move having already denounced the group’s corporate governance and Mr Nordberg.
“It looks like the chairman was not aware, or was informed incorrectly, of the scope of the job he took up last year. And the same goes for his financial package . . . This raises – again – some questions on corporate governance and internal organisation,” said Edouard Fremault, manager at Deminor.
Deminor is seeking to add to the 104 investors already backing its motion to appoint an independent auditor to look into whether Vestas used an accounting change in 2010 to boost its revenues and thus avoid a profit warning.
It has criticised the workload of Mr Nordberg, the former head of Sony Ericsson who has added directorships at Electrolux and BlackBerry to his chairmanship of Vestas and board role at SCA, a Swedish forestry group.
Mr Fremault underlined how investors were being asked to pay the chairman and deputy chairman the same compensation as was originally agreed last year: three and two times that of a normal director, or €130,818 and €87,212 respectively.
“What’s the point to vote something if 12 months later the company proposes not to stick with it? The company should at least demonstrate and elaborate why such an increase is justified,” said Mr Fremault, beyond its brief explanation on Monday in its invitation to next month’s annual shareholder meeting.
Vestas has undergone a turbulent three years after a series of profit warnings led to most of its management team leaving and a collapse in its share price. It is in the middle of a massive restructuring to cut almost a third of jobs while it is still in negotiations with Mitsubishi Heavy Industries about a potential co-operation.
Vestas said: “It is up to the AGM to take a decision regarding this. Because of the turnround plan and going through the transformation it is natural that the chairmanship is becoming more involved in running the company.
“It is important for the company to have the best international leaders and we are competing on an international level so we have to benchmark that compensation.”
Eyebrows were also raised by the proposed appointment to the board from March of Henry Stenson, a former close colleague of Mr Nordberg’s from Ericsson where Mr Stenson was the head of communications. Mr Stenson, now a partner at PR group Brunswick, was previously at SAS, the struggling airline that underwent several restructurings, and was proposed for Vestas because Mr Nordberg felt the board needed somebody with communications and capital market experience.
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