Antti Piippo of Elcoteq highest-paid corporate board chairman
By Tuomo Pietiläinen
The size and fiscal health of a listed company is not directly proportional to how much the company's top figures are paid. According to a study by Helsingin Sanomat, the highest fees for a chairman of the board are paid by the electronics subcontractor Elcoteq.
Antti Piippo gets EUR 600,000 a year for serving as Elcoteq's Chairman of the Board. Piippo gets nearly twice as much as Jorma Ollila, even though Nokia's market value is more than 400 times bigger than Elcoteq.
In third place is Nordea Bank, whose Swedish Chairman of the Board Hans Dalborg gets EUR 240 a year. Also doing well are the chairs of the paper manufacturers UPM (EUR 175,000) and Stora Enso (135,000).
Surprisingly, the big payers include the real estate investment company Citycon, which pays its Dutch chairman EUR 175,000 a year, even though its market value is just a tenth of that of the forest companies.
There are no official guidelines for what corporate chairs should earn. The decisions are made at shareholders' meetings. The table shows the fees that have been set at shareholders' meetings held this spring.
The average payment for chairing the board of a large listed corporation was EUR 100,000 a year. If Elcoteq were excluded, the average payment would be EUR 91,000.
Tom Palmberg, the chairman of the Finnish Association of Professional Board Members, says that Finland has finally reached the average Nordic level in fees paid to board members. He says that this has been necessary in order to find competent people to fill the posts.
"The responsibility of the chair has been recognised. For this reason, it has been necessary to raise the fees especially when knowledgeable foreigners have been needed", Palmberg says.
Already three of the top six companies have a foreign chair.
If Finnish companies want people from outside the Nordic region to chair their boards, the fees will have to be raised even more. According to Palmberg, the pay level in the rest of Europe and in the United States is many times higher than in Finland.
One in four chairs saw their fees increased at the spring general meetings. The greatest increase, 67 per cent, was for Antti Lagerroos, Chairman of the Board of Wärtsilä, whose annual fee rose from EUR 60,000 to EUR 100,000.
Also getting a big boost was Anssi Vanajoki of Amer Sports (60 per cent) and Sponda's Lauri Ratia (42 per cent). The average rise in fees for all corporate chairs was only four per cent.
Earnings of wage earners are expected to increase this year by an average 2.7 per cent.
Jarmo Leppiniemi, chairman of the Finnish Shareholders Association, has publicly criticised the fees paid to board members, which he feels "could go out of control". He says that it would be important to examine how much time chairs of boards are able to devote to the company.
"It is clear that those who work full time for a salary lack the resources that they would need to immerse themselves in the work of a corporate chair", Leppiniemi says.
He feels that a demanding job in a listed company, combined with a high position on the board of another listed company are not compatible.
Demanding day jobs are held at least by Anssi Vanajoki, who serves as Vice President of Nokia, Jukka Viinanen, CEO of the pharmaceutical company Orion, and Mikael Lilius, CEO of the energy company Fortum. All three have also taken on the chairmanships of large listed companies.
Similar time constraints are undoubtedly being experienced by Finnlines CEO Antti Lagerroos, and Stora Enso CEO Jukka Härmälä.
However, both have left, or are leaving their posts as CEO, so they will have more time to devote to the boards of the companies which they chair.
In a class unto himself is Matti Kavetvuo, a professional board member, who chairs both Metso and Orion. He is also a member of the boards of Marimekko, Konecranes, and Alma Media.
Helsingin Sanomat / First published in print 14.4.2007
TUOMO PIETILÄINEN / Helsingin Sanomat
tuomo.pietilainen@hs.fi
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| 17.4.2007 - THIS WEEK |
 Antti Piippo of Elcoteq highest-paid corporate board chairman |
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