Executive salaries rise 16 per cent
CEOs of large listed companies got more in salaries and bonuses than in the past seven years
By Tuomo Pietiläinen
The CEOs of the largest companies listed on the Helsinki Stock Exchange earned a record salaries and monetary bonuses last year. A study by Helsingin Sanomat also indicates that the annual increase in executive surged to 16 per cent, at a time when pay and bonuses of Finnish wage earners rose by an average 2.6 per cent.
The earnings of bosses of big listed companies rose at a rate that was six times that of ordinary employees. If the impact of Nokia is left out of the calculations, the difference is fivefold.
The figures include monetary bonuses, but not the incentives that are set according to the companies’ share prices.
If stock options and share rewards are included, the difference with ordinary employees grows even more, as they only rarely are entitled to rewards in shares and stock options.
The CEO of a large listed company earned an average EUR 918,000 last year, which is about EUR 125,860 more than in 2010. In the previous record year, 2007, the CEOs earned an average EUR 884 in salaries and monetary bonuses.
An ordinary employee with a full-time job earned an average EUR 38,888, bonuses included. Without bonuses, earnings were an average EUR 650 less.
The pay of one executive would be enough to hire more than 20 ordinary employees earning the average salary. In 2010 the difference was 21-fold.
In its investigation, Helsingin Sanomat has followed the pay development of the pay of CEOs of 43 large listed companies from 2005.
Although many kinds of economic crises have occurred in these years, the combined salaries and bonuses of top executives have risen by 25 per cent in seven years.
The figures indicate that cyclical fluctuations are only slightly reflected in the basic salaries of top executives. So it seems that they do not even compromise on their basic salaries.
Five names dominate last year’s figures. Two of them are Finnish citizens, one is Canadian, one Swedish and one Danish. Two CEO’s of forest industry companies, Jussi Pesonen of UPM and Jouko Karvinen of Stora Enso remained on the list of rising basic salary, but they also took home unusually large bonuses.
Jussi Pesonen got a bonus of EUR 1.1 million. Karvinen’s bonus was about half of that.
Nokia’s fairly new CEO Stephen Elop seems to have signed a lucrative contract with Nokia, as he immediately shot to the top-earning top executive in Finland with a gap of a million euros to UPM’s Jussi Pesonen.
Nordea Bank CEO, Christian Clausen, a Dane, topped the list in the size of additional pension payments. Last year Nordea had to pay EUR 1.5 million in additional pension payments, which is nearly a million more than in the previous year.
The million-euro increase stems from the rise in the pension ceiling in Sweden, which is where Nordea is domiciled. Nordea raised Clausen’s basic salary by 35 per cent last year to EUR 1.1 because Nordea felt that he needs to get “to where the markets are”.
Helsingin Sanomat / First published in print 4.6.2012
Previously in HS International Edition:
Finance Minister Urpilainen wants to bring corporate executives’ pay under control (10.1.2012)
Top executives’ salaries rise again (19.5.2011)
Nokia pays Stephen Elop hefty welcome package (14.3.2011)
Veikkaus CEO Risto Nieminen to collect generous severance deal on early departure (24.4.2012)
TUOMO PIETILÄINEN / Helsingin Sanomat