If it so chooses, the Board of Directors of the energy concern Fortum has considerable powers to intervene in the now-controversial options programmes for key executives, and could adjust them. The mandate for this is written into the conditions for the stock option package dating from 2002.
The conditions state that the Board can reconsider the terms of the options pacakge if there has been a corporate acquisition, restructuring of the company, or some other significant change in the operating environment. In the course of this past year, Fortum spun off its oil operations and established Neste Oil as a separate listed company, thereby changing the nature of the business quite considerably.
The options and stock incentives given to key Fortum management figures follow more or less the lines drawn up by the government, but they have been fine-tuned to make them as attractive as possible to those who will receive them.
The issue of large stock option benefits to Fortum's CEO Mikael Lilius and other top managers within the corporation has prompted much debate in the media and even within the government ranks and in Parliament in recent weeks, particularly in the wake of news that the sums involved were very large indeed - apparently as much as EUR 500 million - following a sharp increase in the price of the company's stock at a time of high oil prices. The stock also took off sharply in response to news in 2004 of the spin-off of oil operations.
The articles below provide some background to the case.
