Fortum options spark row between Centre Party and Social Democrats

Centre blames SDP ministers for excessive monetary incentives

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The lucrative stock option perks extended to managers of the state-owned energy company Fortum became a hot topic of discussion in Parliament on Tuesday, with the main government parties - the Social Democrats and the Centre Party - taking swipes at each other.
      The Centre Party blamed two Social Democratic ministers of trade and industry, Sinikka Mönkäre and Erkki Tuomioja, who served under two governments led by former Prime Minister Paavo Lipponen (SDP), for approving what have been seen as excessive monetary incentives for top figures in Fortum, and in the present Neste Oil.
      Parliament’s Commerce Committee decided unanimously to investigate how the stock option schemes for Fortum executives came about, and to ponder whether or not they could be modified.
      The committee’s chairman, Jouko Skinnari (SDP), would have liked to limit his questioning on the stock option question to the present Minister of Trade and Industry, Mauri Pekkarinen (Centre), but committee members representing the Centre Party insisted on calling Mönkäre and Tuomioja as well.
      The Centre Party’s proposal had the support of representatives of the opposition National Coalition Party, even though that party was in the government along with the Social Democrats at the time in question.
      Mönkäre, who refused to take on the role of a villain in the matter, blamed civil servants at the Ministry of Trade and Industry, particularly Markku Tapio, who is responsible for corporate ownership policy.
     
Mönkäre recalled that when preparations were made for the Fortum stock option plan, she had tried to make modifications, but experts assured her that any changes would have been impossible.
      Tapio, meanwhile, says that he believed that he had "the minister’s mandate" at the Fortum shareholders’ meeting.
      Timo Kalli, chairman of the Parliamentary group of the Centre Party, said that he believes that the only possible way to dismantle the excessive stock options would be through a constitutional amendment, a move which he felt would go against principles of Western democracy.
      Trade and Industry Minister Mauri Pekkarinen noted that in February 2004 he pushed through a decision in the Government’s Committee on Economic Policy that no new stock option deals would be made for executives of state-owned companies. However, the decision did not have any effect on existing arrangements at Fortum.
     
As was reported earlier this week, the stock options programme at Fortum is believed to be worth in the region of EUR 500 million to the beneficiaries.


Previously in HS International Edition:
  State-owned Fortum's stock option incentives worth half a billion euros (23.9.2005)
  Generous Fortum stock options cause indignation in Sweden (2.2.2005)

Links:
  Fortum web site

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