Will Nordea staff forgo bonuses?
The Swedish Government tells Nordea to scrap staff bonuses.
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Senior executives at Nordea might have to give up their performance related bonuses because of the economic downturn faced by Nordea, the largest bank in the Nordic region.
"The government line is that companies with state ownership should change the compensation system and completely remove the variable compensation for management," Financial Markets Minister Mats Odell told The Wall Street Journal. "This is also true of Nordea."
The Swedish state is the largest shareholder in Nordea, owning a 19.9 percent stake.The government will present a proposal at the bank’s annual general meeting on March 25th asking Nordea executives to forgo their bonuses for the fiscal year 2009.
Members of Nordea's executive management didn't receive any performance-related salaries for 2009 and the bank said more than 50 managers and material risk-takers will defer payment of half their earned performance-related salary for 2009 over three years.
Nordea wants to retain bonuses for key staff, including senior executives, and the bank is also proposing a new long-term incentive plan for up to 400 managers and key employees although it said the payments should be deferred, shouldn't encourage excessive risk-taking and shouldn't exceed 35 percent of a fixed salary.
Last Updated (Thursday, 18 February 2010 10:06)
