“Scrap CEO’s pension” – government

The Swedish government has ordered state-owned mining company SKAB to renegotiate its chief executive's 80 million kronor pay and pensions package. The move comes after Social Democrat party secretary Marita Ulvskog called the sum promised to Martin Ivert "completely inappropriate."

Sven-Erik Söder, state secretary to industry minister Thomas Östros, who is responsible for state-owned companies, confirmed that he saw Ivert’s package as unacceptable.

Söder said that the fact that the chief executive’s pension deal guaranteed him at least 50 percent of his salary for the rest of his life meant that it must be renegotiated.

“LKAB’s board absolutely ought to renegotiate the conditions,” said Söder.

“I have been in touch with LKAB’s chairman Björn Sprängare and we are agreed on that. The chairman and the board have got the owner’s full support in bringing about a renegotiation,” he added.

Marita Ulvskog, a left-winger who has recently been in the news for attacking private-sector companies, had attacked Sprängare, noting that “he comes from the private sector and “is perhaps used to a different way of doing things.”

Ivert’s pension agreement was signed in 2001, and gives him the possibility to retire at the age of 60, after which he would be entitled to 65 percent of his salary for five years. After 65, the deal would give Ivert at least 50 percent of his salary for life.

LKAB has secured its pension funds with capital or and pension insurance, dividends from which would be paid to Ivert in the form of a higher pension.

The pension agreement is incompatible with the guidelines for employment conditions in state-owned companies, which the government introduced in 2003 – two years after Ivert’s pension was set. According to a calculation from Swedish Radio’s Ekot programme, the deal will cost LKAB nearly 80 million kronor over a six year period.