Olofsson: let state companies decide CEO bonuses

Sweden's industry minister Maud Olofsson has said she wants to allow state-owned companies to pay bonuses to chief executives, arguing that pay packages for CEOs should be a question for boards of directors rather than for the government.

Bonuses for chiefs of state-owned companies were banned two years ago by the Social Democratic government. The move followed criticism that certain CEOs were being paid too much.

But Olofsson, who is also leader of the Centre Party, said in an interview published in Dagens Nyheter on Friday that the ban needed to be scrapped:

“We have to realise that these companies are on a market, and we have to recruit good CEOs,” she said.

Olofsson also told DN that she does not want to impose gender quotas on listed companies, a proposal that was put forward by the Social Democrats. She did say, however, that she would like to see equality on the boards of state companies.

The government, in which Olofsson is also deputy prime minister, has said it plans to sell some of Sweden’s 60 state-owned companies. The minister would on Friday not reveal which companies were for sale, but said that electricity generator Vattenfall and mining company LKAB would not be sold.


Olofsson happy with Geely Volvo assurances

Sweden's enterprise minister Maud Olofsson has discussed the Volvo-Geely deal with senior Chinese management and received confirmation that the firm plans to retain its Swedish connection and maintain production in the country.

Olofsson happy with Geely Volvo assurances

Olofsson is in China with a high level Swedish delegation including senior business leaders and King Carl XVI Gustaf, and met the influential National Development and Reform Commission (NDRC) in Beijing to speak about the Volvo-Geely deal.

“They think that Geely should make major investments in Sweden and there is nothing to suggest that they are going to move everything to China, nothing – in fact they underlined that the brand is strong due to its links to Sweden,” Olofsson told news agency TT in Beijing.

Olofsson underlined the Swedish government’s position to the NDRC that it is expected that research and production would remain in Sweden even after Geely’s purchase of Volvo is completed in the autumn. She underlined that she had informed Geely about Swedish law and the role of the trade unions.

“I have been given the impression that they are very conscious that this is going to be a positive deal and that Geely acts in a decent way in Sweden,” Olofsson said.

China is the world’s largest car market with 10.9 million cars sold in the country in 2009, up 53 percent on the previous year.

The Chinese car market is expected to expand by 15-17 percent in 2010. Volvo already manufactures its S40 and extended version of the S80 in China but in order to penetrate the market further, production in China needs to increase. According to recent reports Geely plans to build a new Volvo factory in Chongqing, near Beijing – or in western China.

Olofsson explained that she was unable to comment on the proposed plans.

“This is something that the firm has to answer. But I have said all along that if we are to reach out to the Chinese market then cars also need to be produced in China,” she said.