Volvo pay raise ‘insulting’: Reinfeldt

Volvo Group’s plan to raise the salaries of 250 top executives is “insulting” according to Prime Minister Fredrik Reinfeldt.

“This is obviously provocative, given that the company has problems,” the Prime Minister said on Sveriges Television (SVT) Sunday night.

Volvo’s compensation committee wants to raise the ceiling for bonuses and for the company’s stock option programme.

At Volvo’s upcoming annual meeting on April 1st, the compensation committee plans to propose raising the ceiling for the “performance-based variable salary” of 250 executives from 50 percent to a maximum of 60 percent of their fixed salaries.

It also proposed raising the maximum allotment of shares to senior executives by 50 percent, it added.

Charges of greediness and bad timing have emerged as the company struggles with difficult market conditions.

At the same time as a pay raise is planned for Volvo Group executives, the company is planning to lay off 7,700 people in Sweden, where it employs a total of 30,000 workers.

Now Reinfeldt has added his voice to the chorus of criticism, pointing out that Volvo asked the state for economic support – and was turned down.

“Now we have yet another argument [against Volvo receiving state aid] – there are obviously resources available at the company,” he told SVT, adding he found the proposal “insulting”.

Christer Gardell, head of the Cevian venture capital firm, Volvo’s major shareholder, called Volvo’s proposed execute pay raise “totally crazy”.

“As the main owner it makes me angry to hear these arguments” for boosting executive pay, Gardell told SVT.