Outrage over 'US-style' pay for Electrolux CEO
TT/The Local/vt · 26 Nov 2010, 16:18
Published: 26 Nov 2010 13:30 GMT+01:00
Updated: 26 Nov 2010 16:18 GMT+01:00
- Electrolux CEO upbeat despite profits fall (27 Oct 10)
- Electrolux announces a change at the top (23 Sep 10)
- Electrolux posts record second-quarter profit (19 Jul 10)
McLoughlin, who starts his new job on January 1st, 2011, is set to receive up to 74.5 million kronor ($10.63 million) in compensation next year, newspaper Svenska Dagbladet (SvD) wrote on Friday.
The labour group Unionen, whose members had to settle for a 0.7 percent wage increase this year given current economic conditions, are angered by the news.
Unionen's chairwoman at Electrolux, Gunilla Brandt, is shocked that there is plenty of money for McLoughlin while the vast majority of employees were forced to settle for modest salary increase this year.
"The management was very reluctant to provide anything beyond the agreement with reference to how things are going at the company," she said.
Given the sizeable salary in McLoughlin's back pocket, Brandt expects a higher pay increase following the next round of wage negotiations.
"My hope is that he opens up his wallet a little more next time," she said.
The company's owners justified the bonus McLoughlin will receiving by pointing to the fact that he is from the US, where pension benefits are higher.
However, Brandt refused to accept the argument that a Swedish company must pay higher wages in line with overseas firms to attract directors to Swedish companies.
Financial Markets Minister Peter Norman also spoke out against the sizeable compensation package.
"This is a private company and it is up to the owners to determine the terms for its CEO. However, generally it is obviously not good if the tensions become too great between high and low wages in society and this to me seems a little too high," he told news agency TT.
Norman did not have an opinion on whether it may have a negative influence on wage negotiations in Sweden.
"The compensation reflects what one has to pay to recruit American managers," Electrolux Chairman and Investor owner representative Marcus Wallenberg told Expressen.se on Friday.
He said he understands that the compensation can be perceived as high.
"It is important to point out that the pension payment of $6.3 million is a one-time payment and is not distributed to Keith until he retires," Wallenberg told the newspaper.
However, Electrolux shareholders also reacted negatively to the news.
"It is clearly ridiculous to see how some CEOs are glorified and overrated," Carina Lundberg Markow, who represents Electrolux shareholders Folksam, told SvD.