The discussion about salaries and bonuses is not new on FinnishNews. Many of the big Finnish companies that depend heavily on the domestic Finnish market, are almost operating like domestic monopolies with very little true competition.
You only have to look at the CEO’s and other senior managers of the 3 biggest pension companies to see that Ilmarinen, Varma an Elo. None of them have never worked abroad or plan to, and yet they have huge salaries, where their basic work is lobbying to keep foreign and other Finnish competitors out of the market, and receiving and hanging on to board positions in big those companies who are their clients or happen to be close to them.
S-Group and Kesko are another good example – and they too scoop up millions from their retail duopoly. Banking, Nordea and OP-Group, is just the same. It would be refreshing to see how their CEO’s faired at Goldman Sachs or JP Morgan Chase!
And then there are the 3 forest companies and Neste. They are doing a better job than most but, again, they are hardly being swamped (never) with offers from abroad.
Valio, Alma, YIT and the small number of their fellow competitors are all led by very domestic men and women, all of whom are competent, but none are seeing or seeking opportunities abroad.
and let’s get back to Finnair…
…Finnair does face some competition from Norwegian and SAS, but they have the best slots at Helsinki and at the other national airports because Finavia and Finnair happen to be owned by the government. There is hardly cut-throat competition. Both Norwegian and SAS enjoy some degree of protection in their respective home markets.
…and the Finnish government has been perfectly open about no extra pensions for Finnair’s, and other government owned companies top management since 2013. If the responsible ministers cannot or do not want to impose their own directives then they should either resign or come clean. Mr. Olli Rehn, former Trade Minister, and Mr. Juha Sipilä, Prime Minister, have been responsible in the past for overseeing Finnair. They have not done their job according to the government’s own decision. Is doing nothing acceptable, or is a slap on the wrists enough? Hardly!
It is clearly unacceptable that the Finnair board has just chosen to ignore or challenge the government’s directive. It is hard to believe that the CEO was about to leave for BA, Singapore Airlines or VirginAtlntic! One can be pretty certain that no other airline has offered him a job. The improvement in Finnair’s results is largely a result of increased passenger numbers as the economy has recovered! So what should happen now to the chairman of the board and his colleagues. Is doing nothing acceptable, or is a slap on the wrists enough? Hardly!
The Norwegian’s wealth fund is pragmatic, and so are some of the big American pension investors. They are trying to ensure that the pay of top management where they invest is down to more reasonable levels.
Super high salaries cannot be justified just because of the following reasons:
- The board wants to have the CEO at or near the same level as other CEO’s. This is nonsense because all boards can follow other boards’ decisions blindly and the whole system becomes an automatic elevator!
- The board thinks that the CEO is about to leave for the next job abroad – so far few if any have disappeared to foreign shores – so this too is nonsense.
- The board wants to compensate for hard work and longer hours. Most of the CEO’s work does require hard work and stress, but it is also much the same for anybody with any job these days. Most CEO’s are hard-headed ambitious Alpha-types that actually enjoy the pressure and prestige. They do not have to be paid 30 to 200 times what ordinary folk are paid, and get huge pensions. Even if they work 60 or 80 hours a week that is just double what ordinary folk do who cannot retire at 60 years.