Sweden To Ban Exec Bonuses at State Firms

The Swedish government said on Tuesday it would ban management bonuses at all state-owned companies amid fierce criticism of excessive payment deals in the wake of the financial crisis.

The Nordic country's centre-right government said it would also invite other major corporate stakeholders to discuss "reasonable remuneration levels" at Swedish companies.

Excessive management pay-outs have sparked public outrage on both sides of the Atlantic in recent months, with the bonus schemes cast in stark contrast to widespread job cuts and plunging equity markets due to the financial crisis.

In Sweden, the criticism has come to focus on payments made to executives at both state-run and private pension funds. Both world number two truck maker Volvo and bank SEB have withdrawn proposed management pay schemes.

"There must be no question that the managements of state-owned companies work with the good of the Swedish people in the front of their minds," Finance Minister Anders Borg and other representatives of the four-party coalition government said.

"We are closing the door to all possibilities for variable remuneration and bonus. All the top managers at state-owned companies will only have fixed wages under the new guidelines," he said in a signed article in daily Dagens Nyheter.

The Swedish government owns stakes in companies such as the Nordic region's biggest bank Nordea, telecommunications operator TeliaSonera and airline SAS.

A spokesman for Enterprise Minister Maud Olofsson said that the government would also try to influence remuneration policy at companies in which it owns stakes.

"Representatives of the state on the boards of these companies will push the government's line," spokesman Frank Nilsson said.

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