No Group-bonus in Telia - Sonera cash transaction bonus is paid
- 2003-02-25 23:00 UTC
TeliaSonera has decided that the previously announced Telia Group bonus for the year 2002 of maximum 30 MSEK will not be paid. However, payment of the Sonera cash transaction bonus of 73 MSEK is paid.
In the light of the large negative result for TeliaSonera, following the large write-downs during the previous year, the Board of Directors and the CEO have judged that payment of the Telia Group bonus cannot be motivated. For this reason no payment of this bonus will made within Telia, neither to the CEO nor to the other employees included in this scheme. For a number of years the Telia employee remuneration system has comprised both fixed and variable salary components. As far as the variable components are concerned, they are payable according to results and are intended as a stimulant towards extraordinary and prioritised achievements. The goals for these variable salary components are agreed in advance and well documented for each individual. They comprise both 12-month financial goals and individual achievement goals, which are regarded as essential for long-term positive profitability development. A similar system has been used in Sonera. Evaluation of the variable salary components for the year 2002 is not affected by the decisions regarding the Telia Group bonus or the Sonera cash transaction bonus. In addition to the fixed and variable salary components, there has been a group-wide incentive plan - the Group bonus - in place in Telia since 2001. The 2002-year goal for this plan comprised the planning and execution of the merger between Telia and Sonera, and in addition how well this activity was carried out in parallel with the development of Telia´s business performance. The CEO of Telia evaluates whether or not any payment will be made. The maximum payment according to plan is a total of 30 MSEK. Within Sonera this group wide plan corresponds to a warrants program. The question of the Sonera cash transaction bonus has also been evaluated. This evaluation established that during the spring 2002 Sonera made legally binding undertakings to pay a cash transaction bonus in those cases where individuals included in the scheme were still employed during the offer period and for a time thereafter and that the merger between Telia and Sonera actually took place. Therefore the cash transaction bonus, amounting to a total of 73 MSEK is paid. Telia has no comparable cash transaction bonus. After the large losses we showed for 2002, it would have been unreasonable to make the Group bonus payments", comments TeliaSonera´s President and CEO Anders Igel. "The payment of Sonera´s transaction bonus is strictly in line with contracts made when Sonera was a separate company, but in the light of the losses we have presented I would have preferred that no such payment would be made. It is now time to look ahead and we are presently preparing a new long-term incentive plan to replace the previous systems that have existed within Telia and Sonera."
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