Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Ex-ABB CEO Spiesshofer to get $13.3 million payout

Published 02/26/2020, 04:15 AM
Updated 02/26/2020, 04:15 AM
© Reuters.  Ex-ABB CEO Spiesshofer to get $13.3 million payout

By John Revill

ZURICH (Reuters) - ABB (S:ABBN) will pay its former Chief Executive Ulrich Spiesshofer 13 million Swiss francs ($13.32 million) nearly a year after he left the engineering group following a tenure marked by poor stock returns and missed targets.

Speisshofer, who departed in April after nearly six years at the helm, will get 8.58 million francs for his notice period which runs to the end of April this year, ABB said on Wednesday.

He will also get 4.47 million francs for a non-compete clause which runs to May 2021, the company said in its annual report.

Speisshofer did not immediately respond to a Reuters' request for comment.

The payout underscores how executives at Swiss companies still earn large sums despite the country's citizens voting seven years ago to impose some of the world's strictest controls on executive pay.

Earlier this month, it emerged former Credit Suisse (S:CSGN) boss Tidjane Thiam could collect as much as 30 million francs after resigning earlier this month over a spying scandal.

ABB's share price fell 9.4% during Spiesshofer's term as CEO, underperforming the blue-chip Swiss market index which rose 17% as well as trailing rivals like Siemens (DE:SIEGn), Alstom (PA:ALSO) and Honeywell (N:HON).

The engineering company also missed its revenue growth target in 2015, 2016 and 2017.

"The terms of departure of the former CEO, Ulrich Spiesshofer, were as per his contractual arrangements," ABB said in the annual report.

ABB Chairman Peter Voser picked up 3.44 million francs in compensation during 2019 for his eight month stint as interim chief executive, the annual report said. He also received 1.2 million francs for his role as chairman.

Voser, a former boss of Royal Dutch Shell (L:RDSa), will be replaced by ex-Sandvik CEO Bjorn Rosengren, who takes over as new CEO on March 1.

ABB said it has considered "very carefully" the compensation packages for both Voser and Rosengren.

"The committee has set the target total direct compensation for the newly appointed CEO nearly 22% lower than for the former CEO," it said in the report.

"This is derived by a reduction in target short-term and

target long-term incentive opportunity, to more closely represent competitive market practice."

Last week, Voser said ABB's board had long been dissatisfied with the operational performance of the company.

"ABB has never followed the same strategy for a long period, we were virtually always restructuring. That's why we weren't performing," Voser told Germany's Manager Magazin.

"That annoyed me a hell of a lot."

(This story has been refiled with adjusted company code)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.