Eesti Energia refuses to slash outgoing board's bonuses

Anne Mere.
Anne Mere. Source: Siim Lõvi /ERR

While the Ministry of Finance, in the role of the general assembly of state-owned power company Eesti Energia, proposed earlier this week that the company's supervisory board slash the outgoing management's bonuses, the supervisory board has no such plan, its chair Anne Mere told ERR.

Mere said that the conditions of the management board's performance pay are included in members' contracts, which is what the supervisory board based its decision on. Because the latter was satisfied with the executives' work last year, the bonuses were set at triple monthly wages.

Earlier in the week, Minister of Finance Annely Akkermann asked the board to slash or even cancel the bonuses based on the government's dissatisfaction with Eesti Energia's work. Akkermann said that cooperation with Eesti Energia heads had been unsuccessful and many of the government's guidelines had not been implemented or been implemented only in part.

Mere said that while the supervisory board discussed the minister's letter, the decision will stand.

She said that Eesti Energia managed to "contain risks" during an extraordinary year and avoid liquidity crises when not all Scandinavian and European companies did.

Mere also listed putting mines to work at full capacity, recruiting 1,500 workers and continued green energy investments as Eesti Energia's 2022 achievements.

Prime Minister Kaja Kallas on Thursday referred to Eesti Energia heads' bonus pay as "absurd" and incomprehensible in a situation where she believes the management has not performed the owner's expectations.

In February, the Eesti Energia supervisory board decided that the management board members will receive a performance bonus equal to three times their average monthly salary.

The performance fee for CEO Hando Sutter will be approximately €75,000; Raine Pajo will receive €51,000; Margus Vals and Andri Avila will receive €48,000 each and Agnes Roos will receive €47,500.

The outgoing management board members will also be paid compensation for their 12-month non-compete clauses, while Mere did not reveal these sums. She added that the additional three months' pay constitutes performance pay as outgoing Eesti Energia executives are not entitled to severance pay.


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Editor: Marcus Turovski

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