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Bonus payments tearing Finnair apart as six board members fired by  responsible  minister

Tuesday, 20 March 2012
The Finnish airline, Finnair is in crisis after a series of revelations about secret million euro bonus paid to top officials while cutting services as well as a flat business. Last week, the minister in charge of government ownerships, Heidi Hautala announced the firing of six members of the board who had been responsible for sanctioning the bonuses.

The former chairman of the board is portrayed as villains and the new board has been fired, according, according to reports.
The Finnish Minister responsible for government ownership steering, Heidi Hautala, says Finnair board members could repay loyalty bonuses voluntarily. Speaking on a radio programme on Monday, Hautala said such a move would be appreciated.

A group of 18 senior managers in Finnair had received a secret bonus program, while the Finnish airline implemented a tough management program that reduced employee wages and deteriorating employment conditions. That was only one of the ingredients in the scandal that now rolled up in Finnair where the brand was drawn in the dirt.

The bonus program was designed after the former CEO Jukka Heinonen resigned in 2009, and was sutured to the rest of the line to stay. The new CEO Mika Vehvilšinen was handpicked from Nokia Siemens and got a recruitment bonus of €1.6 million that was accepted by the board.
The board has now been fired by Heidi Hautala (Greens), minister for corporate governance, with only weeks to go until the general meeting.

She said the Finnair board had violated guidelines governing the granting of bonuses within state-owned corporations.
Hautala also indicated the fate of loyalty bonuses was under consideration in the drawing up of fresh rules.
“It appears that no matter how strict the rules are – and they must be tightened at regular intervals – there remain loopholes that can be abused,” Hautala noted.

The minister’s comments come after it was reveled that senior Finnair executives were granted loyalty bonuses by the state-owned airline’s board. At the same time, Finnair reached agreement with staff on cost-saving measures including a wage freeze.
Last week, Heidi Hautala announced the firing of six members of the board who had been responsible for sanctioning the bonuses.
By Team

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