Government Didn’t Oppose Sky-High Pension for Finnair CEO

Finnair says its CEO deserved an extra €130,000 pension pot, even after the company had stopped the practice back in 2013.

File picture of Finnair plane / Credit: Finnair

Finland’s national airline says it didn’t get any response from the goverment after it told them CEO Pekka Vauramo would be getting a sky-high extra pension worth €130,000.

It’s the latest twist an an ongoing story that started when Finnair decided back in 2013 that it would stop giving supplementary pension pots to senior staff.

Despite this, the company proposed giving the €130,000 to Vauramo. Finnair’s board considered the proposal, and approved it unanimously in June 2016.

Finnair says it published the decision on its website last August, and in any case had already informed the state, which owns a controlling share in the airline.

The Minister responsible for State Ownership, Minister of Industry, Mika Lintilä, asked Finnair for an investigation on the supplementary pension after Helsingin Sanomat newspaper wrote about the case last week, and it became clear the ministry was unaware of the payment.

Today, Finnair released a statement justifying their decision to give the extra pension, saying the CEO had made a strong contribution for three years when the decision was taken. In addition, the company says it makes an annual comparison of compensation that other listed companies pay to their CEOs. According to the comparison, 70% of listed companies have an additional pension as part of the total remuneration package.

Finnair Chairman Jouko Karvinen says he’s sorry that Minister Lintilä heard about the extra pension via the media, despite the airline’s “clear objectives and actions to keep the owner management informed about the plan”.