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ABB demands return of pay
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February 13, 2002: 4:15 a.m. ET
Europe's biggest electrical engineer wants ex-boss to repay some pay, posts loss
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ZURICH (CNN) - ABB, Europe's biggest electrical engineering group, said on Wednesday it would demand former chief executives pay back some of their pay.
The Zurich-based company said Percy Barnevick and Goeran Lindahl had received about 148 million Swiss francs ($88 million) and 85 million francs ($50.3 million) respectively in pension and other benefits.
ABB's long-time chairman, Barnevik, stepped down late last year after criticism over the company's poor earnings and stock price, which fell more than 60 percent in 2001.
ABB now believes the executives received too much compensation and is demanding some of the money be repaid.
"The Board of Directors has now determined that approval procedures for these benefits were unsatisfactory and that the company will seek restitution of amounts paid in excess of obligations," said Chairman Jurgen Dormann.
The announcement came as the company reported a bigger-than-expected loss for 2001 of $691 million after setting aside $952 million to pay for asbestos-related legal cases and insurance losses.
ABB, which makes products like systems to power factories, electricity transmitters and pipelines and plant for the oil and petrochemical industries, has seen its shares come under pressure amid concerns that an economic slowdown would hurt earnings and its exposure to asbestos claims in the U.S.
The company also said it reduced debt by $2.19 billion in the three months to December 31 to about $4 billion. It plans to cut debt by $1.5 billion by 2002.
"After a detailed review of our operations, we took broad measures across our business to turn the page and put ABB on a better footing," said Chief Executive Officer Joergen Centerman.
"We will continue to focus our core offerings, cut costs and further reduce net debt. I am confident that we will deliver a healthy profit in 2002," he added.
For 2002, revenues are expected to be flat in comparison to 2001, the company said.
ABB's stock slipped 2.1 percent to 13.80 Swiss francs in early Zurich trading on Wednesday. Its shares hit a low of 12.70 francs on February 6 and a high of $18.70 on January 7. 
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