The issue, which has already seen the resignation of Jan Reinas, the chairman of Hydro’s board, has prompted Hydro’s president and CEO, Eivind Reiten, to propose to the board that he will refrain from accepting 50% of the market value attached to stock options allocated in 2005 and 2006, amounting to a reduction of NOK7.8 million.
The proposal would result in a gross payment of NOK19.9 million to Mr Reiten in connection with the termination of Hydro’s stock-option program.
The situation is intolerable. Although the board maintains that the preparation and handling of the stock-option termination have been carried out responsibly, I have decided that it is appropriate for me to give up a portion of the amount that the board has concluded I am entitled to according to previously agreed contracts, Mr Reiten commented in a press release.
Mr Reiten also revealed that a number of the corporate management board’s members have also said that they are willing to relinquish 30% of the market value attached to stock options allocated in 2005 and 2006.
The company said that from now on, Hydro’s top management compensation will consist of fixed-salary and performance-based bonus payments in line with the Norwegian state’s guidelines for executive pay in companies with state ownership.
Despite the scandal surrounding the stock-option termination, Hydro’s corporate assembly has given the board a vote of confidence.
