SWEDEN - The chief executive of the Swedish pension buffer fund, AP3, has given back the bonus she received last year for strong 2007 performance an in effort to quell the public outcry against bonuses.
Hessius is not the first pension manager to return her bonus but she may be the first to return a bonus received for strong performance in 2007, when AP3 saw returns of 5%.
Hillesöy said: "It was on her own initiative."
Hessius did not receive a bonus in 2008 because AP3 posted negative returns of 19.8% last year
The bonus structure at pension funds and other financial providers in Sweden have come under increased scrutiny as losses mounted across the board reflecting the global economic downturn.
Hillesöy said: "It's very difficult to communicate (the reasons behind receiving) a bonus in this climate."
Last year, the government had actually increased the bonus structure to allow up to four months of additional pay, up from two. Now, said Hillesöy, the Ministry of Enterprise Energy and Communications is debating whether or not to lower the bonus ceiling back to two months.
Hillesöy said: "The government has gotten a lot of criticism for changing the rules last July." Håkan Lind, spokesman at the Ministry, did not immediately return a call for comment.
AP3, however, is moving ahead of any government decision.
"Since the debate has been going on we have decided to partially go back to our old system which means that the ceiling for management team will be lowered from 4 to 2 months possible performance-based bonus. Moreover, no bonus will be paid to anybody within AP3 for 2009 if the results for the Fund for 2009 is negative." said Hillesöy.She added that the CEO and Head of Risk and Financial control are not part of the performance-based incentive scheme.
Other Swedish funds have also returned their bonuses. Last week, executives at pension manager AMF returned their bonuses after a local paper has highlighted the firm paid over SEK1m in bonuses for 2008 performance. (Global Pensions, 16 March 2008)
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