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UPDATE 1-DONG Energy says fired CEO over generous job contracts
March 14, 2012 / 4:42 PM / in 6 years

UPDATE 1-DONG Energy says fired CEO over generous job contracts

* Chairman says board lost confidence in Eldrup

* Cites “unusual” contract terms for some employees

* Says Eldrup did not seek personal gain (Adds detail, background)

COPENHAGEN, March 14 (Reuters) - Danish state-owned DONG Energy A/S said it fired its chief executive Anders Eldrup after it found out he had granted certain key employees excessively generous contract terms.

DONG Energy, an oil, gas and electricity producer, had announced on Monday that Eldrup, CEO for 11 years, was leaving by “mutual consent”, without giving further reasons for his departure.

But in a statement on Wednesday, the company said its board of directors fired Eldrup and would launch an investigation into the contracts he had approved for a small number of employees.

“In the last few days, the board of directors of DONG Energy has uncovered circumstances that have led to a unanimous board having lost confidence in Anders Eldrup,” DONG said in a statement. “These circumstances involve some unusual employment and termination terms for a few key employees in DONG Energy.”

Chairman of the board Fritz Schur said in the statement that the board was working on the assumption that only a very small number of employees had been given unusual contract terms.

“The board is unanimous in its view that we should have been involved in these decisions, and it is therefore also a unanimous board that made the decision for Anders Eldrup to step down,” Schur said.

He said the board would not provide further details until clarification was available.

“We do not believe that Anders Eldrup has acted for personal gain in this case,” Schur said.

But he added that a final decision on Eldrup’s termination package would not be made until the inquiry is completed.

According to DONG Energy’s annual report, Eldrup was paid 5 million Danish crowns ($876,000) in salary and 1.08 million in bonus and is entitled to 33.5 months’ salary, including pension, if the company terminates his contract.

Eldrup, a former senior finance ministry official, could not be reached for comment.

But he said in a brief statement to TV2 News that the employment terms he had accepted reflected employment conditions for key personnel in the private sector and that he had made the agreements in the company’s best interest.

Schur had said earlier in the week that DONG Energy’s strategy remained unchanged and that Eldrup was leaving a “strong, well-run company”.

DONG Energy made a net profit of 2.9 billion Danish crowns ($508 million) in 2011, on revenue of 56.8 billion, and the board has proposed a dividend of 1.5 billion crowns. ($1 = 5.7076 Danish crowns) (Reporting by John Acher; Editing by David Hulmes and Will Waterman)

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