DONG Energy has released the findings of a legal investigation to assess whether actions of the company's ex-CEO, Anders Eldrup, constituted breach of his duties as CEO.
Following DONG Energy's announcement earlier this month that Eldrup was resigning, the company's board stated it had ‘uncovered circumstances that have led to a unanimous board having lost confidence’ in Eldrup. However, the company was scant with details, saying only that the circumstances involved ‘unusual employment and termination terms for a few key employees in DONG Energy.’
Since then, DONG Energy's board has consulted with law firm Norrbom Vinding and a legal adviser to the Danish government, and both law firms unambiguously concluded that Eldrup's conduct qualifies as a breach of contract.
According to the attorneys' findings, "The inquiry conducted shows that several identified employees have obtained terms of pay and employment which go beyond what the general remuneration policies of DONG Energy would warrant. The terms of pay and employment in question have been granted by Mr. Eldrup."
In addition, "It is found that although their base salary does not seem remarkable when compared with the average base salary of employees at the organizational level in question which was known by the board of directors, the employees have obtained grants of variable pay elements to an extent which go far beyond the general remuneration policies of DONG Energy, and similarly, bonus instruments have been used which do not even exist in the bonus programs which have been adopted by and apply in DONG Energy," the legal findings state.
Against this background, in accordance with the conclusions on breach of contract, the company's board unanimously decided that Eldrup will only receive salary during the termination period to which he is entitled under his contract, and that he will thus not receive any termination payment under the contract.
The board stressed that Eldrup's resignation will not change the company's strategy. As previously announced, Carsten Krogsgaard Thomsen, chief financial officer of DONG Energy, has been appointed as acting CEO of DONG Energy and its wind power business unit.