Siemens execs ditch pay rise, set up BenQ fund

FRANKFURT, Oct 2 (Reuters) Top Siemens managers have scrapped controversial plans to take a 30-percent pay rise after 3,000 jobs at the company's former mobile phone unit were threatened when the business filed for insolvency last week.

Instead, the executives will donate the money to a 35 million-euro ( million) hardship fund for staff at BenQ Mobile, the business Siemens gave away to Taiwan's BenQ a year ago, a Siemens spokesman said on Monday.

Industrial conglomerate Siemens will contribute 30 million euros, with the top managers donating the 5 million they were recently awarded in pay rises by the supervisory board.

Chief Executive Klaus Kleinfeld told the best-selling Bild Zeitung, which had spearheaded a protest against the planned pay hikes: ''We find BenQ's course of action in Germany unacceptable and are helping as much as we can.

''If BenQ leaves the staff standing in the rain, we want to help actively and energetically -- and indeed fast.'' Kleinfeld added that Siemens, which some have accused of offloading the loss-making business to Taiwanese electronics group BenQ with little concern for its future, was investigating possible legal steps against BenQ.

''Our goal was always to secure a solid future for the Siemens mobile business. That's why we supplied financial means, patents and even put the Siemens brand at its disposal,'' he told the newspaper.

BenQ said last Thursday it was no longer prepared to keep pouring money into its loss-making mobile phones unit, which is still headquartered in Germany, after investing 840 million euros in the business in a year.

BenQ Mobile continued to lose market share after its transfer to its new owners and recently put back its break-even target to next year. On Friday, it filed for insolvency in a Munich court.

Kleinfeld said that in view of the changed circumstances, Siemens executives had decided to give up their planned 30-percent pay hikes -- which had caused an uproar in high-unemployment Germany even before the BenQ news.

''The supervisory board justified the salary measures factually and in detail. But now we have a new situation and we would like to give the people a sign of solidarity,'' he said.

REUTERS CS PM1422