Frthr re Former CEO Benefits

ABB Ltd
11 March 2002


ABB reaches settlement agreements with former CEOs on benefits

Zurich, Switzerland, March 10, 2002 - The Board of Directors of ABB Ltd said
today it had completed the reassessment of the pensions and other benefits of
former chief executive officers Percy Barnevik and Goran Lindahl, who have
agreed to restitute a total of CHF 137 million to ABB.

'These settlements, achieved amicably, show that the principles of good
corporate governance are being fully implemented in our company,' said ABB
chairman Jurgen Dormann.

On February 13, the board said it had concluded that approval procedures had
been unsatisfactory for Barnevik's pension, and for Lindahl's pension and other
benefits. Barnevik received some CHF 148 million after his resignation as CEO in
1996. The pensions and other benefits of Lindahl, who left ABB in 2000, amounted
to CHF 85 million.

Under the agreements reached over the weekend, Barnevik will return CHF 90
million, and Lindahl's pension and benefits will be reduced by CHF 47 million.
The restitution amounts were arrived at through actuarial calculations, external
benchmarking of European CEO compensation and negotiations, ABB said. The
restitution is agreed upon, although there is no acknowledgment of a legal
obligation.

Barnevik's pension, based on an agreement from 1992, was set at 50 percent of
his final compensation, composed of his last base salary of CHF 1.5 million and
an average of his performance-based bonuses, the pension effect of which was not
limited.

Between 1988 and his retirement as CEO in 1996, Barnevik's average bonus was
some CHF 8.5 million, ranging from CHF 500,000 in 1988 to CHF 19.9 million in
1994. He also had an agreement with Asea from the 1980s that provided CHF
28.2 million in pension benefit.

'In the first half of the 1990s, when the earnings of ABB developed very
positively, in no small measure thanks to the performance of Barnevik, he
received high performance-based bonuses,' Dormann said.

The 1992 agreement also indexed the pension, and gave Barnevik the right to
retire at 55. Such pension schemes are unusual in Switzerland, but in the
early 1990s they enabled international companies based here to provide non-Swiss
managers with pension guarantees that included benefits accrued abroad.

Lindahl had similar agreements, which did not limit the pension effects of
his compensation. His final base salary was CHF 1.8 million. The minimum bonus
since 1988 was CHF 125,000, and his bonuses in 1995, 1996, 1997, 1998, 1999 and
2000 were CHF 1 million, CHF 1.6 million, CHF 2.7 million, CHF 7.5 million, CHF
12.4 million and CHF 4.9 million, respectively. Pension accrued under earlier
agreements with Asea totalled CHF 16.5 million. This resulted in a capitalized
pension of CHF 61.5 million. In addition, Lindahl was granted CHF 23.5 million 
as severance.

Portions of Barnevik's and Lindahl's pensions were paid out in accordance with
regulations from ABB Stiftung Gemini, an executive pension foundation regulated
under Swiss law, established in 1996. Other portions were paid directly by the
company.

Last year, the ABB Board of Directors began questioning the approval procedures
in connection with the former CEOs' benefits. After deliberations showed that
the board had not been fully informed by the acting people about Lindahl's
package, the board initiated in-depth internal and external reviews into
Lindahl's and Barnevik's pensions and other benefits.

'When we received these reports on February 11, the board concluded that
procedures had been unsatisfactory,' Dormann said. 'It became clear that the
board had never been informed about these benefits, and that the delegation by
the board to individual board members had not envisaged to agree or disburse
such large sums.'

'This led us to decide to open discussions with Barnevik and Lindahl with the
purpose of redefining the pensions of Barnevik and Lindahl, as well as the
severance agreement with Lindahl, and to seek restitution of a part of the
amounts paid. I am satisfied that we could reach an amicable agreement,' he
added.

'The board handled this issue in accordance with its duties, acting to the best
of its ability, openly and with complete commitment,' Dormann said. 'We regret
that our own people and our shareholders had to be burdened by this affair. At
the same time, we are convinced that ABB has found its route into the future and
that the company will continue, thanks to our many loyal, skilled employees, to
make the most of its excellent market positions around the world.'

ABB (www.abb.com) is a global leader in power and automation technologies that
enable utility and industry customers to improve performance while lowering
environmental impact. ABB has some 155,000 employees in more than 100 countries.



For more information please contact:

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ABB Corporate Communications, Zurich      Switzerland: Tel. [phone]
Thomas Schmidt                            Sweden: Tel. [phone]
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