Norway’s Wealth Fund Wants Cap on Executive Pay
Norway’s Wealth Fund Wants Cap on Executive Pay

Norway’s Wealth Fund Wants Cap on Executive Pay

Norway’s Wealth Fund Wants Cap on Executive Pay

Norway’s sovereign wealth fund, the world’s largest, on Friday called for a cap on executive pay and fiscal transparency at the companies in which it invests, further buffing its reputation as an ethical investor.
In every company, “the board should... disclose a ceiling for total remuneration for the coming year” for the chief executive, Norway’s central bank, which manages the fund built on the country’s oil revenues, said in a new policy document, AFP reported.
In an era of fat-cat salaries that have drawn widespread criticism, the stance is all the more significant given that the fund holds stakes in about 9,000 companies worldwide, representing 1.3% of the global market capitalization.
With its weight, and its often-praised management requirements on ethics and transparency, the Scandinavian fund often sets the bar for investment funds worldwide.
The shift comes as challenging a company’s remuneration policies has proven increasingly successful.
Last year, BP chief executive Bob Dudley saw his overall pay cut by 40% after a rebellion by shareholders. Volkswagen decided last month to cap salaries for members of its board of directors, a hot topic in Germany.
And on Sunday, under pressure from politicians and unions, six top executives at the Canadian engineering group Bombardier agreed to have their promised pay increase reduced by half.
For many years, the Norwegian wealth fund had little to say about executive pay, but recently it has begun to play a more active role.
Last year, it voted against the executive pay policies at companies including Alphabet (the parent of Google), Goldman Sachs, JP Morgan and Sanofi, according to The Financial Times.
“We are not in a position any longer as investors to say that this is an issue we are not going to have a view on,” the fund’s director, Yngve Slyngstad, told the newspaper, noting that the principle of “say on pay” was now spreading in a number of countries.
The fund’s policy document said that in order to align a CEO’s interests with those of shareholders, “a substantial proportion of total annual remuneration should be provided as shares that are locked in for at least five and preferably 10 years, regardless of resignation or retirement,” and without any conditions based on a company’s performance.
In another document published Friday, Norway’s central bank also called on companies to implement fiscal transparency. “Taxes should be paid where economic value is generated,” it said, expressing clear opposition to so-called fiscal optimization, where companies declare their profits in countries with lower taxes.

Short URL : https://goo.gl/novsPk
  1. https://goo.gl/XhSSfC
  • https://goo.gl/CF5yFT
  • https://goo.gl/c5QTjd
  • https://goo.gl/UOemts
  • https://goo.gl/3uvbr9

You can also read ...

An expanding trade war threatens to squeeze incomes.
The untold story of the world economy—so far at least—is the...
Asian Stocks Retreat, European Shares Mixed
Asian stocks closed lower on Monday as investors digested the...
PwC Says Australian Firms Deliberately Going Broke
Companies that deliberately fail are costing the Australian...
Chinese Premier Li Keqiang (C) shakes hands with Jean-Claude Juncker (L) and Donald Tusk after the meeting in Beijing on Monday.
China could open its economy if it wished, European Commission...
Experts Say China Can Cope With Uncertain H2
China is confident it can cope with a more uncertain second...
Global Growth Peaks With a Whimper
It wasn’t runaway inflation or a financial implosion. The...
Russia has been seeking ways of decreasing dependence  on the US currency.
One of Russia’s largest banks, VTB is seeking to decrease the...
Turkey Budget Deficit Expands
Turkey’s central government budget balance recorded a deficit...

Add new comment

Read our comment policy before posting your viewpoints