Norway’s huge and powerful sovereign wealth fund may finally start wielding its investment clout to challenge the exhorbitant salaries paid to top corporate executives. It remains unclear, however, how many tens of millions of dollars or pounds an executive can be paid before the so-called Oil Fund votes against it.
It was only a few weeks ago that the Oil Fund failed to challenge the huge pay package proposed for the chief executive of oil company BP, Bob Dudley. His 20 percent pay raise, to a level equivalent to NOK 164 million a year, comes at a time when thousands of oil industry workers are losing their jobs, and at a time when top executives of British companies earn around 148 times that of most other employees.
Newspaper Dagens Næringsliv (DN) reported last fall that the Oil Fund also had failed to object to fully 71 of the 78 executive pay packages proposed by companies in which the Oil Fund has shares. Oil Fund boss Yngve Slyngstad told the Financial Times this week that may soon change. Instead of only evaluating the structure of executive pay packages, the Oil Fund is now set to evaluate an appropriate level of executive pay.
That may force boards of directors to rein in their generous pay offers. DN noted that the Oil Fund risks being seen as a sort of social democratic pay police force. As one of the world’s leading investors, though, company directors may be forced to pay attention to the fund’s objections, or risk being blacklisted.
newsinenglish.no staff
