State also guilty of gender pay gaps

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Wide pay gaps have been found between male and female CEOs at Norway’s wholly state-owned companies in charge of everything from the railroad to airports and hospitals. Women leaders often earn less than their male colleagues, and the salary and benefits gap is raising questions in a country otherwise known for promoting egalitarian policies.

Trade Minister Monica Mæland, who's had to deal with a string of corruption cases lately, wasn't happy with DNB's answers to her questions about its involvement with tax havens. Now she is demanding more information. PHOTO: Nærings- og fiskeridepartementet

Trade Minister Monica Mæland earned the same as all other government ministers, male or female, for the year beginning in May 2015: NOK 1,264,040. There are wide pay gaps among the male and female CEOs of state-owned companies, however. PHOTO: Nærings- og fiskeridepartementet

The gap became glaringly apparent after the state’s annual release of tax lists last week showing the three key figures (taxable income, net worth and the amount of taxes paid) for everyone filing tax returns in Norway. Newspaper Dagens Næringsliv (DN) could confirm on Monday that female chief executives at 11 of 42 wholly-owned companies in Norway had personal taxable income in 2015 that amounted to 84 percent of that reported by male CEOs in comparable positions.

That’s even lower than the average pay for all Norwegian women, which amounted to 86.1 percent of men’s pay. In some cases the lower salaries paid to female CEOs of state companies was compounded by the fact that the companies they ran were also much larger than those run by male colleagues.

DN reported, for example, that Cathrine M Lofthus, chief executive of Helse Sør-Øst (by far Norway’s largest health care operator), earned NOK 357,000 less in 2015 than Herlof Nilssen, CEO of Helse Vest. Helse Sør-Øst has 77,000 employees and an operating budget of NOK 77 billion (USD 9.5 billion), while Helse Vest has around 27,000 employees and a budget of NOK 30 billion.

Yet Nilssen was paid much more than Lofthus last year. According to the annual reports of both public health care firms, he had annual income of NOK 2.27 million (USD 282,000) plus  NOK 660,000 in pension and other benefits in 2015. Lofthus, meanwhile, was paid NOK 1.89 million (USD 233,000) plus NOK 254,000 in pension and other benefits.

‘Not reasonable’
Some of the difference in pension benefits was explained by the difference in age between Nilssen (58) and Lofthus (45), since costs in their state pension programs increase with age. The leader of Helse Sør-Øst’s board, who took over after Lofthus was hired and was not responsible for her pay package, was nonetheless surprised by the difference in their pay.

“I was not aware of it,” Ann-Kristin Olsen, a former police chief who took over as leader of Helse Sør-Øst’s board at the beginning of this year, told DN. “It is not reasonable that (the salary of) the CEO of Helse Sør-Øst is lower than the leaders of the other health care companies (which are divided by regions in Norway).”

Asked whether that means Lofthus can expect a big raise, Olsen responded that “she is a very competent leader who has delivered good results, and there are things that will be in her favour during the next (salary negotiation) round.” Olsen said factors like seniority and age must be taken into consideration, but she also worries that women in general do not demand as much as men do.

“We can’t get around the fact that there are heavy, inherited gender roles at the bottom of this,” Olsen told DN. “Men are more preoccupied with pay, while women at the top are often not as focused on pay. Women need to do a better job of demanding pay that’s on the same level as men.”

Boards also bear responsibility
Olsen said the boards of directors play an important, too, though. “Those of us who sit and set pay must be aware that we have a job to do,” Olsen said. “It has a lot to do with being conscious of and having the will to enforce equality, but women can’t expect any gifts. They have to make tougher demands.”

Terje Vareberg, board leader of Helse Vest, wouldn’t comment directly on Nilssen’s pay package or why it was so much higher than that for the CEO of the much-larger Helse Sør-Øst. He did say he thinks Nilssen deserves his pay, while neither Nilssen nor Lofthus would comment themselves.

Overall, reported DN, pay differences between female and male leaders of state companies averaged NOK 419,000 in the men’s favour, according to the taxable income figures released on Friday. They may be influenced, however, by other sources of income and deductions, but some specific differences were worth noting.

The male CEO of Avinor, which runs Norway’s airports, reported taxable income of NOK 3.5 million, for example, while the female CEO of state railroad Jernbaneverket reported taxable income of NOK 1.5 million, less than half her transport industry colleague. Taxable income for the 10-highest-paid male CEOs of state companies ranged from NOK 10 million for the outgoing head of Posten (Dag Mejdell) to NOK 3.2 million for the CEO of state broadcaster NRK (Thor Gjermund Eriksen).

The highest-paid female CEO of a state company, meanwhile, was Olaug Svarva of state pension fund Folketrygdfondet, who earned NOK 4.3 million, while the 10th highest-paid female CEO (Hanne Gløtvold at the National Theater) earned NOK 1 million. While the male CEO of state power firm Statkraft (Christian Rynning-Tønnesen) earned NOK 5.3 million, the female head (Grethe Moen) of Petoro, which is in charge of the state’s direct ownership interests in offshore oil fields, earned NOK 3.5 million.

Men cut better deals for themselves
“One possible explanation is discrimination, but first and foremost that the differences begin after women have children,” Professor Kjell Salvanes at the Norwegian business school NHH in Bergen told DN. He said research also shows that women aren’t as tough in pay negotiations as men are. The men simply cut better deals for themselves.

That’s led to criticism, also within Parliament (where members are being paid NOK 906,928 this year), that state pay levels are “running out of control,” according to the leader of the parliamentary committee on business issues. Geir Pollestad of the Center Party, which negotiates hard for farmers’ pay and subsidy, claimed that executives of state-owned companies should be the first to exhibit moderation. Others question why the CEO of state investment fund Argentum, Joachim Høegh-Krohn, should earn NOK 6.5 million, more than four times that earned by Prime Minister Erna Solberg, whose annual salary is just under NOK 1.6 million.

Monica Mæland, Norway’s government minister in charge of business and trade, told DN that she thinks it should be taken for granted that men and women earn the same for the same work. She noted that men and women may have had different career tracks, with women often opting for lower-paid professions, but said she thinks it’s “surprising that Norway today isn’t more balanced on a gender basis among top leaders in business.”

Government ministers like Mæland are earning NOK 1.26 million this year, well above the average annual salary for Norwegians as a whole, set this year by state statistics bureau SSB at NOK 518,000.

newsinenglish.no/Nina Berglund