Trade Minister Trond Giske of the Labour Party wasn’t the only state politician unhappy to hear that executives leading the state-controlled seafood firm Cermaq could celebrate the sale of its fish-feed unit EWOS by getting a bonus equal to half-a-year’s pay. The bonuses were approved by Cermaq’s board without Giske being told, raising questions over how much control the state really has.
Giske first heard of the bonuses, which total NOK 7 million (USD 1.2 million), when newspaper Dagens Naæringsliv (DN) reported a reference to them in Cermaq’s report on the EWOS sale to the Oslo Stock Exchange. Cermaq’s board had approved the bonuses for seven members of the firm’s top management for carrying out the EWOS sale to investment funds Bain Capital and Altor, which in turn concluded months of takeover drama that had led to the state boosting its stake in Cermaq to nearly 60 percent.
The problem is that the executive bonus program tied to the deal reportedly exceeds state guidelines and is at odds with Giske’s position on executive pay in general. He has fought against high pay and bonus programs for executives, and DN reported that the Cermaq board approved the bonuses without informing Giske. The board even reportedly tried to cover itself by seeking legal advice to support its decision to avoid Giske.
That infuriated Giske, who has since demanded an explanation from Cermaq. Other state politicians are angry as well, with the finance spokespersons for all parties in parliament criticizing Cermaq’s board. They suggest the Cermaq executives have intentionally defied their biggest owner (the state) by rewarding themselves with the extra pay.
‘Totally unacceptable’
“This is very unfortunate,” Svein Flåtten of the Conservative Party told DN, adding that Giske “has all reason” to demand an explanation. “Giske has fought against high pay and bonus programs during his entire term as trade minister,” Flåtten said. “This is a sign that Cermaq’s board doesn’t care about that.”
Rigmor Andersen Eide of the Christian Democrats, another opposition party in parliament, told newspaper Aftenposten that a unified parliament was behind the guidelines on moderation of executive pay that Cermaq has allegedly broken. She also said that Giske’s ministry, which acts as legal owner of the state’s Cermaq shares, should have been informed of the intention to reward Cermaq bosses with bonuses.
Other party spokespersons called the bonuses “totally unacceptable” and even the conservative Progress Party supported the government’s objections, but took the opportunity nonetheless to take a jab at Giske. “If he wasn’t informed about this,” spokesman Harald Nesvik, told Aftenposten, “then I raise a question about the good dialogue he’s said he has with the company.”
Views and News from Norway/Nina Berglund
