The guessing game has begun, with Norwegian media speculating over who will succeed Helge Lund as chief executive of Norway’s largest company, Statoil. New bosses are also needed for both Telenor and Yara, with the state playing a big role in all three firms.
Newspaper Stavanger Aftenblad was the first to report during the Christmas holidays that the top candidate for the Statoil post is Rune Bjerke, currently the head of Norway’s biggest bank, DNB. He was quick to have his bank’s communications department reject the thought, but that may not mean much. Lund himself denied he was a candidate until just before he was named Statoil’s CEO 10 years ago.
Newspaper Dagens Næringsliv (DN) reported just before New Year that the Danish headhunter Tobias Petri is busy interviewing candidates for the top post at Statoil and DN claimed they’re all middle-aged men. Four of them already work at Statoil: Lars Christian Bacher, age 50, is currently Statoil’s top executive in charge of exploration and production; John Knight, age 56, is in charge of strategy; Arne Sigve Nylund, age 54, is responsible for exploration and production on the Norwegian Continental Shelf, and Torgrim Reitan, age 45, is finance director.
Executive pay issue
External candidates include Bjerke, PGS boss Jon Erik Reinhardsen, Vattenfall CEO Øystein Løseth and E.on boss Jørgen Kildahl. The Norwegian man who heads Schlumberger, Pål Kibsgaard-Pedersen, has also been considered but it would be difficult if not politically impossible for state-controlled Statoil to match Kibsgaard-Pedersen’s high executive pay at Schlumberger.
The pay issue also rules out many other oil industry executives. Even though Norway is a famous for its high prices and high cost of living, executive pay, while substantial, is nowhere near the astronomical levels that executives can demand at many international firms abroad, not least in the US. The huge pay gaps between executive salaries and the vast majority of employees are politically incorrect and unacceptable in Norway’s egalitarian-minded social welfare state.
Statoil Chairman Svein Rennemo has repeated claimed that the recruitment process for a new CEO at Statoil can take time, despite the urgency of finding a new boss at a time of diving oil prices and the uncertain fate of huge offshore projects. Rennemo has also said that it’s not critical that the new Statoil boss be Norwegian, but that he or she must have a solid understanding of Norway and how Norwegians think. Many analysts think that means a Norwegian chief is likely, not least because of the pay issue.
Minister distances herself
Monica Mæland, who, as the government minister in charge of business and trade, reprepresents the state’s 67 percent stake in Statoil, claims she won’t involve herself in “concrete processes” of finding new CEOs either for Statoil, Telenor or Yara. She wishes there were more female candidates, and it was her Conservative Party colleague Ansgar Gabrielsen who spearheaded the drive to get more women on boards of directors, by setting a quota of 40 percent.
As for pay levels in Norway, the CEO at Norsk Hydro, Svein Richard Brandtzæg, said he thinks the recent period of double-digit pay hikes for top executives, also in Norway, has come to an end. Brandtzæg told DN that the dives in oil prices and the value of the Norwegian krone mean meager pay raises all around, and that leaders will also need to accept “moderate” salary growth. “Given what’s happening in the oil industry right now, there are no expectations that pay raises will be as high as they’ve been,” he said.
Others disagree, with the head of one of Norway’s large trade unions telling state broadcaster NRK on Monday that expects higher pay demands because of rising prices caused by the weaker krone.