The head of the Petroleum Fund, Nikolai Tangin, takes on a much-needed and timely compromise with extremely high management salaries in large global companies.
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In an interview with the Financial Times (FT), Tangen said corporate greed has reached a level not seen before.
The Global Government Pension Fund, commonly known as the “Oil Fund”, holds large holdings of shares in many of the world’s most famous companies.
The fund has investments equivalent to 1.5 percent of the value of all listed companies in the world. Our combined wealth is invested in more than 9,000 companies around the world.
So Tangen’s lyrics get a lot of attention. On Friday mornings, his take on the culture of greed was mainly in the Financial Times.
In a post in Dagens Næringsliv, Tangen and property manager Carine Smith Ihenacho also spoke out about the Petroleum Fund’s views on CEO salaries.
This year, the Petroleum Fund decided to do something about the accelerated wage development at the top level.
They started in US corporations where the fund has proprietary interests and top management salaries are greater. But they will also look at the level of salaries in European companies where the fund has significant investments.
The Petroleum Fund will actively use voting rights to influence companies in the right direction, in line with the principles established by the Fund previously.
This is essential when we see huge salary packages being given to top managers, even in cases where companies’ financial results are modest.
The average salary of CEOs at the 500 largest listed companies in the United States rose last year to $14.2 million, or roughly 140 million crowns. There are many who earn much more than that.
The Petroleum Fund voted against the Apple chief’s salary package, which is estimated at between 91 and 135 million dollars in 2021. This corresponds to an incomprehensible 900-1100 million crowns.
This week, the fund also went against a higher salary package at Intel. According to FT, the Petroleum Fund also voted against the proposal to pay executives at IBM and several other large companies.
Tangen argues that a large portion of senior managers’ salaries should be in the form of restricted stock for many years to come. Management will then have overlapping interests with long-term investors, such as the Petroleum Fund. There should be complete transparency about the content of salary packages.
The higher level pay spiral must be broken. For several reasons. Not in the long-term interests of shareholders. It provokes reactions among the employees. This is a bad sign for society. Especially at a time when the market value of many companies is declining.
Shareholders can use their vote. But individual corporate boards have a major responsibility to fall back on. Here, Tangen has played a commendable role as a driving force.