OSLO: Companies whose shareholders include Norway’s $885 billion sovereign wealth fund can expect closer scrutiny of executive pay when the next round of annual investor meetings begins.
The Norwegian fund is working on an updated policy to address executive pay at the 9,000 companies it is invested in and expects this to be in place “in a month or two”, before the voting season on company boards begins, a top official said.
Egil Matsen, the Norwegian deputy central bank governor in charge of supervising the fund, said it found corporate pay packages “very complex” and that their transparency had “worsened”.
The Norwegian fund has become more active in corporate governance matters such as the election of directors and board composition, reflecting a more interventionist approach from the wider fund management industry, particularly on pay.
Matsen said the fund, which is managed by a unit of the central bank, did not have a stance on the appropriate level of executive pay, but that they were “very complex packages”. “It’s first and foremost the complexity: is there a clear link between results and payment?” he asked.
“The transparency of these packages seems to have worsened over time, and that could be a cause for us to establish a position on what our investment managers’ stance is here”.
The fund invests the proceeds of Norway’s oil and gas revenues in foreign stocks, bonds and real estate. Its value corresponds to about $170,000 for every Norwegian.
