Norway’s SWF at work to curb excessive pay

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Stockholm (NordSIP) – Norges Bank Investment Management (NBIM), the manager of Norway’s €829 billion Sovereign Wealth Fund – which has been under criticism for certain types of investment but is also in the process of reconsideration – has been making moves to curb excessive top-management pay in the companies the SWF invests in.

The SWF has increased its number of votes against management compensation proposals in the companies it invests in. It has voted against pay plans at offshore driller Noble, Liberty Global, the media company, and Alphabet, Google’s holding company, for example, media outlets report.

NBIM has been urging companies to ensure that a proportion of executive pay be provided as shares locked in for five- to ten years, as well as requiring them to provide transparent remuneration practices.

The SWF itself enforces strict guidelines for pay. Senior fund executives are required to comply with “competitive level” management wages.

NBIM will provide its annual report on its Responsible Investment efforts in February 2018. In the meanwhile, there will be a round of general meetings on the issue next year where the SWF will vote accordingly.

“We’re primarily hoping that companies will follow [our position paper on CEO remuneration],” NBIM Global Head of Investment Strategies Carina Smith Ihenacho said. “Rather than us finding a lot of companies to vote against.”

Image: (c) Benedikt Saxler – shutterstock

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