The head of the oil fund, Nicolai Tangen, is trying to stabilize the big companies around the world. They need to stop paying their CEOs astronomical salaries. “In many cases, top management steals our money in broad daylight,” says Tangen to Aftenposten. The oil fund manager believes that there is not always a match between the value creation in the companies and what the management is paid.
Tangen makes this clear message while attending the Davos gathering under the auspices of the World Economic Forum. He warns that the Oil Fund will be stricter in voting at the general meetings of the relevant companies. Being the world’s largest single investor gives Tangen & co. great weight. The oil fund will concentrate on companies where the top managers earn over NOK 200 million.
The buck is set to fit the oat sack.
The oil fund, which has a market value of over NOK 13,000 billion, has invested most of its assets in 9,000 companies in 70 countries around the world. It is part of the picture that this year Norwegian politicians spend 317 oil billion for good purposes over that state budget. By comparison, the entire state budget is NOK 1,748 billion.
Spending too much oil money in Norway will lead to economic overheating and an excessively high interest rate in this country. At the same time, the point of the Oil Fund is that future generations will also benefit from our shared wealth. The oil industry is in poor luck, and thus it will be extra important that Norway can reap a little extra as a global interest-earner.
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Nicolai Tangen’s primary job is to ensure the greatest possible return on the Oil Fund’s billions. Therefore, it is in Norway’s own interest that the top managers of the world’s largest companies are not paid excessively high salaries. Already last year, the Oil Fund voted against the astronomical salary package for Apple CEO Tim Cook. And in the next round, his salary was reduced by 40 percent. This year, Cook will “only” earn 485 million.
In the USA, it is relatively common for the CEO to also be chairman of the board of his own company. This is an unfortunate combination, because the chairman must ensure that the CEO is paid in line with value creation. This control is greatly weakened when the buck is set to look after the oat sack.
[ Kjell Werner: Siste dans med Audun. ]
A typical top manager in the USA in 2021 had a salary of a staggering NOK 150 million, after an average mark-up of 15 percent. In comparison, the oil fund manager received NOK 6.3 million for managing the Norwegian money bin. Tangen’s salary is high in a Norwegian context, but modest when we look at it with global eyes. Here it is appropriate to remind Norwegian top managers that they too should show more moderation than has been the case in recent years.
Nicolai Tangen shows the way. As oil fund manager, he proves that Norway can make a difference globally, albeit marginally.
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