Norway's sovereign wealth fund: Nicolai Tangen denounces the greed of the bosses

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Sharp criticism of excessive manager salaries: Sovereign

wealth fund boss

criticizes the horrendous remuneration because it dilutes the profits of shareholders

Photo: Fredrik Solstad/Bloomberg via Getty Images

The world's largest sovereign wealth fund has denounced "corporate greed" and excessive salaries for "mediocre performance."

"In particular, we will target high salary packages that are not justified by performance, are opaque or not sufficiently long-term," said the head of the Norwegian oil fund,

(55), to the "Financial Times".

"We are in an inflationary environment in which many companies with rather mediocre performance are offering very high salary packages," Tangen continued.

Corporate greed is reaching unprecedented levels and this is costing shareholders dearly in the form of dilution.

Norway's pension fund currently has a market value of around 1.2 trillion euros, making it the largest sovereign wealth fund in the world.

It is fed oil and gas money, administered by the central bank on behalf of the Treasury Department, and invests in thousands of companies around the world, including major corporations like Microsoft, Apple and Amazon.

About 70 percent of the assets are invested in shares, which also makes the Norwegians the largest single shareholder in the world.

Its market power is therefore great, and the fund now wants to make greater use of it.

At the general meetings of Intel and Apple, the management around Tangen already refused to discharge the executives, as the FT further reports.

The fund also voted against the planned remuneration packages at IBM, General Electric and Harley-Davidson.

Compensation for US top managers has risen to a record high

As data provider Equilar has calculated, the average salary of top executives in the United States rose by 31 percent last year to a record $20 million.

The top earner among the 100 top-selling US companies was Intel CEO

(61) with around 178 million dollars.

The salary difference between top management and the average earnings of the employees has increased again.

According to the study, in 2021 company bosses will now be paid 254 times the salary of the average worker.

In 2020 it was still 238 times.

And this despite the fact that the average salary of the employees has also increased compared to 2020 from 68,883 to 71,869 US dollars.

Also Europe in view

According to former hedge fund manager Tangen, the problem will only get worse if investors do nothing.

"If shareholders don't become stricter about their voting behavior, this will continue," Tangen told the FT.

However, he is not fundamentally against high remuneration, as the examples of JPMorgan and Amazon show.

The fund also doesn't cap compensation, according to

, chief governance and compliance officer at the sovereign wealth fund, preferring companies that offer executives high-stock packages.

In this way it can be ensured that top management is in line with the interests of investors.

According to Smith Ihenacho, the Fund's current focus in its fight against inflated salaries is on the United States because salaries are highest there.

But the fund will also keep an eye on Europe and other countries, as the manager assures.

mg