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Norway’s $1 trillion wealth fund steps up ‘No’ votes on executive pay

Fund aim to curb excessive top-management pay in firms in which it invests

Norway’s sovereign wealth fund owns about 1.5 per cent of all listed stocks in the world and invests in almost 9,000 companies. Photograph: Gwladys Fouche/Reuters

Sun Nov 26 2017 - 20:20

Norway’s $1 trillion sovereign wealth fund has increased the number of votes against management compensation proposals in the companies it invests in.

According to Carine Smith Ihenacho, its global head of ownership strategies, the fund has been proactive since releasing its position paper in April, aiming to curb excessive and opaque top-management pay in firms.

It has this year voted against pay plans at Alphabet Inc, Google's holding company, offshore driller Noble Corp and media company Liberty Global Plc, among others. The fund was unable to provide aggregated statistics on its publicly available votes, but plans to do so in connection with its annual report on responsible investment, due in February.

Built on the country's petroleum income over the past 20 years, Norway's wealth fund has more than doubled in size since 2012 and crossed the $1 trillion mark earlier this year. It owns about 1.5 per cent of all listed stocks in the world and invests in almost 9,000 companies, having opted to hold equities, bonds and real estate abroad to avoid spurring inflation in Norway.

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NBIM regularly talks to individual companies, including about pay, Smith Ihenacho said, declining to comment on how the fund plans to vote in the next big round of general meetings in May and June next year.

“We have issued a position paper on what we believe to be good remuneration practices,” she said. “We’re primarily hoping that companies will follow those, rather than us finding a lot of companies to vote against.” – Bloomberg

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