5 March 2003

Minister slams pay hike for Norsk Hydro boss (Dagens Næringsliv)

Senior Conservatives have savaged Norsk Hydro’s board of directors for chief executive Eivind Reiten’s pay hike last year. Trade and Industry Minister Ansgar Gabrielsen followed up with signals and even threats regarding executive pay rises in companies in which the state has significant shareholdings. “And that amounts to 40 per cent of the Oslo Stock Exchange’s total value,” he added. Mr Gabrielsen was, on the whole, acidic in his comments on the executive pay rises awarded by partly state-owned companies. “There is never an ideal moment to publish large bonuses, but some moments are less bad than others,” he said, adding that there is no reason for executive salaries to rise automatically when Norwegian companies make acquisitions in countries whose general level of executive pay is higher than here. Finance Minister Per-Kristian Foss also felt the need for plain speaking. He praised Aker Kværner’s chief executive Helge Lund for asking his board of directors not to raise his salary.

Higher pay rises for executives employed by state-dominated companies could result in their board chairmen being given the sack by Trade and Industry Minister Ansgar Gabrielsen. Norsk Hydro’s chairman Egil Myklebust has come under fierce attack since it became known that chief executive Eivind Reiten received a NOK 1.2 million salary and bonus increase last year. The Government has committed itself to ensuring a moderate level of executive pay rises. “Any company that chooses another course is, in my opinion, undermining what I think is a very important factor for Norwegian export industries – that pay rises at home are as low as those in the countries with which we compete,” said Mr Gabrielsen.

Trade and Industry Minister Ansgar Gabrielsen (Con) is threatening to sack the chairmen of state-owned enterprises that award large pay rises. But according to Statoil’s chairman Leif Terje Løddesøl, boards must do what they feel is right. Statoil’s chief executive Olav Fjell now looks set to receive a bonus of more than NOK 1 million this spring. Mr Gabrielsen has indicated that the fate of the state-controlled oil company’s board depends on whether it grants Mr Fjell’s bonus or not. Company chairman Leif Terje Løddesøl does not think much of the Minister’s directives. “We place a great deal of emphasis on Mr Gabrielsen’s views, but we do not take much notice of threats,” said Mr Løddesøl in an interview with NRK.

Prime Minister Kjell Magne Bondevik has called on all political parties to collaborate in an effort to reduce unemployment. Around 100,000 people are out of work, and Mr Bondevik believes it is time for politicians to put aside party political considerations and work together. The PM has particularly high hopes for a collaboration with the Labour Party and the Norwegian Confederation of Trade Unions (LO). Labour has already said that public spending should be kept within what is defined as a responsible framework. The LO and Labour want to bring unemployment down by means of zero pay rises for top executives and investments in natural gas. These are the main planks in a proposal to be published today. The LO and Labour want a moderate pay settlement this year, in which those industries competing in international markets set the pace for other groups to follow.

Today marks the start of a campaign by the Confederation of Norwegian Business and Industry (NHO) to get more women into senior management positions and onto company boards. The aim is to pre-empt Trade and Industry Minister Angar Gabrielsen’s threat to impose gender quotas from 2005 if businesses do not voluntarily increase the proportion of women at the top. A survey carried out by the NHO last autumn showed that 84 per cent of Norwegian companies were in favour of having more women in management positions and on the board, but that they had difficulty finding women who were both competent and willing to take on such jobs. This lies behind the campaign, “Female Future”, which NHO president Jens Ulltveit-Moe will launch today.

The Christian Democratic Party’s participation in the ruling coalition could be in danger if local authorities are not given more money. Following the publication yesterday of the party’s worst poll results for 11 years, senior Christian Democrats are now wondering if the party can remain inside the Government. “We cannot continue in office if support for the Christian Democrats falls towards the minimum needed to win a seat in the Storting. It would be suicide to continue without doing something about it. Local authority funding is a key element in this,” said Oddvar Skaiaa, chairman of the Aust-Agder county council.

Kristin Halvorsen, leader of the Socialist Left Party, has warned her own party not to work actively for a Norwegian withdrawal from the EEA Agreement. She claims that such a move would simply strengthen the hand of those in favour of EU membership. The Socialist Left Party opens its annual conference in Tromsø tomorrow. One of the issues expected to be debated is the party’s handling of the EU membership issue. “I think it could cause problems in a renewed EU debate if too much uncertainty is generated about what the alternative to the EEA Agreement is. This could cast a shadow over the real issue, which is to keep Norway out of the EU,” said Ms Halvorsen in an interview with Dagsavisen. Ms Halvorsen’s comments put her on a different course to the Centre Party, which totally opposes the EU. However, Ms Halvorsen pointed out that she had discussed the EEA Agreement with opponents of EU membership within the Labour Party, and said that they support her view.

The Progress Party will force the Government to increase Norwegian emergency relief for the civilian population in Iraq, a move described by Foreign Minister Jan Petersen as “inconsiderate”. The Progress Party is preparing to inflict a defeat on Prime Minister Kjell Magne Bondevik that must count as one of his most embarrassing ever. “We are giving the Government one day to show that they will improve the financial framework for the humanitarian organizations operating in Iraq. It is too late to start organizing relief measures for the civilian population when the war is already underway,” said Morten Høglund, the Progress Party’s foreign policy spokesman.

The payment of state grants to the embattled shipyard Fosen Mek. has been stopped by Trade and Industry Minister Ansgar Gabrielsen, despite the fact that the shipyard has been cleared of fraud. “Legally speaking, this does not mean that Fosen has an incontestable claim for state aid. But political logic would indicate that Mr Gabrielsen is heading for certain defeat on this,” writes Aftenposten’s commentator.
(Aftenposten)




Although the setbacks suffered by the Government Petroleum Fund leave Finance Minister Per-Kristian Foss with less money to spend in next year’s national budget, he is still promising more tax cuts. He hopes the pain will be reduced by a drop in the exchange rate. A large proportion of the losses made by the Petroleum Fund are due to the rise in value of the Norwegian krone last year.
(Dagens Næringsliv)




The Norwegian Confederation of Trade Unions (LO) is giving the Labour Party all the help it can to unseat Prime Minister Kjell Magne Bondevik. This is clear from the proposals, dubbed the solidarity alternative, which the LO and Labour are publishing today. Both organizations reject the use of more oil money as a way of reducing unemployment.
(Dagens Næringsliv)




According to NRK’s television news bulletin, Thorleif Enger, head of Norsk Hydro’s Agiculture Division, will take over from Tom Vidar Rygh as chairman of Telenor. Jan Reinås, chief executive of Norske Skog, is thought to have been first choice for the Telenor chairmanship.
(Aftenposten)




People hit by this winter’s huge electricity bills will have to take out loans or consider selling off personal assets before Social Affairs Minister Ingjerd Schou and Local Government and Regional Affairs Minister Erna Solberg will grant them additional social security handouts.
(Nationen)




Small investors and other unit trust investors lost an incredible NOK 26 billion last year. The fall in share prices the world over explains why the value of savings in Norwegian registered securities was cut to the bone last year
(Aftenposten)




More young people are committing criminal offences. The number of young people who commit less serious and less frequent offences is also rising, according to criminologist Ragnhild Bjørnebekk.
(Nationen)

Here we go again. The business sector calls for moderation, while boards of directors grant senior executives juicy pay rises and fat bonuses. The only thing reminiscent of a zero pay settlement at the top of the business pyramid is the number of zeroes on their pay cheques. We do not know if it is due to a lack of social antennae, arrogance or downright foolishness, but intelligent it certainly is not. Intelligence is, as we know, the ability to learn from one’s experience, and the business sector has experienced time and again that the greed of individual top executives is soundly punished when it comes to national wage negotiations. It is not so very many years ago that it prompted widespread strike action – but apparently that has been forgotten. This time it is Eivind Reiten, chief executive of mostly state-owned Norsk Hydro, who has been caught with his pay cheque hanging out. Den norske Bank’s board also thought that their chief executive Svein Aaser deserved a star-studded bonus and a solid pay hike last year. The argument is the same old saw: top executive pay levels are so low in Norway. This is no longer true. Pay levels in this exclusive club have risen sharply over the past ten years. Unfortunately, the same cannot be said for company profitability or the quality of the leadership displayed. It is therefore laudable that individual executives recognize where their responsibilities lie. Aker Kværner’s chief executive Helge Lund has told his board of directors that he does not want a pay rise this year, despite presenting the company’s best financial results for five years. More people should follow his example.