Norway’s $870-billion sovereign wealth fund is targeting high salaries paid to senior executives as it seeks to exert more influence on this issue.
The world’s largest wealth fund is looking for a first company to target, with its focus on pay in the coming months.
“We have so far looked at this in a way that has focussed on pay structures rather than pay levels,” Yngve Slyngstad, chief executive of the fund, told the Financial Times.
“We think, due to the way the issue of executive remuneration has developed, that we will have to look at what an appropriate level of executive remuneration is as well.”
The move comes as executive pay faces increased scrutiny from shareholders.
Last month, almost 60% of BP shareholders rejected the oil giant’s remuneration report, which awarded boss Bob Dudley £13.8 million, in a non-binding vote.
Centrica chief executive Iain Conn also faced investor anger over his £3 million pay package during the company’s annual general meeting (AGM) in April.
Norway’s fund has been pushing to be more active in corporate governance matters such as the election of directors and board composition. But it has previously refrained from taking a view on executive pay given concerns that its actions would be perceived as being influenced by Scandinavian pay conditions, the report said.
Executives in the Scandinavian region are paid much less than their counterparts in Britain or US and the gap between the highest and lowest paid in companies is narrower, according to the FT.
The fund believes executive compensation has become a global issue and is looking for an example of bad pay for it to launch what it calls a position paper, laying out its principles for what it expects on a subject, the report said.
“We are looking at to how approach this issue in the public space,” Slyngstad said. “We will choose the right instance for the right case of voting.”
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