Wait, wait. These shenanigans involve something called “ethics” in the context of business. I’m glad this sort of scourge won’t come to America.
Thank goodness we have laws to protect us from such degeneracy!
Can you imagine the chaos that would result in “ethics” coming to businesses?!? It would be the end, THE END I TELL YOU!!
How do you say, “let the tumbrels roll” in Norsk?
I have only one quibble with this post, which is the assertion that Norway was “historically one of the poorest countries in Europe”, the implication that this was true when they found oil, and the idea that oil wealth created Norway’s “extensive welfare state”.
While Norway’s relatively poverty may have been true in the 19th Century, by 1970 (just prior to the beginning of oil production from the North Sea), Norway was already the fourth or fifth richest country (per capita GDP) in all of Europe. Only Sweden, Switzerland, and Luxembourg were clearly richer; Denmark was basically tied with Norway.
Now propose that 20% wage increase for each of your employees making less than $100k/year, and see what happens.
Hmmm… not so sure this is about ethics. It’s a fund with an extremely long view and as such it tends to have an aversion to investing in companies where the focus is on one single person who can walk away any minute. (As opposed to investing in a company with a coherent workforce that gets along on equal terms.)
They were pretty well off when they had a significant portion of the walrus trade, too.
Of course then Iceland was discovered and the Norse got undercut by cheap foreign walrus ivory.
Still makes it one of Europe’s poorest countries at the time. Don’t forget that it is a relatively large country, 60% bigger than the UK and slightly larger than Germany if you include Svalbard and Jan mayen, with a small population, about 5.5M now. In such circumstances major infrastructure projects like roads and railways put a higher burden on people than they do in more populous state with similar GDP per capita.
On the other hand it should also be pointed out that the Norwegian welfare state was instituted long before the oil was found; the beginning of the Social Insurance system dates from 1894, compulsory sick insurance from 1909.
The article wasn’t clear on that. The best reason I saw was,
Norges Bank is currently looking for a company that it considers to be overpaying executives, and will then use that firm as an example in a report to outline the fund's position on pay.
Emphasis is mine. So maybe Norges Bank doesn’t like executive pay to be so high because they think executives should never have to pay a tax rate that high? I kid, of course, but their specific reasons aren’t so clear.
Historically, The Netherlands were also one of the poorest countries in Europe.
It’s a trifle surprising that it took this long and doesn’t happen more often. It’s more or less routine for The Shareholders to conclude that employees are overpaid. That’s why layoffs and outsourcing are a standard tactic for giving the stock price a quick shot in the arm.
It’s more typical to focus on the little people, of course; but given the size of executive compensation packages; they are a logical source of savings.
But The Shareholders are often represented by investment companies. Managed by executives with huge compensation packages.
Surely those executives could still hold a belief that executives in other industries are a bunch of worthless, lazy, entitled slackers who were too incompetent to become investment management executives and should therefore be ground into shareholder value?
Or is it, in an irony likely to draw only rueful appreciation from Marxists, the owners of the instruments of production who have developed a class consciousness?
not a class in Marx’ sense, but I’m sure that the top executives know each other and see them as peers - if only because they see them all the time in different boards of directors
Yes, but’s that like saying that Switzerland is “poorer” than India, or that Singapore is “poorer” than the Philippines. In one particular sense, it’s true. But that’s probably not the most common meaning of “poor country” versus “rich country”.
(And, as you point out, the welfare system was built up prior to the start of oil production; the OP’s suggestion that Norway “used the returns to pay for an extensive welfare state” isn’t really true.)
While it’s interesting, I think it’s probably part of a broader movement in which hedge funds and others have had what has been a terrible first quarter. Part of the problem with these funds is that rewards to the people running it - the two-and-twenty - seems incredibly high if you’re not getting massive returns.
The easiest way to save money (gain more for Norwegian retirees) is to reduce costs.
Norway also has a problem with oil cash, of course, given low prices and the fact that the North Sea is being particularly hard hit, given its high production costs.
Canadians look on with awe and envy at that wealth fund, then back at our giant unfunded environmental disaster and the negligible lasting economic benefits it brought, and we wonder if we couldn’t learn a thing or two from the Norwegians.
But there are so few people who can run a big company, about 1 in 1000 people can do it… So that means that in the USA 300,000 people could compete for the top positions in the fortune 500 companies, that means 6000 potential qualified candidates for each job, Maybe if we really opened these jobs for real competition the salaries would drop to the million dollar range. in the 1980’s I ran a $2,000,000,000 project on a short fuse(18 months) for my $30,000 salary has changed my view on how many people could actually run these companies.