Three issues that have dominated this year’s general meeting season – what we voted against

Remuneration of executive personnel and board composition were key issues this general meeting season. In total, we have voted against 77 board proposals this spring.
Annie Bersagel 2023 Jarle Nyttingnes
Annie Bersagel. Photo: Jarle Nyttingnes

The general meeting is an important arena for shareholders, and we vote in all companies where we are invested – both in Norway and in the Nordic region. 

Remuneration schemes of an unreasonable scope and without a maximum ceiling 

In the Norwegian market, we primarily voted against remuneration schemes for executive personnel. 

‘The most common reason why we vote against such schemes are their unreasonable scope, as they lack a maximum ceiling,’ says Folketrygdfondet’s Annie Bersagel.

At several of the general meetings, we also voted against authorisations to issue shares. These authorisations were mainly associated with share-based incentive schemes, where we have voted against the scheme. As a rule, it is positive that employees and board members own shares in the company as it motivates long-term value creation.  

In the cases we voted against, however, the incentive schemes did not have a maximum ceiling, which could lead to an unreasonable transfer of value from shareholders to executive personnel in the company. 

In our view, board members should not be covered by incentive-based schemes. This also follows from the Norwegian Code of Practice for Corporate Governance. It is unfortunate for a board to manage an incentive scheme they participate in themselves.  

CEOs on boards remain a challenge in the Nordic region  

We have also been active at general meetings in our neighbouring Nordic countries. The majority of the items we voted against here were related to the fact that the CEO also sits on the company’s board of directors. This is particularly widespread in Sweden, according to Bersagel.  

‘The Swedish Code of Practice for Corporate Governance allows up to one member of the group management to sit on the board. We believe this is unfortunate, as one of the board’s main responsibilities is to supervise the management of the company.   

Therefore, we often vote against proposals for executive personnel to sit on boards. The board’s control function makes independence an important principle in terms of board composition.’ 

In Norway, members of the group management of ASA-registered companies are not allowed to sit on the board. Companies registered in Luxembourg, for example, can do so without breaking the law, but will then violate the recommendations made by the Norwegian Corporate Governance Board (NUES).  

In our voting rationale, you can read our grounds for voting in each individual case.