Statement on the setting of salaries and other remuneration for senior employees
Norfund complies with the government guidelines laid down on 13 February 2015 with respect to the setting of salaries and other remuneration for senior employees. These are based on changes published in the white paper A diverse and value-creating ownership. “The State’s guidelines for remuneration for senior executives in companies with state ownership” (St. meld. 27 (2013-2014)). The changes were adopted with effect from 30 April 2021, will be submitted to the General Meeting in 2022 and form the basis for the preparation of the Board of Directors’ statement for 2021.
Guidelines for Norfund on the setting of salaries and other remuneration in 2021
The following guidelines apply to the setting of salaries for senior Norfund employees until the ordinary General Meeting in 2022.
The remuneration system is designed to attract and retain competent personnel. In setting salaries, emphasis is placed on the individual’s contribution to fulfilling Norfund’s mandate.
Norfund wishes to promote moderation in executive salaries. The aim in setting salaries is that senior Norfund employees should have pay conditions that are competitive, but not at the top end of the scale, to ensure that Norfund secures and retains sufficient expertise in the Fund.
Norfund considers that other government funds such as the National Insurance Scheme Fund, Export Credit Norway and Investinor form a relevant benchmark.
Setting of salaries
The Board sets the salary of the managing director. The managing director sets the salaries and bonuses of the corporate heads of department who report to him, after executive salary conditions have been endorsed by the Board. This group consists of senior Fund employees. Norfund’s pay conditions for senior employees consist of fixed salary, pension and insurance schemes and other benefits that cover newspapers, electronic communications etc. The fixed salary is subject to regulation in line with pay developments in the financial sector, represented by reference figures from Finance Norway, the results of the main settlement and for the companies Norfund has defined as its peers, and an assessment of the individual’s performance and goal achievement. The managing director sets annual goals for the individual member of the executive group and the Board sets goals for the managing director.
Senior employees have three months notice of termination. The CEO has an agreement for pay after termination of employment equivalent to 6 months’ salary. This arrangement is in line with the guidelines for salary and other remuneration.
Norfund has a bonus scheme that covers all company employees except the managing director. The bonus scheme is in line with the guidelines’ requirement of variable pay.
Bonus candidates are proposed by an individual’s line manager for an overall assessment by the management team. Bonuses awarded to both senior and other employees are fixed by the managing director. Bonuses are awarded once or twice a year, and individual bonuses vary from NOK 10 000 to NOK 100 000 per award, with NOK 100 000 as the maximum amount per year.
Pension and insurance conditions
In 2018 Norfund closed its defined benefit pension scheme to new employees, and now offers a defined contribution scheme to all company employees, including managers. The transition to the new scheme was voluntary for existing employees. This means that Norfund has both a defined benefit and a defined contribution scheme for agreements entered into before the closure of the former in 2018. The defined benefit scheme entitles the individual to defined future benefits and depends primarily on the number of qualifying years, pay level on reaching retirement age and size of National Insurance benefits. Agreements entered into prior to 2018 exceed the current guidelines for senior executives, as the previous scheme entailed a full qualifying period of 30 years and pension payments of 70% of salaries up to 12 G The pension scheme satisfies the requirements of the Act on Mandatory Occupational Pensions. There are currently 47 employees covered by the defined contribution scheme and 30 by the defined benefit scheme. Norfund also has a scheme which entitles employees to pension rights for pay in excess of 12 G. This scheme was closed to new members in 2012. The scheme, which is funded from operations, consists of 66% of pay in excess of 12 G with a retirement age of 67 and a full qualification period of 30 years in the calculation base. If the service period is calculated as being less than 30 years, the pension is reduced proportionately. On termination of employment or on reaching retirement age, employees receive a settlement for the value of the amount saved. This scheme currently covers 4 employees. In the defined contribution scheme, 7% of salary is set aside from pay from 0–7 G, and 20% from salaries of 7.1–12 G. The costs of both schemes are included in the calculation of pension expenses.
Senior Norfund employees are covered by insurance schemes that apply to all Norfund employees.
Review of the financial statements 2021
Salary policy in the 2021 accounting year has adhered to the principles of the Management Salary Statement as adopted by the General Meeting on 24 June 2020 and 21 June 2021. Salary adjustment for the CEO and other members of management in 2021 was 3.5% on average. The total pay adjustment in 2021 for the management team, including the CEO, amounted to NOK 547 050.
|Wages, salaries and other payroll expenses||Norfund|
|(In 1000s of NOK)||2021||2020|
|Wages and salaries||106 928||91 451|
|Employer's social security||19 818||16 334|
|Pension expenses||18 330||14 694|
|Other benefits||13 065||12 795|
|Total wages, salaries and other payroll expenses||158 142||135 273|
|Pay for Senior Employees|
|Title||Salary||Bonus||Insurance and other payment in kind||Pension||Total|
|Jan Tellef Thorleifsson||CEO||2 954 288||0||20 305||203 367||3 177 961|
|Ylva Lindberg||EVP Strategy & Analysis||1 708 654||50 000||19 880||198 484||1 977 018|
|Cathrine Kaasen Conradi||EVP CFRO until 30.11.||1 703 836||50 000||23 414||196 254||1 973 504|
|Fride Andrea Hærem||EVP CFRO from 01.12.||555 096||0||8 949||68 945||632 990|
|Thomas Fjeld Heltne||EVP Legal Department||1 705 421||50 000||20 038||197 925||1 973 384|
|Erik Sandersen||EVP Financial Institutions||1 926 602||50 000||19 795||366 865||2 363 262|
|Mark Davis||EVP Clean Energy||2 109 094||50 000||83 636||1 055 051||3 297 781|
|Ellen C. Rasmussen||EVP Scalable Enterprises||1 750 350||50 000||19 896||200 248||2 020 494|
|Olaug Svarva||Chair||285 000||0||0||0||285 000|
Salaries for senior employees are reported for the whole year, including the period when they were not senior employees.
Remuneration to Norfund’s Board of Directors
Norfund’s Board of Directors consisted in 2021 of the Chair and 8 Board members. In 2021 the General Meeting set remuneration to the Chair at NOK 285 000, while remuneration to the Board members, with the exception of the two employee representatives, was set at NOK 142 500. In 2021 the General Meeting set remuneration for the chair of the Risk and Audit Committee at NOK 77 000 and for the members of the committee at NOK 67 000.
The company has no share or option schemes for its employees, and there are no plans for such schemes.
The highest total bonus allocation in 2021 was NOK 100 000. The bonus scheme accounted for 2.6% of Norfund’s payroll expenses in 2021, a total of NOK 2 850 000. Bonuses are paid for extraordinary performance, and in 2021 the average payment to recipients of bonuses was NOK 23 554. The highest payment represented 7% of the individual’s salary. A number of employees, including some senior employees, were awarded a bonus in 2021. The awarding of bonuses was based on a strong performance during a demanding period marked by Covid and difficult working conditions. A record-high commitment level was achieved through the year, and a number of portfolio companies saw positive developments.
|(Figures in 1000s of NOK)||2021||2020|
|Other attestation services||0||0|
|Other services (including lawyer's services)||685||578|
|Total||1 312||1 199|
Auditor’s fee is inclusive of VAT.
In addition, business partners of Deloitte AS in other countries delivered other services expensed in the amount of NOK 1.6 million (4.6 million in 2020).
Number of permanent employees
The company had 111 (102) employees at the end of 2021. The number of full-time equivalents was 106 (100.5).
In addition to the employee pension plans described in the Executive Pay Statement, local employees at Norfund’s regional offices in South Africa, Ghana, Thailand, Kenya and Costa Rica have defined contribution pension plans. Norfund therefore has no obligations other than what has been paid through the year. In 2021, NOK 1 709 351 (1 943 140) was expensed in connection with these schemes.
|Expected return on plan assets||1.90%||1.70%|
|Adjustment of the basic amount (G) in the National Insurance System||2.50%||2.00%|
|Employer's social security contribution||19.10%||19.10%|
|(Figures in 1000s of NOK)||2021||2020|
|Net present value of pension earned in the period||9 948||7 529|
|Capital cost of previously earned pensions||2 202||2 070|
|Expected return on plan assets||-1 421||-1 737|
|Administrative costs||1 133||1 133|
|Accrued employer's social security contribution*||2 438||1 366|
|Net pension liabilities for the year incl. employer's||13 928||11 433|
*Employer’s social security contribution is calculated on the amount paid in.
|Estimated Pension Liabilities|
|Estimated pension liabilities||130 234||22 669||152 903|
|Estimated plan assets*||92 358||0||92 358|
|Net pension liabilities 31.12||37 876||22 669||60 545|
|Accrued employer's social security contribution**||7 234||4 330||11 564|
|Net pension liabilities 31.12||45 110||26 999||72 108|
*Estimated plan assets consist of paid premiums invested in Nordea Life.
|Reconcilliation Opening/Closing Balance|
|Carrying amount net pension liabilities 01.01 incl. employer's social security contribution||58 074||25 632|
|Net pension expenses for the year incl. employer's social security contribution||13 928||10 215|
|Actuarial gain/loss charged directly to equity||14 975||32 469|
|Pensions paid, early retirement / unfunded, incl. employer’s social security contribution||-1 916||-1 161|
|Investment in plan assets, etc., incl. employer’s social security contribution||-12 953||-9 082|
|Carrying amount net pension liabilities 31.12 incl. employer's social security contribution||72 108||58 074|
|Nordea Life's Asset Mix*|
|Bonds at amortised cost||12.7%||3.50%|
|Total financial assets||100.00%||100.00%|
* Known values at calculation date
Norfund has paid into a separate fund intended to meet future commitments related to the unfunded scheme, the book value of which was NOK 24.2 million as of 31.12.