Statement on the setting of salaries and other remuneration to senior employees
In setting salaries and other remuneration for senior employees, Norfund complies with “Government guidelines for executive salaries in companies in which the state has an ownership interest”, laid down by the Norwegian Ministry of Trade, Industry and Fisheries on 12 December 2022. These form the basis for the preparation of the Board of Directors’ statement for 2024.
Guidelines for Norfund on the setting of salaries and other remuneration in 2024
The following guidelines apply to the setting of salaries for senior Norfund employees up to the ordinary General Meeting in 2025:
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.
Norfund considers that other government funds such as the National Insurance Scheme Fund, EksFin (Export Finance Norway) and Investinor form relevant benchmarks.
Setting of salaries
The Board sets the salary of the managing director. The managing director sets the salaries 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 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 management team 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.
Pension and insurance conditions
Norfund has both a defined contribution plan and a defined benefit plan. In 2018 Norfund closed its defined benefit pension scheme to new employees, and the transition to the new scheme was voluntary for existing employees. Employees who have been taken on since then are only offered the defined contribution plan.
Norfund has both funded and unfunded pensions and payment obligations in the defined benefit pension plan. All essential funded and unfunded plans are included in the company’s actuarial settlement. As at 31.12.2024 the defined benefit scheme has a total of 25 active members. The defined benefit scheme entitles the individual to defined future benefits and depends primarily on the number of years of service, pay level on reaching retirement age and the size of National Insurance benefits. Agreements entered into prior to 2018 exceed the current guidelines for senior executive salaries, as the previous scheme entailed a full service 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. In the unfunded scheme, rights are earned 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 12G with a retirement age of 67 and a full service 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. As at 31.12.2024, the unfunded scheme has 3 active members.
In the defined contribution scheme, 7% of salary is set aside from pay from 0–7.0 G, and 20% from salaries of 7.1–12 G. The costs of both schemes are included in the calculation of pension expenses. As at 31.12.2024, 86 employees are covered by the defined contribution plan.
Senior Norfund employees are covered by insurance schemes that apply to all Norfund employees.
| Wages, salaries and other payroll expenses | ||
|---|---|---|
| (Figures in 1000s of NOK) | 2024 | 2023 |
| Wages and salaries | 170,975 | 150,561 |
| Employer's social security contribution | 30,977 | 27,965 |
| Pension expenses | 24,357 | 23,008 |
| Other benefits | 19,785 | 17,042 |
| Total wages, salaries and other payroll expenses | 246,094 | 218,575 |
| Remuneration for the management 2024 | ||||||
|---|---|---|---|---|---|---|
| Title | Salary | Bonuses | Insurance and other payments in kind | Pension | Total | |
| Jan Tellef Thorleifsson | CEO | 3,299,051 | 0 | 22,945 | 239,428 | 3,561,425 |
| Ylva Lindberg | EVP Strategy & Communication | 2,149,706 | 50 000 | 31,511 | 245,502 | 2,426,719 |
| Fride Andrea Hærem | EVP CFO | 2,148,375 | 50 000 | 27,243 | 248,468 | 2,424,086 |
| Thomas Fjeld Heltne | EVP Legal | 2,147,534 | 50 000 | 26,629 | 236,106 | 2,410,269 |
| Erik Sandersen | EVP Financial Inclusion | 2,360,432 | 50 000 | 33,383 | 538,973 | 2,932,788 |
| Mark Davis | EVP Renewable Energy | 2,458,796 | 50 000 | 33,383 | 1,263,324 | 3,755,503 |
| Ellen C. Rasmussen | EVP Scalable Enterprises | 2,360,291 | 50 000 | 22,945 | 247,868 | 2,631,104 |
| Remuneration for the management 2023 | ||||||
|---|---|---|---|---|---|---|
| Title | Salary | Bonuses* | Insurance and other payments in kind | Pension | Total | |
| Jan Tellef Thorleifsson | CEO | 3 191 303 | 0 | 20 067 | 225 387 | 3 436 757 |
| Ylva Lindberg | EVP Strategy & Communication | 2 019 038 | 0 | 87 867 | 230 055 | 2 336 959 |
| Fride Andrea Hærem | EVP CFRO | 2 019 038 | 0 | 29 411 | 234 095 | 2 282 544 |
| Thomas Fjeld Heltne | EVP Legal | 2 019 038 | 0 | 22 403 | 221 709 | 2 263 149 |
| Erik Sandersen | EVP Financial Inclusion | 2 122 312 | 0 | 63 450 | 517 607 | 2 703 369 |
| Mark Davis | EVP Renewable Energy | 2 309 012 | 0 | 46 347 | 1 317 000 | 3 672 359 |
| Ellen C. Rasmussen | EVP Scalable Enterprises | 2 122 302 | 0 | 39 923 | 233 716 | 2 395 940 |
A separate Executive Pay Statement has been prepared which contains more details on pay for senior employees.
Remuneration to Norfund’s Board of Directors
“Norfund’s Board of Directors consisted in 2024 of the Chair and eight Board members, two of whom were elected by the employees.
In 2024 the General Meeting set remuneration for the Chair at NOK 324 000 (NOK 308 000 in 2023), while remuneration for the Board members was fixed at NOK 162 000. Representatives elected by the employees do not receive compensation. In 2024 the General Meeting set remuneration for the chair of the Risk and Audit Committee at NOK 88 000 and for the members of the committee at NOK 76 000. “
Bonuses
The company has no share or option schemes for its employees, and there are no plans for such schemes. Senior executives do not have a right to a bonus.
Of the other employees, 106 of a total of 138 employees with a right to a bonus received a bonus for 2024. The highest total bonus award in 2024 was NOK 100 000.
The bonus scheme accounted for 2.6% of Norfund’s payroll expenses, a total of NOK 4 416 000. Bonuses are awarded to employees who have presented outstanding performances and behaviour, either individually or as a team.
Number of permanent employees
The company has 157 employees at the end of 2024 (144 in 2023), of whom 149 in permanent positions (134 in 2023). The number of full-time equivalents at year-end was 150 (139).
Pensions at regional offices
In addition to the pension plans for employees in Norway described above, 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 2024, NOK 5 796 000 (NOK 2 322 000 in 2023) was expensed in connection with these schemes.
| Financial assumptions defined benefit pension | ||
|---|---|---|
| 2024 | 2023 | |
| Discount rate | 3.90% | 3.10% |
| Expected return on plan assets | 3.90% | 3.10% |
| Salary adjustment | 4.00% | 3.50% |
| Pension adjustment | 3.75% | 3.25% |
| Adjustment of the basic amount (G) in the National Insurance System | 3.75% | 3.25% |
| Turnover | 9.00% | 9.00% |
| Employer's social security contribution | 19.10% | 19.10% |
| Calculated net pension expenses | ||
|---|---|---|
| (Figures in 1000s of NOK) | 2024 | 2023 |
| Net present value of pension earned in the period | 10,037 | 9 997 |
| Capital cost of previously earned pensions | 5,272 | 4 678 |
| Expected return on plan assets | -3,828 | -3 371 |
| Administrative costs | 93 | 92 |
| Accrued employer’s social security contribution* | 2,211 | 2,177 |
| Net pension expenses for the year incl. employer’s contribution | 13,784 | 13,573 |
1 Employer’s social security contribution is calculated on the amount paid in. | ||
| Estimated pension obligations | |||
|---|---|---|---|
| (in 1000s of NOK) | Funded | Unfunded | 2024 |
| Estimated pension obligations | 138,962 | 21,715 | 160,677 |
| Estimated plan assets* | 120,760 | 0 | 120,760 |
| Net pension obligations 31.12. | 18,202 | 21,715 | 39,917 |
| Accrued employer’s social security contribution** | 3,477 | 4,148 | 7,624 |
| Net pension obligations 31.12. | 21,679 | 25,863 | 47,541 |
* Estimated plan assets consist of paid premiums invested in Nordea Life & Pension. | |||
| Reconciliation opening/closing balance | ||
|---|---|---|
| (in 1000s of NOK) | 2024 | 2023 |
| Carrying amount net pension obligations 01.01 incl. employer's social security contribution | 58,935 | 59,951 |
| Net pension expenses for the year incl. employers social security contribution | 13,784 | 13,573 |
| Actuarial gain/loss charged directly to equity | -12,452 | 2,419 |
| Pensions paid, early retirement / unfunded, incl. employer’s social security contribution | -2,701 | -1,492 |
| Payments into the pension plan etc., incl. employer's social security contribution | -10,025 | -15,517 |
| Carrying value net pension obligations 31.12 incl. employer's social security contribution | 47,541 | 58,935 |
| Investment of plan assets | ||
|---|---|---|
| Nordea Life's asset mix* | 30.09.2024 | 30.09.2023 |
| Property | 11.2 % | 12.5 % |
| Equities | 11.9 % | 11.5 % |
| Bonds at amortised cost | 72.8 % | 72.3 % |
| Short-term bonds/certificates | 4.0 % | 3.6 % |
| Other | 0.1 % | 0.1 % |
| Total financial assets | 100% | 100% |
* Known values as at calculation date | ||
Norfund has made payments into a separate fund intended to meet future obligations related to the unfunded scheme, the carrying value of which was NOK 28.4 million at 31.12.2024.
Accounting principles
“Pay” covers all types of remuneration to own employees and is expensed as it is earned. Ordinary pay may be both fixed pay and hourly pay and is recorded as and when it is earned or disbursed. Holiday pay is earned on the basis of ordinary pay and is normally disbursed in the holiday months the following year. Bonuses are paid on the basis of criteria for the current year as explained above. Employer’s social security contribution is calculated and expensed for all pay-related expenses and is normally paid in arrears every second month. Norfund also pays current social taxes as they are incurred for employees at regional offices.
Pension obligations are calculated on a straight-line earnings basis, taking into account assumptions regarding years of service, discount rate, future return on plan assets, future changes in pay, pensions and National Insurance benefits, and actuarial assumptions regarding mortality, voluntary retirement etc. The chosen principle is the IAS 19R option of Norwegian Accounting Standard 6 (NRS 6), with unamortized actuarial losses over equity.
Plan assets are stated at fair market value. Net pension obligation comprises gross pension obligation less the fair value of plan assets. Net pension obligations from underfunded pension plans are included on the balance sheet as a provision, while net plan assets in overfunded schemes are included as long-term interest-free receivables if it is likely that the overfunding can be utilized. Employer’s social security contribution is based on net plan assets.
The effect of changes in pension plans with retroactive effect not conditional on future earnings is defined as an actuarial gain or loss and charged directly to the company’s equity.
Net pension expenses, which consist of gross pension expenses less estimated return on plan assets, are classified as an ordinary operating expense and presented together with payroll expenses. Employer’s social security contribution is calculated on contributions paid to the pension plans.