Lucrative board fees have created attention around the battery company Freyr. Lønnsfesten has provoked many, and the matter has been discussed both in the Storting and in news’s Debate. This is happening at the same time as the company has received just under NOK 200 million in state aid in Norway. In addition, the state-owned company Eksfin has promised NOK 4 billion in loan guarantees, if the company manages to raise private capital. Chairman Tom Einar Jensen defended the payments in this way when he was a guest on Debate last week: – We have board compensation that is comparable to companies that are natural to compare us to in New York. But is that right? No, says investment director at Nordea, Robert Næss. The board received millions in remuneration Næss says that only the few top managers in the US have very high salaries – on paper. – Elon Musk works for Tesla for free if we only look at the official salary. But, at the same time, he has an overall package that probably makes him the world’s best-paid CEO. Therefore, Næss has looked at what the companies themselves have reported to the American Financial Supervisory Authority (SEC). Let’s first look at how much the board members of Freyr receive in remuneration. In Freyr’s annual report for 2022, it is listed how much the company’s board members have been paid, both in pure salary and in share options. Photo: Screen dump Freyr annual report Board positions are often remunerated in various ways, but mainly through fees (salary paid) and shares. In Freyr, each board member receives a fee of USD 100.00. This corresponds to around NOK 1 million at today’s exchange rate. In addition, stock options are added. Here, most of the board members received share options of approximately USD 363,000. It is just under NOK 4 million. On average, each board member, including then chairman Torstein Dale Sjøtveit, received 636,000 dollars – or 6.8 million kroner. But how does Freyr compare to other companies on Wall Street? Apple The world’s largest company measured by value Produces consumer technology such as mobile phones, computers, tablets, smartwatches and other services Has around 154,000 employees Turnover for 394 billion dollars in 2022 Board remuneration: 100,000 in fees, and shares worth 250,000 dollars Microsoft The world’s second largest company measured by value Makes software, consumer electronics, computers and other related services Has around 181,000 employees Turnover of $211 billion in 2022 Board remuneration: $125,000 fee, in addition to shares worth $217,500 Alphabet The parent company of Google The world’s third largest company by value Google provides a range of services, from advertising, mobile phones, smart speakers, cloud storage , search engine and software Has approximately 190,000 employees Turnover of $282 billion in 2022 Board compensation: $75,000 for members and $100,000 for the chairman Adobe Makes software for both consumers and professionals, and has both Photoshop (image editing), Premiere Pro (video editing) and After Effects (film effects) among its products Has around 26,000 employees Had a turnover of 17.5 billion dollars in 2022 Board remuneration: 60,000 dollars in fees Berkshire Hathaway One of the world’s largest holding companies Has assets in a number of large companies including Geico (insurance), Kraft Heinz (food products), American Express (payment solutions) . digitally. In 2022, the board members ended up with $3,800 on average. – Has taken the party far in advance – Freyr is above this level. Most of the board members received a fee of USD 100,000 and in addition share options to a value of USD 363,000, says Robert Næss. Europe’s largest company, the pharmaceutical company Novo Nordisk, has five times the market value of Equinor. They paid the board an average of 220,000 dollars. That’s a third of what Freyr paid its board members. Robert Næss is investment director at Nordea. Photo: Nordea – What is also interesting is that the solid board packages came before the company had accomplished anything. They had succeeded in raising money from the capital market, but they had not yet demonstrated that they could produce batteries in an efficient manner. And; they haven’t landed any big customer deals either, Næss continues and adds: – It might seem as if they’ve started the party far in advance. news has asked Freyr questions about which companies they believe are comparable when it comes to board remuneration. On Thursday, Freyr’s communications director Hilde Rønningsen replied that the company was working on an answer. Since then, Freyr has not responded to news’s inquiries. Price falls have affected the options In the debate, Jensen said that the overall figures for board compensation were not entirely precise. This is due, among other things, to Freyr’s share price having fallen by almost 78 per cent so far in 2023. – It is important to say that the total figures for board compensation, with today’s share price, the value of those options is close to zero, and the total sum is 70 percent lower than what is outlined. The Freyr logo adorned the New York Stock Exchange on Wall Street when the company was listed on the stock exchange in the summer of 2021. Photo: AP Asked the minister for industry about wages Freyr’s wage level was also a topic in the Storting on Thursday. Geir Jørgensen (Rødt) wanted to know what wage requirements Minister of Industry and Trade Jan Christian Vestre (Ap) had set as a prerequisite for receiving public support. – The question for the minister is what have you done to secure the public investments that have been made? Isn’t there a requirement that the companies deliver when they have received so much support? Geir Jørgensen in Rødt wanted to know what the Minister for Business and Industry Vestre had set about the requirements for companies that have received public support. Photo: Stortinget It was a question Vestre understood was being asked. He said that the public support schemes, whether through Innovation Norway, Enova or others, set requirements for what the financial support should go to. Vestre, on the other hand, was not a supporter of detailed management of pay levels in private companies. – It could have contributed to completely wrong consequences and completely wrong results. We could also risk that projects that we want for Norway will not be realized in Norway, but in other countries because the uncertainty will be too great. Industry Minister Jan Christian Vestre (Ap) believes that the public sector cannot control salary and bonus levels in private companies in detail, even if they have received public support. Photo: Eskil Wie Furunes On the other hand, he made a call to companies that have received public support, such as Freyr has. – Each individual company should think about its own reputation, look within itself and see if it benefits them that questions are raised about what the tax money is used for.
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The Freyr boss said board fees were not salary-leading – paying more than Apple, Microsoft and Google – news Nordland
