New figures issued in March 2001 by Norway's Technical Calculating Committee on Wage Settlements show that management salaries continue to rise. Top managers in large companies saw average pay increases of 27.7% from 1999 to 2000. Many commentators believe that increases in management salaries may contribute to undermining the Norwegian policy of pay moderation.
New figures made public by the Technical Calculating Committee on Wage Settlements (Teknisk beregningsutvalg, TBU) on 29 March 2001 show that management salaries continue to rise, despite calls for moderation from most quarters of Norwegian working life. The principle of wage moderation is an important element of Norwegian incomes policy (NO0012117F), but has in recent years come under threat from a series of wage settlements generating substantial wage growth among ordinary workers (NO9902116F). The issue of management salaries has also been drawn into the debate and many believe that the moderation principle should also be made applicable to top management in Norwegian companies.
The TBU comprises representatives from all the main trade union confederations and employers' organisations, along with representatives from Statistics Norway, the Ministry of Finance and the Ministry of Labour and Government Administration.
The new figures from the TBU show that management in large Norwegian companies (those with 250 employees or more) experienced an average salary increases of 16.4% from 1999 to 2000. However, a substantial share of this growth arose from a handful of top managers who between them enjoyed an average salary increase of 27.7% over the year. The TBU figures include all types of compensation, including stock options and payment in kind. Most other managers in smaller firms witnessed relatively modest increases in the same period, of between 4.2% for managers in enterprises with 25-49 employees and 6.6% for those in enterprises with 100-249 employees. This compares with average wage growth of 4.5% among ordinary wage earners in the same period. The pay growth figures for 1997-8 were 18.1% for all managers and 6.2% for average wage earners, and for 1998-9 they were 16.5% and 4.9% respectively. Over the whole period from 1995 to 2000, the average pay growth was 26.8% for all employees, but 84% for top management.
The new TBU figures also show that there are relatively few women in management positions in large Norwegian companies, and that the average salary level of female managers is approximately 68% of that of male managers. Furthermore, the average salary growth was also much lower among female managers than among male managers.
The issue of management salaries is a source of significant controversy in Norway (NO9711137N). Increasing management pay was given as one of the reasons for the rejection in a ballot of union members of the initial proposal for new collective agreements between the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) in the 2000 bargaining round (NO0004188F). New agreements had to be negotiated allowing for higher wage increases among ordinary wage earners (NO0005192F).
The employers also recognise the problems posed by increasing management salaries in the contemporary incomes policy climate in Norway. NHO has developed guidelines for its member companies concerning the remuneration of top management. Openness and the need to justify management remuneration sufficiently is emphasised in these guidelines, but NHO also expresses scepticism with regard to the increased use of so-called "golden handshakes" for management at all levels. Such arrangements should be a prerogative of top management only, says NHO, since these employees are not subject to the same protection as ordinary workers and lower management. Similarly, in April 2001 the Ministry of Trade and Industry issued a proposal for new guidelines on management salaries in public enterprises, although these are not applicable to managers in semi-public enterprises. An important motive behind the Ministry's proposal is to make management salaries in the public sector competitive but not to have a knock-on effect in private enterprises.