(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
[3. August 2007] After it became known that 35 Hydro executives had been paid incredible 210 million for the termination of option agreements, the debate has raged in the Norwegian public. It is a sign of health, for the conduct of the board in this matter is not illegal, so at least both loyal and immoral. The chiefs with Eivind Reiten in the lead have received up to NOK 27,8 million in individual compensation because the Government will liquidate their generous option agreements. The signals from the government quarter have been crystal clear: option agreements do not belong in state-owned enterprises.
Legitimacy wears off quickly when public-sector executives make tens of millions in profits, as Yara's leadership did as late as last week. The politicians' desire to run the option programs is a clear message to the companies' boards to keep the managers' rewards at a predictable and sober level. Hydro's chairman Jan Reinås chose to ignore this message.
The Hydro bosses basically have a ridiculously high salary. We agree with Finance Minister Kristin Halvorsen, who has said that no one should have a higher salary than the Prime Minister. No one deserves or needs an annual salary of many millions of NOK. Now she and the Government should show that they are serious. The Soria Moria Declaration's ambitions of active state ownership are worth little if the owner State does not care about the cost level in own companies.
An examination will show whether the agreements are unlawful. This review is what few people trust. That in itself is an argument for making it thorough and open. The preliminary trend is a farce where the Minister of Trade, the Ministry and the Board of Hydro throw responsibility from one to the other like a ball that nobody wants to play with.
But the real scandal in the Hydro board's option party is neither the level of salaries nor the compensation. That is the way the decision is made. As chairman of the board, Jan Reinås has a clear mandate to follow signals from Hydro's largest owner. Regardless of the duty to provide information, he has run through a case he should have been the subject of political discussion. He has not only chosen to ignore the government's signals, but also to oppose them, by paying compensation that far exceeds the limits of reasonableness. That Reiten and the other bosses receive with open arms is understandable, but both greedy and unwise. Now the Government must decide where the responsibility lies and clean up. It is the State's money they are playing with, it is the people's money.
