Minister of Industry criticizes controversial bonuses in Norwegian: “Poor judgment”

Jacob Schram - Geir KarlsenPhoto: Terje Bendiksby / NTB
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The Minister of Trade and Industry has received Norwegian’s report on the bonuses. “The board has a big job to explain this and rebuild the reputation,” Iselin Nybø said.

“It is unsympathetic to employees, customers, shareholders, and creditors who have stood up for Norwegian. It shows poor judgment. The board and CEO Geir Karlsen have a big job ahead of them in explaining this and rebuilding Norwegian’s reputation,” Minister of Trade and Industry Iselin Nybø (V) said on Tuesday.

She has now received a reply to the letter she sent to Norwegian last week in which she asked for an explanation from the company regarding the bonus payments to top officials Jacob Schram and Geir Karlsen.

The bonuses amounted to NOK 11 million for each of the two and were meant to ensure that the managers do not resign while the company was under reconstruction. 

In addition, bonuses of NOK 8 million to other management officials were paid out. In total, the sum reaches NOK 30 million. These bonuses are in addition to other bonuses and were decided by the previous board, which was replaced on June 4.

Norwegian denies violating state loan terms

Last year, as a prerequisite for government support to the company, which had major financial problems at the time (in the form of a government-guaranteed loan), Nybø banned bonus payments in Norwegian. According to the government, this deadline expired on May 26 this year.

Norwegian used the law firm BAHR to respond to the letter from the minister. In the letter dated June 27, lawyer Richard Sjøqvist wrote that Norwegian had not violated the government loan conditions in connection with the payment of the so-called retention bonuses.

“The state as a lender has not borne the costs of the retention bonuses. The reconstruction was completed, and new share capital was raised in May 2021, and in the end, it is the company’s shareholders who will bear the costs and not the company’s creditors,” the letter stated.

“Poor judgment”

Nybø is very disappointed that Norwegian granted large bonuses, noting that Norwegian survived as a company due to corona support from the state.

“In the spring of 2020, Norwegian gained access to NOK 3 billion. In November of the same year, the company asked for additional billions. When the opposition was ready to throw in more billions at a company in deep debt, the government said no. This was crucial to bring about a much-needed restructuring. When Norwegian was on its way out of the restructuring process, the state agreed to contribute. The sum of all this contributed to Norwegian surviving as a company,” Nybø explained.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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