Norway’s sovereign wealth fund will vote to back Bayer management

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The so-called ‘Chempark’, the main factory and headquarters of German pharmaceutical and chemical maker Bayer AG is pictured along the river Rhine in Leverkusen, Germany April 27, 2020. REUTERS/Wolfgang Rattay

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OSLO, April 24 (Reuters) – Norway’s $1.3 trillion fund will vote next week to back the senior management of German drug and agricultural maker Bayer AG (BAYGn.DE), but will vote against CEO pay Werner Baumann, he said. on Sunday.

Shareholders will vote on April 29 at Bayer’s annual general meeting on whether to ratify the conduct of board business in 2021, a standard procedure at German general meetings.

The Norwegian fund held 2.27% of Bayer shares at the end of 2021, valued at $1.19 billion, making it the fifth largest shareholder in the company according to Refinitiv data.

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“The board is responsible for attracting the right CEO and setting appropriate compensation,” Norges Bank Investment Management (NBIM), which manages the fund, said in a statement.

He cited the need for a “substantial proportion of annual compensation” to be provided in the form of shares locked in for five to 10 years, transparency to avoid “unacceptable results” and that all benefits must have a clear business justification .

Although the AGM vote is largely nominal, with no bearing on management responsibility or tenure, it is nonetheless considered a key indicator of investor sentiment.

Baumann, whose contract as CEO runs until 2024, is under pressure to increase the return on investment that has lagged that of rivals following the $63 billion takeover of agribusiness Monsanto in 2018. read more

Bayer shares fell in the months after the acquisition when jurors found Monsanto liable in several U.S. lawsuits for failing to warn of alleged cancer risks linked to its Roundup weedkiller.

The Norwegian fund joined the majority of shareholders at the 2019 AGM in reprimanding Bayer management, but nonetheless backed Baumann and his team for the next two years.

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Reporting by Terje Solsvik, editing by Gwladys Fouche and Emelia Sithole-Matarise

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