May 20, 2022
Werner Baumann, CEO of Bayer AG

Norway’s $1.3 trillion sovereign wealth fund will vote in favor of measures to support top management at German pharmaceutical giant Bayer AG next week, but will vote against CEO Werner Baumann’s remuneration package, it announced.

Shareholders will vote on whether or not to ratify the executive board’s business conduct for 2021 on April 29th at Bayer’s annual general meeting, a standard practice at German AGMs.

The Norwegian fund was the company’s fifth largest shareholder at the end of 2021, owning 2.27% of Bayer’s shares at a value of $1.19 billion.

“The board is responsible for attracting the right CEO and setting appropriate remuneration,” said Norges Bank Investment Management, which operates the fund.

It voiced the need for a “substantial proportion of annual remuneration” to be provided with shares locked in for between five and ten years, as well as transparency to avoid “unacceptable outcomes”.

The AGM vote is largely symbolic as it has no impact on the tenure of any member of the management team, it is a relevant gauge of investor sentiment.

Baumann, who has held the role of CEO since 2016, has found himself under mounting pressure, with the company underperforming its rivals.

Baumann also oversaw the acquisition of Monsanto in 2018, shortly prior to successful lawsuits against the agri business that sent Bayer shares tumbling.