By Gwladys Fouche and Terje Solsvik
OSLO (Reuters) - Norway's $915 billion sovereign wealth fund, the world's biggest, stepped up pressure on the companies it invests in with a call for them to be more transparent about taxes and to overhaul executive pay.
Norwegian lawmakers last year ordered the fund, which said on Friday it earned 298 billion Norwegian crowns ($34.6 billion) from its investments in the last quarter, to be more involved in global efforts to combat tax havens.
Norges Bank Investment Management, which invests the proceeds of Norway's vast offshore oil and gas production, said that public country-by-country tax reporting is a core element of transparency, taxes should be paid where economic value is generated and boards are responsible for tax arrangements.
Another hot corporate governance topic for investors is executive pay and NBIM said it backed calls for so-called long-term incentive plans (LTIPs) to be scrapped.
"For us long-term incentive plans should be removed from pay packages. The packages we want in the future are very different from what they are now. They are too complicated," CEO Yngve Slyngstad told reporters following its results.
With stakes in about 9,000 companies globally, owning on average 1.3 percent of all listed equities, the Norwegian fund is among the world's most influential investors which from time to time publishes "expectations documents" in a bid to influence corporate behavior.
"The purpose of these expectations is to express how Norges Bank Investment Management, as a financial investor, expects multinational enterprises to exhibit appropriate, prudent and transparent tax behavior," it said of Friday's document on tax.
The fund said in the first quarter it earned a return of 3.8 percent and beating its benchmark index by 0.1 percentage point. In the fourth quarter it booked a return of 2.17 percent.
"Measured in Norwegian crowns, this was the third best quarter in the history of the fund, driven by strong returns on the equity investments. In the last month, the total return exceeded the total inflow of the fund," Slyngstad said.
The government withdrew 23 billion Norwegian crowns during the first quarter to pay for public expenses at a time of declining oil and gas revenues, after pulling out a total of 101 billion crowns during 2016.
($1 = 8.6161 Norwegian crowns)