CEO Pay in Sweden

I don’t read a ton of business news, but somehow this story caught my eye: “The British oil giant, BP, on Thursday named the chief executive of the Swedish telecommunication company Ericsson as its new chairman in a surprise move to help the company control costs.”

One tactic the man in question, Carl-Henric Svanberg, may want to consider is moving toward a more Swedish-style model of executive compensation. As I’ve noted before, corporate nationality appears to matter a great deal when it comes to executive compensation. Companies are typically helmed by CEOs from the country in which they’re based, even though firms like Ericsson and BP are totally globalized in their operations, and then nationality makes a difference in pay. American CEOs get paid more than British CEOs who get paid more than continental or Japanese CEOs. You see the same pattern here, where for his labors at Ericsson last year, Svanberg earned 20,423,391 Swedish kroner which comes out to be a bit more than $2.5 million. Ericsson is 289 on the Forbes 500 list. One slot down is Hindustan Petroleum, who’s the founder of the company and pays himself a very modest $200,000 a year. Then at 300 on the list you get to Aetna whose CEO Ronald Williams took home $38.12 million last year. That’s over fifteen times Svanberg’s compensation in Sweden.

Obviously, for any given pair of firms you can explain this kind of discrepancy away, but you really do see the pattern over and over and over again in a way that’s hard to explain as anything other than corporate nationality being a key difference-maker. Leif Johansson, CEO of Volvo, Sweden’s largest firm, makes even less—15.7 million kroner.