Incoming chief executive Nicolai Tangen has finalized a contentious employment contract with Norges Bank that seeks to distance the hedge fund founder from his old firm, the fund said Thursday.
Tangen is required to step down from all directorships from his former hedge fund, AKO Capital, which he founded 15 years ago in London, according to the contract. Tangen will start at Norges Bank in September.
The AKO board is expected to change its composition, so a majority of members will not have had close ties with Tangen.
A trustee will exercise Tangen’s voting rights, which will also be reduced to 43% and are not allowed to go to above 45%. All dividends from the period of his ownership will be donated to the hedge fund’s foundation.
“Tangen will have no influence on his fund investments for as long as he is employed by Norges Bank,” Øystein Olsen, governor of the executive board, said in a statement.
Additionally, his personal wealth will be managed by Gabler Investments under a discretionary mandate. A proxy will ensure that Tangen does not know what he is invested in.
The scandal swirling around the incoming chief executive started after Tangen was announced in March by Norges Bank to replace Yngve Slyngstad as its chief executive officer, who was resigning from the post after 12 years on the job.
The appointment was met with suspicion after Norwegian newspaper Verdens Gang reported that Slyngstad took part in a private seminar Tangen hosted months before at the University of Pennsylvania.
At Tangen’s invitation, Slyngstad reportedly accepted a ride to the panel aboard the hedge fund leader’s private Boeing jet. The multimillion-dollar event included a two-hour performance from Sting, whom Tangen paid about $1.3 million to perform, Verdens Gang reported.
In January, Tangen also reportedly indicated his interest in succeeding Slyngstad in an email, according to the newspaper.
But Norges Bank has said Slyngstad never responded to the correspondence. The central bank also defended the appointment, arguing that Slyngstad had no influence in choosing Tangen, who was selected by the executive board out of eight candidates. Tangen remained unnamed during the candidacy process.