Gramo's general principles
This is an unofficial translation. If there is any difference between the versions, the Norwegian version applies: Generelle prinsipper (in Norwegian).
Every year, Gramo's Annual General Meeting adopts a set of overall principles. They determine how remuneration is distributed to rights holders, what happens to money that cannot be distributed, how the funds are managed, and which decisions are so significant that the board or the managing director cannot make them alone.
Distribution of remuneration to rights holders
Gramo always tries to distribute according to actual use. When this is not possible, one of the other principles is used.
- Actual use
Distribution based on reporting from the music user or external registration of actual use. - Distribution by analogy based on reporting
Used where actual use cannot be obtained, but other reporting data exists that is sufficiently linked to the area. - Distribution by analogy based on previous years' payments
Used where neither actual use nor reporting by analogy is available. The percentage share from previous years is used as the basis for distribution.
Distribution by analogy means that Gramo distributes the money on a related basis when the actual use cannot be measured directly.
One example is music in public places, such as shops, cafés and gyms. Gramo cannot know exactly what each of its more than 16,000 business customers plays. Instead, we use play data from the streaming services and radio stations the businesses actually use, for example Spotify and radio. This comes close to the actual use, but it is still an analogy: the data shows what is played on these sources in general, not exactly what each business played.
Distribution rules and dispute resolution
The board prepares and adopts standing distribution rules, including dispute resolution, based on the general principles adopted by the Annual General Meeting.
Amounts that cannot be distributed
Sometimes Gramo cannot find the rights holder, or the amount is too small to be paid out. This money is called amounts that cannot be distributed, and there are separate rules for what happens to it.
What makes money non-distributable?
- When the individual annual amount is less than 0.5% of the National Insurance basic amount. The limit is set in section 31 of the Regulations to the Norwegian Copyright Act.
- When remuneration that no rights holder has claimed remains unclaimed for three years from the end of the financial year in which it was collected.
What happens to the money then?
- Gramo may set aside up to 10% to cover costs.
- Funds under section 21 of the Norwegian Copyright Act can go to social, cultural and educational purposes for the rights holders.
- The Annual General Meeting approves the actual use, based on a recommendation from the board.
General investment strategy
Collected remuneration belongs to Gramo's members and other rights holders.
Overall
- Asset management based on financial expertise
- The highest possible return for a given level of risk
- High liquidity and a relevant time horizon
- Diversification reduces portfolio risk
- Main emphasis on equities in normal markets
Restrictions
- Index funds, not individual shares
- Management costs normally below 0.3% a year
- Bank deposits covered by the Norwegian Banks' Guarantee Fund (NOK 2 million)
- Fixed-income investments only within investment grade (BBB+)
- In line with the UN Global Compact
Risk management strategy
Some decisions are so significant that the board or the administration cannot make them alone. They must be adopted by the Annual General Meeting. The rules are set out in point 2.6.6 of Gramo's articles of association. These decisions are:
- Buying, selling or mortgaging real property
- Mergers and alliances, setting up subsidiaries, and acquiring other entities or shares or rights in other entities
- Approving borrowing, lending or loan guarantees
Deductions for social, cultural or educational purposes
Under section 20 of the Collective Management Act, collective management organisations may make deductions from the remuneration to fund social, cultural or educational services, provided that these have been adopted by the Annual General Meeting and are offered to rights holders on reasonable terms.
Gramo has chosen not to use this option, so no deductions are made for such purposes. This means that all the remuneration collected, after deduction of documented administrative costs, is distributed and paid out directly to the rights holders.
Administrative costs
Administrative costs are covered by deductions from the remuneration, see section 20 of the Collective Management Act. No deductions are made from remuneration from abroad, as these costs have been deducted before the money is transferred.
Gramo provides no services other than collective rights management and has no ownership interests in other companies or organisations.