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Nobel Prize cash award reduced by 20 percent to meet future budget shortfall

Monday, 11 June 2012
The Nobel Foundation is lowering the cash prize money for the Nobel Prizes awards by twenty percent, an adjustment to meet pressures caused by budget shortfall.

The aim of the decision is explained that what ever resources are available should be able to meet future awards. The price cut starts this year from Skr10 million to Skr8 million, still a great amount though.

“It will always be nice to get a Nobel Prize even if prize money is not as high as it has been previously” said Lars Heikensten, the Nobel Foundation's executive director, to Swedish daily Dagens Nyheter.

He believes that the value of a Nobel Prize is more about status than about the prize money and do not think the next winner will be disappointed.

“They will be thrilled when they get the price. The first thing they think is probably not that of the money. The decision to cut back on the prize money is difficult to comprehend,” according to Lars Heikensten.

“I do not want to trivialize this, absolutely not. I think there is every reason for us to try and have the ambition to get the prize again in the future.”

One reason attributed to the reduction in the prize money has to do with the anxiety in financial markets. Another is to make the Nobel Foundation's funds to be sufficient in the future.

It is very unsettled in the financial markets and many analysts are of the opinion that over the next few years there will be difficulties to maintain the same level of return that have been had before.

Lars Heikensten also admits that money, originally from the capital Alfred Nobel once donated, does not grow at the pace needed to secure the price at current levels in the future.
That returns over the past decade has not been in line with spending.

According Heikensten roughly 50 percent of the Nobel Foundation's assets is held in shares, 30 percent in "alternative investments" - such as hedge funds, private equity arrangements and property investment - and the remaining 20 percent is in fixed-income investments.

The prize money has been Skr 10 million since 2001, according to the Nobel Foundation. It is also the year that the sum so far has been highest, translated at the year's values.

The year before, 2000, the sum was Skr 9 million, since 1994, the price has been over seven million.
In 1901 the prize fund had Skr 150 782 million, representing over Skr8 million in last year's values.
By Scancomark.se Team


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