(Bloomberg) — Norway’s $1.7 trillion sovereign wealth fund said it opposed the $56 billion pay package for Tesla Inc. CEO Elon Musk. would vote, increasing opposition for the automaker ahead of its annual general meeting next week.
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“We remain concerned about the overall size of the reward, the structure given performance triggers, dilution and the lack of mitigation of key person risk,” Norges Bank Investment Management – the fund’s official name – said in a statement on Saturday.
The vote at next week’s AGM will be the second time Musk’s pay package has been presented to shareholders. A judge overturned an initial vote that approved the package in 2018. Proxy advisors Institutional Shareholder Services and Glass Lewis & Co. investors have recommended rejecting the proposal.
NBIM also voted against the remuneration package in 2018, although about three-quarters of investors supported it at the time. A Delaware judge quashed the deal earlier this year because investors were not fully informed of key details.
The decision is “in line with our vote on the same price in 2018,” the Norwegian fund said, adding that it “will continue to seek a constructive dialogue with Tesla on this and other topics.”
The outcome of the shareholder vote is purely advisory, although a loss would be a great shame for Tesla’s board and its top executive. Musk has also threatened to build products outside of Tesla if he cannot increase his stock ownership in the company, something the pay deal would allow him to do.
While NBIM said it would vote in favor of a management proposal to move the company’s corporate headquarters from Delaware to Texas, it plans to support a shareholder proposal calling on Tesla to adopt new policies regarding collective bargaining and freedom of speech association.
The latest proposal, a response to a nearly seven-month strike by Swedish Tesla engineers, is backed by several of the Nordic region’s largest asset owners. Tesla urged shareholders to vote against it, saying that “the company is already committed to protecting the rights of its employees.”
According to its website, NBIM owned a 0.98% stake in Tesla worth $7.72 billion at the end of 2023. It announces its voting intentions five days before the General Meetings of the companies in which it invests.
(Updates with context on the collective bargaining proposal in the eighth paragraph.)
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