By Louise Rasmussen and Gwladys Fouche
OSLO (Reuters) – Norway’s $1.7 trillion sovereign wealth fund said on Saturday it will vote against ratifying Tesla CEO Elon Musk’s $56 billion pay package, which will be voted on by shareholders next week, after a judge in Delaware had declared it invalid earlier this year.
The fund is Tesla’s eighth largest shareholder, according to LSEG data.
Musk’s salary, the highest for a CEO in corporate America, was approved in 2018 but invalidated earlier this year by a judge, who said the amount was unfair to shareholders and called it an “unfathomable sum.”
The fund said it “appreciates the significant value generated under Mr. Musk’s leadership since the grant date in 2018.”
Still, “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,” said Norges Bank Investment Management (NBIM), the fund’s operator.
In 2018, the fund had voted against the package.
“We will continue to seek constructive dialogue with Tesla on these and other topics,” NBIM added.
The fund, which has a 0.98% stake worth $7.7 billion according to fund data, has been critical of excessive CEO pay.
Last year it voted against more than half of US CEO pay packages above $20 million, warning they were not aligned with long-term value creation for shareholders.
labor unions
The fund also said it would vote in favor of a shareholder proposal calling on Tesla to adopt a freedom of association and collective bargaining policy, a victory for unions seeking to exert their influence over the US automaker.
The vote comes as Tesla continues to face industrial action in Sweden, where mechanics have been on strike since October 27 in one of the country’s longest labor disputes.
The Norwegian wealth fund, which owns 1.5% of all listed shares in the world, also backed a shareholder proposal in 2022 calling on Tesla to adopt a policy that respects labor rights such as freedom of association and collective bargaining.
The electric vehicle maker is facing backlash in the Nordic region from unions and some pension funds over its refusal to accept its Swedish mechanics’ demands for collective bargaining rights over wages and other conditions.
TEXAS
The wealth fund voted to transfer the EV maker’s incorporation status to Texas from Delaware, a vote Musk sought after a Delaware judge invalidated his wages.
The fund also said it would vote in favor of a proposal to elect Musk’s younger brother Kimbal, 51, to Tesla’s board of directors. The fund had voted in favor of his election in 2018, according to fund records.
Tesla shareholders will vote on Musk’s salary, as well as the re-election of directors, including Musk’s brother, at their annual meeting on June 13.
(Reporting by Louise Rasmussen and Gwladys Fouche, editing by Terje Solsvik and Tomasz Janowski)
