Louise Rasmussen and Gwladys Fouché
OSLO (Reuters) – Norway’s $1.7 trillion sovereign wealth fund said on Saturday it would vote against ratifying Tesla Chief Executive Elon Musk’s $56 billion pay package, which goes to a shareholder vote next week, after a state judge Delaware invalidated it earlier this week. year.
The fund is Tesla’s eighth-largest shareholder, according to LSEG.
Musk’s pay, the largest for a CEO in corporate America, was approved in 2018 but overturned by a judge earlier this year who said the amount was unfair to shareholders, calling it an “incomprehensible amount.”
The foundation said it appreciates the “significant returns achieved under Mr. Musk’s leadership since the grant was awarded in 2018.”
However, “we remain concerned about the overall size of the remuneration, performance-based structure, dilution and lack of key person risk mitigation,” fund operator Norges Bank Investment Management (NBIM) said.
In 2018, the fund voted against the package.
“We will continue to strive for constructive dialogue with Tesla on this and other topics,” NBIM added.
The fund, which holds 0.98% of shares worth $7.7 billion, according to the fund, has criticized excessive CEO pay.
Responding to a post on social media site X, Musk said the foundation’s decision was “not cool,” adding that if the foundation actually surveyed voters, they would find “overwhelming support.”
Last year, the company voted against more than half of U.S. CEO compensation packages exceeding $20 million, warning they were not aligned with long-term value creation for shareholders.
UNIONS
The fund also said it would vote on a shareholder proposal calling on Tesla to adopt freedom of association and collective bargaining policies, a victory for unions seeking to assert their influence over the American automaker.
The vote comes as Tesla continues to face industrial action in Sweden, where its mechanics have been on strike since October 27 in one of the country’s longest-running labor disputes.
The Norwegian Wealth Fund, which owns 1.5% of all listed shares worldwide, also backed a shareholder proposal in 2022 calling on Tesla to adopt policies respecting labor rights such as freedom of association and collective bargaining.
The electric vehicle maker is facing a backlash in the Nordic region from unions and some pension funds over its refusal to accept its Swedish mechanics’ demand for collective bargaining rights over wages and other conditions.
TEXAS
The wealth fund voted to move the electric car maker’s state of incorporation from Delaware to Texas, a vote Musk sought after a Delaware judge invalidated his salary.
The fund also said it would vote on a proposal to elect Musk’s younger brother Kimbal, 51, to Tesla’s board of directors. The foundation voted to elect him in 2018, according to foundation 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 scheduled for June 13.