Written by Louise Rasmussen and Gwladys Foch
OSLO (Reuters) – Norway's $1.7 trillion sovereign wealth fund said on Saturday it would vote against ratifying Tesla Inc CEO Elon Musk's $56 billion pay package, which will be put to a shareholder vote next week, after… A Delaware judge struck it down earlier this year. year.
The fund is Tesla's eighth-largest shareholder, according to LSEG data.
Musk's pay, the largest for a US corporate CEO, was approved in 2018, but was overturned by a judge earlier this year, who said the amount was unfair to shareholders, calling it an “unfathomable amount.”
The fund said it appreciates “the significant value achieved under Mr. Musk's leadership since the award date in 2018.”
However, “we remain concerned about the overall size of the award, the structure in light of performance drivers, dilution, and the lack of mitigation of key person risks,” Norges Bank Investment Management (NBIM), the fund’s operator, said.
In 2018, the Fund voted against the package.
“We will continue to seek a constructive dialogue with Tesla on this and other topics,” NBIM added.
The fund, which has a 0.98% stake worth $7.7 billion according to fund data, has criticized excessive CEO pay.
In response to a post on social media platform
Last year, it voted against more than half of US CEO pay packages exceeding $20 million, warning that they were not consistent with long-term value creation for shareholders.
Unions
The fund also said it would vote in favor of a shareholder proposal calling on Tesla to adopt a policy of freedom of association and collective bargaining, a win for labor unions seeking to assert their influence over the US automaker.
The vote comes as Tesla continues to face industrial action in Sweden, with its mechanics 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 stocks in the world, also backed in 2022 a shareholder proposal calling on Tesla to adopt a policy of respecting labor rights such as freedom of association and collective bargaining.
The electric car producer is facing a backlash in the Nordic region from unions and some pension funds over its refusal to accept Swedish mechanics' demand for collective bargaining rights covering wages and other conditions.
Texas
The wealth fund voted to move the electric vehicle manufacturer's incorporation status from Delaware to Texas, a vote Musk sought after a Delaware judge invalidated his pay.
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 data.
Tesla shareholders will vote on Musk's pay, as well as re-elect board members, including Musk's brother, at their annual meeting scheduled for June 13.