(Bloomberg) — Norway’s $1.7 trillion sovereign wealth fund said it would vote against the $56 billion pay package for Tesla Inc. CEO Elon Musk, strengthening the automaker’s opposition before its annual general meeting next week.
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“We remain concerned about the total award amount, the structure considering performance triggers, dilution and lack of key person risk mitigation,” said Norges Bank Investment Management – the official name of the fund – in a press release on Saturday.
The vote at next week’s AGM will be the second time Musk’s pay package has been put before shareholders. A judge overturned an initial vote that approved the package in 2018. Proxy advisers Institutional Shareholder Services and Glass Lewis & Co. recommended investors reject the proposal.
NBIM also voted against the pay package in 2018, even though about three-quarters of investors supported it at the time. A Delaware judge struck down the deal earlier this year, saying investors weren’t 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 constructive dialogue with Tesla on this and other topics.”
The outcome of the shareholder vote is only advisory, although a loss would be a major embarrassment to Tesla’s board and its top executive. Musk also threatened to make products outside of Tesla if he couldn’t increase his stakes in the company, which 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 headquarters from Delaware to Texas, it plans to support a shareholder proposal calling on Tesla to adopt new related policies collective bargaining and freedom of association.
This latest proposal, a response to a nearly seven-month strike by Swedish Tesla technicians, is supported by several of the Nordic region’s largest asset owners. Tesla urged shareholders to vote against it, saying “the company is already committed to protecting the rights of its employees.”
NBIM held a 0.98% stake in Tesla worth $7.72 billion at the end of 2023, according to its website. It publishes its voting intentions five days before the general meetings of the companies in which it invests.
(Updates with context on collective bargaining proposal in eighth paragraph.)
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