By Louise Rasmussen and Gwladys Fouché
OSLO (Reuters) – Norway’s $1.7 trillion sovereign wealth fund said on Saturday it would vote against ratifying Tesla CEO Elon Musk’s $56 billion compensation plan, which is due to be put to a shareholder vote on Wednesday. next week, after a Delaware judge struck it down earlier this year.
The fund is Tesla’s eighth largest shareholder, according to LSEG data.
Musk’s salary, the highest for a CEO of a US company, was approved in 2018 but overturned by a judge earlier this year, who said the amount was unfair to shareholders, calling it a “sum unfathomable”.
The fund said it appreciates “the significant value generated under Mr. Musk’s leadership since the grant date in 2018.”
Nonetheless, “we remain concerned about the total award amount, the structure considering performance triggers, dilution and the lack of key person risk mitigation,” Norges Bank Investment Management (NBIM) said, the fund operator.
In 2018, the fund voted against the package.
“We will continue to seek 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 compensation.
Last year, he voted against more than half of U.S. CEO pay packages above $20 million, warning that they fell short of creating long-term value for shareholders.
TRADE 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 victory for unions seeking to assert their influence over the U.S. 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 labor disputes.
The Norwegian wealth fund, which owns 1.5% of all listed stocks worldwide, also backed a shareholder proposal in 2022 calling on Tesla to adopt a policy of 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 the right to collective bargaining covering wages and other conditions.
TEXAS
The wealth fund voted to move the electric vehicle maker’s state of incorporation to Texas from Delaware, a vote Musk requested after the Delaware judge struck down his salary.
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 voted in favor of his election in 2018, according to fund data.
Tesla shareholders will vote on Elon Musk’s compensation, as well as the re-election of directors, including Musk’s brother, at their annual meeting scheduled for June 13.
(Reporting by Louise Rasmussen and Gwladys Fouche, editing by Terje Solsvik and Tomasz Janowski)
