Norway wealth fund to vote against Musk鈥檚 $56 billion Tesla pay package

Elon Musk, CEO of SpaceX and Tesla and owner of X. (Reuters)
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  • Musk鈥檚 pay was approved in 2018, but voided by a judge, who said the amount was unfair to shareholders
  • Norway's severeign fund holds a 0.98 percent stake worth $7.7 billion of Tesla shares

OSLO: Norway鈥檚 $1.7 trillion sovereign wealth fund said on Saturday it will vote against ratifying Tesla CEO Elon Musk鈥檚 $56 billion pay package, which is up for a shareholder vote next week, after a Delaware judge invalidated it earlier this year.

The fund is Tesla鈥檚 eighth-biggest shareholder, according to LSEG data.
Musk鈥檚 pay, the largest for a chief executive in corporate America, was approved in 2018, but voided by a judge earlier this year, who said the amount was unfair to shareholders, calling it an 鈥渦nfathomable sum.鈥�
The fund said it appreciated 鈥渢he significant value generated under Mr. Musk鈥檚 leadership since the grant date in 2018.鈥�
Still, 鈥渨e remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk,鈥� Norges Bank Investment Management (NBIM), the operator of the fund said.
In 2018, the fund had voted against the package.
鈥淲e will continue to seek constructive dialogue with Tesla on this and other topics,鈥� NBIM added.
The fund, which holds a 0.98 percent stake worth $7.7 billion according to fund data, has been critical of excessive CEO pay.
Responding to a post on social media platform X, Musk said the fund鈥檚 decision is 鈥渘ot cool,鈥� adding that if the fund actually surveyed the constituents, they would discover 鈥渙verwhelming support in favor.鈥�
Last year it voted against more than half of US CEO pay packages above $20 million, warning they did not align with long-term value creation for shareholders.

Unions
The fund also said it would vote for a shareholder proposal calling on Tesla to adopt a freedom of association and collective bargaining policy, a win for labor unions seeking to assert their influence over the US car maker.
The vote comes as Tesla continues to face industrial action in Sweden, with its mechanics on strike since Oct. 27, in one of the country鈥檚 longest labor disputes.
Norway鈥檚 wealth fund, which owns 1.5 percent of all the world鈥檚 listed stocks, also in 2022 backed a shareholder proposal calling on Tesla to adopt a policy of respecting labor rights such as freedom of association and collective bargaining.
The electric vehicle producer faces a backlash in the Nordic region from unions and some pension funds over its refusal to accept the demand from its Swedish mechanics for collective bargaining rights covering wages and other conditions.

Texas
The wealth fund voted for transferring the EV maker鈥檚 state of incorporation to Texas from Delaware, a vote Musk sought after the Delaware judge invalidated his pay.
The fund also said it would vote for a proposal to elect Musk鈥檚 younger brother Kimbal, 51, to Tesla鈥檚 board of directors. The fund had voted in favor of his election in 2018, according to fund data.
Tesla shareholders will vote on Musk鈥檚 pay, as well as the re-election of directors, including Musk鈥檚 brother, at their annual meeting scheduled on June 13.