Norway wealth fund to vote against Musk's Tesla pay package

AFP / Jim Watson

Norway's sovereign wealth fund said on Saturday that it will vote against ratifying Tesla CEO Elon Musk's $56 billion (AED 205.69 billion) pay package, which is up for a shareholder vote next week.

This is after a Delaware judge invalidated it earlier this year.

The $1.7 trillion (AED 6.24 trillion) fund is Tesla's eighth-biggest shareholder, according to LSEG data.

Musk's pay, the largest for a CEO 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 "unfathomable sum".

The fund said it appreciated "the significant value generated under Mr. Musk's leadership since the grant date in 2018".

Still, "we remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk," Norges Bank Investment Management (NBIM), the fund operator said.

In 2018, the fund had voted against the package.

"We will continue to seek constructive dialogue with Tesla on this and other topics," NBIM added.

According to data, the fund, which holds a 0.98 per cent stake worth $7.7 billion (AED 28.28 billion), has been critical of excessive CEO pay.

Last year, it voted against more than half of US pay packages above $20 million (AED 73.46 million), warning that they did not align with long-term value creation for shareholders.


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 labour unions seeking to assert their influence over the US carmaker.

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 labour disputes.

Norway's wealth fund, which owns 1.5 per cent of all the world's listed stocks, also in 2022 backed a shareholder proposal calling on Tesla to adopt a policy of respecting labour 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.


The wealth fund voted for transferring the EV maker's 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's younger brother Kimbal, 51, to Tesla's board of directors. The fund had voted in favour of his election in 2018, according to fund data.

Tesla shareholders will vote on Musk's pay, as well as the re-election of directors, including Musk's brother, at their annual meeting scheduled on June 13.

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