Norway’s $1.7 trillion sovereign wealth fund said on Saturday that it will vote against ratifying billionaire Tesla CEO Elon Musk’s $56 billion pay package, which shareholders will vote on in the coming days.
This comes after a judge in the US state of Delaware invalidated the package earlier this year.
According to data from the London Stock Exchange Group, the fund is the eighth largest shareholder in Tesla.
In 2018, Musk’s salary was approved, which is the largest salary received by a CEO among major American companies. But the judge issued a ruling to invalidate it, saying that the amount was unfair to shareholders.
The fund said it appreciates “the significant value that has been achieved under Mr. Musk’s leadership since the date the pay was approved in 2018.”
However, Norges Bank Investment Management (NBIM), which manages the fund, said: “We remain concerned about the overall size of the pay, the structure given performance incentives… and the lack of mitigation of the risks of dependence on (one) key person.”
In 2018, the Fund also voted against the package.
“We will continue to seek a constructive dialogue with Tesla on this and other topics,” NBIM said.
The fund owns a 0.98% stake in Tesla, worth $7.7 billion, according to its data, and has previously criticized the CEO’s exaggerated pay.
Last year, the fund voted down more than half of US CEO pay packages exceeding $20 million, warning that they were not consistent with creating long-term shareholder value.
Freedom of association
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, which is a response to labor unions seeking to assert their influence over the American automaker.
The vote comes as Tesla faces a strike by its mechanics in Sweden since October 27, in one of the longest labor disputes in the country.
The Norwegian wealth fund, which owns 1.5% of all listed stocks in the world, also supported a proposal to shareholders in 2022 calling on Tesla to adopt a policy to respect workers’ rights such as the right to freedom of association and collective bargaining.
The electric car maker is facing strong negative reactions in the Nordic countries from unions and some pension funds over its refusal to accept Swedish mechanics’ request for collective bargaining rights covering wages, among other things.
Tesla shareholders will vote at their annual meeting scheduled for June 13 on Musk’s salary as well as on the re-election of board members, including Musk’s younger brother Kimbal (51 years old).
