By Louise Rasmussen and Gwladys Fouche
OSLO (Reuters) -Norway’s $1.7 trillion sovereign wealth fund mentioned on Saturday it can vote in opposition to ratifying Tesla (NASDAQ:) CEO Elon Musk’s $56 billion pay package deal, which is up for a shareholder vote subsequent week, after a Delaware decide invalidated it earlier this yr.
The fund is Tesla’s eighth-biggest shareholder, in response to LSEG knowledge.
Musk’s pay, the most important for a chief govt in company America, was authorized in 2018, however voided by a decide earlier this yr, who mentioned the quantity was unfair to shareholders, calling it an “unfathomable sum”.
The fund mentioned it appreciated “the significant value generated under Mr. Musk’s leadership since the grant date in 2018”.
Nonetheless, “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 Financial institution Funding Administration (NBIM), the operator of the fund mentioned.
In 2018, the fund had voted in opposition to the package deal.
“We will continue to seek constructive dialogue with Tesla on this and other topics,” NBIM added.
The fund, which holds a 0.98% stake price $7.7 billion in response to fund knowledge, has been vital of extreme CEO pay.
Responding to a put up on social media platform X, Musk mentioned the fund’s resolution is “not cool”, including that if the fund really surveyed the constituents, they might uncover “overwhelming support in favour.”
Final yr it voted in opposition to greater than half of U.S. CEO pay packages above $20 million, warning they didn’t align with long-term worth creation for shareholders.
UNIONS
The fund additionally mentioned it will vote for a shareholder proposal calling on Tesla to undertake a freedom of affiliation and collective bargaining coverage, a win for labour unions searching for to claim their affect over the U.S. automobile maker.
The vote comes as Tesla continues to face industrial motion in Sweden, with its mechanics on strike since Oct. 27, in one of many nation’s longest labour disputes.
Norway’s wealth fund, which owns 1.5% of all of the world’s listed shares, additionally in 2022 backed a shareholder proposal calling on Tesla to undertake a coverage of respecting labour rights comparable to freedom of affiliation and collective bargaining.
The electrical car producer faces a backlash within the Nordic area from unions and a few pension funds over its refusal to simply accept the demand from its Swedish mechanics for collective bargaining rights masking wages and different circumstances.
TEXAS
The wealth fund voted for transferring the EV maker’s state of incorporation to Texas from Delaware, a vote Musk wanted the Delaware decide invalidated his pay.
The fund additionally mentioned it will vote for a proposal to elect Musk’s youthful brother Kimbal, 51, to Tesla’s board of administrators. The fund had voted in favour of his election in 2018, in response to fund knowledge.
Tesla shareholders will vote on Musk’s pay, in addition to the re-election of administrators, together with Musk’s brother, at their annual assembly scheduled on June 13.
