Next week, shareholders will have the opportunity to vote on Tesla (TSLA.O) CEO Elon Musk’s
$56 billion compensation plan, which was declared illegal earlier this year by a Delaware judge.On Saturday, Norway’s $1.7 trillion national wealth fund announced that it will not support theratification of Musk’s pay package. LSEG data shows that the fund is Tesla’s eighth-largestshareholder. Musk received the highest salary of any CEO in the United States when it wasapproved in 2018, but a judge revoked it earlier this year, citing the amount as “unfathomable”and declaring it to be unfair to shareholders.
According to the fund, “the significant value generated under Mr. Musk’s leadership since thegrant date in 2018” is much appreciated. However, the fund’s operator, Norges Bank InvestmentManagement (NBIM), stated that “we remain concerned about the total size of the award, thestructure given performance triggers, dilution, and lack of mitigation of key person risk.” Thefund had voted against the package in 2018. “We will continue to seek constructive dialoguewith Tesla on this and other topics,” the NBIM stated.
According to fund data, the fund, which has a $7.7 billion holding worth of 0.98%, has expresseddisapproval of CEO pay that is too high. In response to a remark on social networking site X,Musk opened a new tab and stated that the fund’s choice is “not cool.” He went on to say that ifthe fund conducted a survey of its constituents, they would find “overwhelming support infavor.” It warned that more than half of U.S. CEO pay deals exceeding $20 million did not fit withlong-term value creation for shareholders when it voted against them last year.The fund furtherdeclared that it would support a shareholder motion that demanded that Tesla implement apolicy of freedom of association and collective bargaining, a victory for labor unions looking toincrease their clout with the American automaker. The vote takes place at a time when Tesla isstill embroiled in a labor issue in Sweden, where its mechanics have been on strike sinceOctober 27. 1.5% of all listed stocks worldwide are owned by Norway’s wealth fund, which in2022 supported a shareholder resolution urging Tesla to implement a policy upholding laborrights like collective bargaining and freedom of association.
The maker of electric vehicles is facing criticism from unions and certain pension funds in theNordic region for turning down the demand of its Swedish mechanics for the right to collectivelybargain over salaries and other conditions.After a Delaware judge nullified Musk’s compensation,the wealth fund voted to move the EV maker’s state of incorporation from Delaware toTexas.Additionally, the fund declared that it will support a motion to elect Musk’s 51-year-oldyounger brother Kimbal to the Tesla board of directors. Based on fund data, the fund hadsupported his election in 2018. At their annual meeting on June 13, Tesla shareholders will vote
on Musk’s compensation as well as the reelection of directors, including Musk’s brother.