Norway’s $1.7 trillion sovereign wealth fund has announced its decision to vote against ratifying Tesla CEO Elon Musk’s $56 billion pay package. This move comes after a Delaware judge invalidated the package earlier this year, deeming it unfair to shareholders. Despite acknowledging the significant value generated under Mr. Musk’s leadership since the grant date in 2018, the fund remains critical of the total size of the award, its structure, performance triggers, dilution, and lack of mitigation of key person risk.
In 2018, the fund had already voted against Musk’s pay package. This decision is in line with the fund’s history of being critical of excessive CEO pay. Last year, it voted against more than half of U.S. CEO pay packages above $20 million, cautioning that they did not align with long-term value creation for shareholders.
In addition to opposing Musk’s pay package, the fund has also expressed its support for a shareholder proposal calling on Tesla to adopt a freedom of association and collective bargaining policy. This move is seen as a win for labor unions seeking to assert their influence over the U.S. carmaker.
Tesla continues to face industrial action in Sweden, with its mechanics on strike since Oct. 27. This labor dispute is one of the country’s longest, highlighting the challenges the company faces in terms of labor relations.
The electric vehicle producer has received backlash in the Nordic region from unions and some pension funds over its refusal to accept the demands from Swedish mechanics for collective bargaining rights covering wages and other conditions. This resistance has put Tesla in a challenging position in terms of its relationship with labor groups.
Voting on Key Proposals
Norway’s wealth fund, which owns 1.5% of all the world’s listed stocks, has voted for transferring the EV maker’s state of incorporation to Texas from Delaware, a move sought by Musk after the Delaware judge invalidated his pay. Additionally, the fund has expressed its intention to vote for a proposal to elect Musk’s younger brother, Kimbal, to Tesla’s board of directors.
Norway’s sovereign wealth fund’s decision to vote against Elon Musk’s $56 billion pay package reflects its ongoing concerns over CEO compensation, corporate governance issues, and labor relations. This stance underscores the fund’s commitment to promoting responsible business practices and protecting the interests of shareholders. Tesla shareholders will have the opportunity to weigh in on these important matters at the upcoming annual meeting scheduled on June 13.