The $56 billion compensation package for Tesla CEO Elon Musk is up for a shareholder vote next week. A Delaware judge disqualified the package earlier this year.
On Saturday, Norway’s $1.7 trillion sovereign wealth fund said that it will vote against ratifying it.
LSEG data shows that the fund is Tesla’s eighth-largest shareholder.
The biggest CEO salary in corporate America, Musk’s was authorized in 2018 but was later overturned by a judge this year who claimed the compensation was “unfathomable” and unjust to shareholders.
According to the fund, “the significant value generated under Mr. Musk’s leadership since the grant date in 2018” is much appreciated.
However, the fund’s operator, Norges Bank Investment Management (NBIM), stated that “we remain concerned about the total size of the award the structure given performance triggers, dilution, and lack of mitigation of key person risk.”
The fund had voted against the package in 2018.
“We will continue to seek constructive dialogue with 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 expressed disapproval of CEO pay that is too high.
It warned that more than half of U.S. CEO pay deals exceeding $20 million did not fit with long-term value creation for shareholders when it voted against them last year.
UNIONS
The fund also declared that it will support a shareholder motion that calls for Tesla to implement a policy permitting freedom of association and collective bargaining, a victory for labor unions trying to exert control over the American automaker.
The vote takes place at a time when Tesla is still embroiled in a labor issue in Sweden where its mechanics have been on strike since October 27.
1.5% of all listed stocks worldwide are owned by Norway’s wealth fund which in 2022 supported a shareholder resolution urging Tesla to implement a policy upholding labor rights like collective bargaining and freedom of association.
The maker of electric vehicles is facing criticism from unions and certain pension funds in the Nordic region for turning down the demand of its Swedish mechanics for the right to collectively bargain over salaries and other conditions.
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Source
Reuters
