Bloomberg — Norway’s $1.7 trillion sovereign wealth fund said it would vote against the $56 billion pay package for the CEO of Tesla Inc. (TSLA), Elon Musk, adding to the opposition for the carmaker ahead of its annual general meeting next week.
“We remain concerned about the overall size of the award, the structure given the performance triggers, dilution and failure to mitigate key person risk,” Norges Bank Investment Management – the fund’s official name – said in a statement on Saturday.
The vote at next week’s General Shareholders’ Meeting will be the second time Musk’s pay package goes to shareholders. A judge overturned an initial vote that approved the package in 2018. Proxy advisors Institutional Shareholder Services and Glass Lewis & Co. have recommended investors reject the proposal.
NBIM also voted against the salary package in 2018, although about three-quarters of investors backed it at the time. A Delaware judge voided the deal earlier this year, saying investors were not fully informed of key details.
The decision is “consistent with our vote on the same award in 2018,” the Norwegian fund said, adding that it “will continue to seek a constructive dialogue with Tesla on this and other issues.”
The outcome of the shareholder vote is advisory only, although a loss would be a great embarrassment to Tesla’s board and its top executive. Musk has also threatened to make products outside of Tesla if he cannot increase his stake in the company, something the salary agreement would allow him to do.
Although NBIM said it would vote in favor of a management proposal to move the company’s headquarters from Delaware to Texas, it plans to support a shareholder proposal calling on Tesla to adopt new policies related to collective bargaining and freedom union.
This latest proposal, a response to a nearly seven-month-long strike by Tesla’s Swedish technicians, has the support of several of the Nordic region’s largest asset owners. Tesla has urged shareholders to vote against, stating that “The company is already committed to protecting the rights of its employees.”
NBIM owned a 0.98% stake in Tesla worth $7.72 billion at the end of 2023, according to its website. It issues its voting intentions five days before the general meetings of the companies in which it invests.
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