Norway’s $1.7 trillion sovereign wealth fund announced on Saturday that it will vote against ratifying Tesla CEO Elon Musk’s $56 billion pay package in an upcoming shareholder vote. This decision follows a Delaware judge’s ruling earlier this year that invalidated the compensation, deeming it unfair to shareholders and labeling it an “unfathomable sum.”
The fund, managed by Norges Bank Investment Management (NBIM), holds a 0.98% stake in Tesla, valued at approximately $7.7 billion, making it Tesla’s eighth-largest shareholder according to LSEG data.
While NBIM acknowledged the “significant value generated under Mr. Musk’s leadership since the grant date in 2018,” it expressed concerns about the “total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk.” The fund had also opposed the pay package when it was initially approved in 2018.
NBIM emphasized its commitment to ongoing dialogue with Tesla on this and other matters. The fund has a history of criticizing excessive CEO pay, having voted against more than half of U.S. CEO compensation packages exceeding $20 million last year, arguing that such pay did not align with long-term value creation for shareholders.
In addition to opposing Musk’s compensation, the fund will support a shareholder proposal advocating for Tesla to adopt a policy on freedom of association and collective bargaining. This move is seen as a victory for labor unions seeking greater influence over the U.S. automaker, which is currently facing industrial action in Sweden. Tesla’s Swedish mechanics have been on strike since October 27, marking one of the country’s longest labor disputes.
Norway’s wealth fund, which owns 1.5% of all the world’s listed stocks, backed a similar proposal in 2022, calling on Tesla to respect labor rights. The electric vehicle manufacturer has faced opposition from unions and pension funds in the Nordic region over its stance on collective bargaining rights for its Swedish workforce.
The wealth fund also plans to vote in favor of transferring Tesla’s state of incorporation to Texas from Delaware, a move sought by Musk after his pay package was invalidated by the Delaware court. Additionally, the fund will support the re-election of Musk’s younger brother, Kimbal Musk, to Tesla’s board of directors. Kimbal Musk, 51, has previously received the fund’s backing for his board position in 2018.
Tesla shareholders will cast their votes on Musk’s compensation package and the re-election of directors, including Kimbal Musk, at the annual meeting scheduled for June 13.
