Elon Musk’s $56 billion pay package won’t get Norwegian fund vote

Norway’s $1.7 trillion sovereign wealth fund said it would vote against the $56 billion pay package for Tesla Inc. Chief Executive Elon Musk, adding to the automaker’s opposition 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 lack of mitigation of key person risk,” Norges Bank Investment Management, the fund’s official name, said in a statement. Saturday.

The vote at next week’s Annual General Meeting will be the second time Musk’s pay package has been put before shareholders. A judge overturned an initial vote approving the package in 2018. Proxy advisors Institutional Shareholder Services and Glass Lewis & Co. have recommended investors reject the proposal.

NBIM also voted against the pay package in 2018, although around 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 constructive dialogue with Tesla on this and other issues.”

The result of the shareholder vote is informational only, although a loss would be a great embarrassment to Tesla’s board of directors and its top executive. Musk has also threatened to make products outside of Tesla if he can’t increase his ownership stake in the company, something the pay deal would allow him to do.

While NBIM said it would vote in favor of a management proposal to move the company’s corporate headquarters to Texas from Delaware, it plans to back a shareholder proposal calling on Tesla to adopt new policies related to collective bargaining and freedom of association.

This latest proposal, a response to a nearly seven-month strike by Tesla’s Swedish technicians, has the support of several of the largest asset owners in the Nordic region. Tesla has urged shareholders to vote against it, saying “the company is already committed to protecting the rights of its employees.”

NBIM owned a 0.98% stake worth $7.72 billion in Tesla as of 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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