Norway’s US$1.7 trillion sovereign wealth fund on Saturday said it would vote against a US$56 billion pay package for Tesla Inc chief executive officer Elon Musk, adding to opposition for the automaker ahead of its annual general meeting this week.
“We remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk,” Norges Bank Investment Management (NBIM) — the official name of the fund — said in a statement.
The vote at this week’s annual general meeting would be the second time Musk’s pay package has been put before shareholders. A judge voided an initial vote that approved the package in 2018.
Photo: AP
Proxy advisers Institutional Shareholder Services and Glass Lewis & Co have recommended investors reject the proposal.
NBIM also voted against the pay 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 would “continue to seek constructive dialog with Tesla on this and other topics.”
The outcome of the shareholder vote is only advisory, although a loss would be a major embarrassment to Tesla’s board and to its top executive. Musk has threatened to build products outside of Tesla if he cannot increase his equity holdings 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 home 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.
The latter proposal, a response to an almost seven-month long strike by Swedish Tesla technicians, is being supported by several of the Nordic region’s biggest asset owners. Tesla has urged shareholders to vote against it, saying that “the company is already committed to protecting its employees’ rights.”
NBIM owned a 0.98 percent holding worth US$7.72 billion in Tesla as of the end of last year. It issues its voting intentions five days before the annual general meetings of the companies it invests in.
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