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Sunday, Sep 08, 2024

Norway's $1.7 Trillion Fund Opposes Tesla's $56B Musk Pay Package, Supports Union Proposal

Norway's $1.7 Trillion Fund Opposes Tesla's $56B Musk Pay Package, Supports Union Proposal

Norway's $1.7 trillion sovereign wealth fund, which is Tesla's eighth-largest shareholder, announced on Saturday that it will vote against Elon Musk's $56 billion pay package at the upcoming shareholder meeting.
The pay package, the largest for a CEO in corporate America, was approved in 2018 but was voided by a Delaware judge earlier this year due to its unfairness to shareholders.

The fund acknowledged Musk's significant value generation since 2018 but expressed concerns about the package's size, structure, potential dilution, and lack of risk mitigation.

In 2018, the Norwegian sovereign wealth fund, NBIM, voted against Tesla's executive pay package and criticized excessive CEO compensation.

The fund, which owns a 0.98% stake worth $7.7 billion in Tesla, has been vocal about this issue.

Musk responded on social media, expressing disappointment and claiming there would be support for the pay package among Tesla's constituents.

Last year, the fund opposed more than half of US CEO pay packages exceeding $20 million due to misalignment with long-term value creation for shareholders.

Additionally, NBIM announced its support for a shareholder proposal advocating for Tesla to adopt a freedom of association and collective bargaining policy, a victory for labor unions aiming to influence the US car maker.

Tesla is facing labor disputes in Sweden, where mechanics have been on strike since late October.

Norway's wealth fund, which owns a significant stake in Tesla, supported a shareholder proposal in 2022 calling for Tesla to respect labor rights, including collective bargaining.

Tesla has refused to grant these demands, leading to backlash from unions and pension funds in the Nordic region.

Additionally, the wealth fund recently voted to support Tesla's request to transfer its state of incorporation from Delaware to Texas, following a judge's decision invalidating Elon Musk's pay package.

The text reports that a fund intends to support Elon Musk's compensation package and vote for his younger brother Kimbal Musk, 51, to join Tesla's board of directors at the upcoming annual shareholders meeting on June 13.

The fund previously supported Kimbal Musk's election in 2018.
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