Norway's Wealth Fund Opposes Musk's $56 Billion Tesla Pay Package

OSLO, June 8 (Reuters) – 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, which is up for a shareholder vote next week. A Delaware judge invalidated the package earlier this year.

Wealth Fund’s Stance:

• The fund acknowledged the significant value generated under Musk’s leadership since 2018 but expressed concerns about the size and structure of the pay package, citing performance triggers, dilution, and lack of mitigation of key person risk.
• Norges Bank Investment Management (NBIM), the operator of the fund, emphasized the need for a constructive dialogue with Tesla on this and other topics.

Labour Rights and Industrial Action:

• The wealth fund will support a shareholder proposal urging Tesla to adopt a freedom of association and collective bargaining policy, aligning with labor unions’ efforts to influence the U.S. carmaker.
• Tesla is currently dealing with ongoing industrial action in Sweden, with mechanics on strike since Oct. 27, marking one of the country’s longest labor disputes.

Corporate Governance:

• The wealth fund has been critical of excessive CEO pay and has a history of voting against such packages when they do not align with long-term shareholder value.
• The fund will vote for the proposal to transfer Tesla’s state of incorporation to Texas from Delaware, following the judge’s invalidation of Musk’s pay package.
• The fund will also support the re-election of Musk’s younger brother, Kimbal, to Tesla’s board of directors.