Norway’s sovereign wealth fund, valued at USD 1.7 trillion, announced on Saturday its intention to oppose the ratification of Tesla CEO Elon Musk’s USD 56 billion pay package. This move comes ahead of a shareholder vote scheduled for next week, following a prior invalidation of the package by a Delaware judge earlier this year. As Tesla’s eighth-largest shareholder, according to LSEG data, the Norwegian fund wields significant influence.
Musk’s compensation, deemed the highest among chief executives in corporate America, was initially approved in 2018 but was later nullified by a judge who deemed it unjust to shareholders, referring to the sum as “unfathomable.” While acknowledging the value created under Musk’s leadership since 2018, the fund expressed concerns regarding the size of the award, its performance-based structure, potential dilution, and the lack of mitigation of key person risk. Notably, the fund had voted against the package in 2018 and aims to engage in constructive dialogue with Tesla on this matter.
Having a stake of 0.98%, valued at USD 7.7 billion, the fund has historically been critical of excessive CEO compensation. Musk responded to the fund’s decision on social media, expressing discontent and asserting overwhelming support for his compensation package among constituents. Despite Musk’s assertion, the fund has consistently opposed CEO pay packages exceeding USD 20 million, citing concerns about alignment with long-term shareholder value creation.
Furthermore, the fund announced its support for a shareholder proposal urging Tesla to adopt a policy regarding freedom of association and collective bargaining, a move applauded by labor unions seeking influence within the company. This vote coincides with ongoing industrial action in Sweden, where Tesla mechanics have been on strike since October 27, marking one of the country’s lengthiest labor disputes.
Additionally, the wealth fund endorsed the proposal to transfer Tesla’s state of incorporation from Delaware to Texas, a move Musk advocated following the invalidation of his pay package. It also pledged support for electing Musk’s younger brother, Kimbal Musk, to Tesla’s board of directors, a position for which it had previously voted in favor in 2018. These matters, along with the ratification of Musk’s pay and the re-election of directors, including his brother, will be decided at Tesla’s annual meeting on June 13.