Norway’s $1.7tn oil fund has taken a stand against Elon Musk’s $56bn pay award at Tesla, the largest remuneration package in US corporate history. The fund, the eighth largest shareholder in Tesla, expressed concerns about the size and structure of the pay package, as well as the failure to mitigate “key person risk.”
The vote on Musk’s pay award is set to take place on Thursday, following a judge in Delaware striking it down earlier this year, deeming it an “unfathomable sum.” The Norwegian fund, which owns about 1% of Tesla, worth approximately $8bn, had previously voted against the pay package when it was first proposed in 2018 and maintains its stance.
Proxy advisers ISS and Glass Lewis have also recommended shareholders reject Musk’s pay package, highlighting a growing trend of shareholder activism against excessive executive compensation. The oil fund has been increasingly vocal against such pay packages, voting against more than half of all awards exceeding $20mn in the US.
Nicolai Tangen, the fund’s chief executive, emphasized the rising corporate greed and its costly implications for shareholders due to dilution. The fund intends to engage in constructive dialogue with Tesla on pay and other matters while acknowledging the value generated under Musk’s leadership.
In addition to the pay award, the fund will also vote in favor of Tesla relocating its incorporation from Delaware to Texas, a move triggered by Musk’s dissatisfaction with the judge’s decision on his pay. Furthermore, the fund will support a shareholder proposal advocating for trade union rights, a stance that conflicts with Tesla’s position on collective bargaining in Sweden. Tesla has defended the pay award, attributing over $735bn in value creation to Musk’s leadership and expressing confidence in shareholder support for the deal approved in 2018.