Norway Wealth Fund to Vote Against Elon Musk’s $56 Billion Tesla Pay Package

Norway Wealth Fund to Vote Against In a significant move, Norway’s $1.7 trillion sovereign wealth fund has announced its decision to vote against ratifying Tesla CEO Elon Musk’s $56 billion pay package. This decision will come to light during Tesla’s annual shareholder meeting, scheduled for June 13. The fund’s choice is notable given its status as Tesla’s eighth-largest shareholder, holding a 0.98% stake worth $7.7 billion, according to LSEG data.

Norway Wealth Fund to Vote Against Elon Musk’s $56 Billion Tesla Pay Package

Author: Ram Sharma

Sunday, June 9, 2024

The controversial pay package, which was initially approved in 2018, was later invalidated by a Delaware judge earlier this year. The judge deemed the compensation as an “unfathomable sum” and unfair to shareholders. Despite the wealth fund’s appreciation of the significant value Musk has generated since the grant date in 2018, it has expressed serious concerns over the size and structure of the award.

Norges Bank Investment Management (NBIM), which operates the fund, stated, “We remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk.” This mirrors the fund’s stance in 2018 when it initially voted against the package.

The wealth fund has a history of opposing excessive CEO pay. Last year, it voted against more than half of U.S. CEO pay packages exceeding $20 million, arguing that they did not align with long-term value creation for shareholders.

Norway Wealth Fund to Vote Against Elon Musk's
Norway Wealth Fund to Vote Against Elon Musk’s

Concerns Over Labour Rights

The fund’s opposition is not limited to Musk’s pay package. It is also advocating for improved labour practices at Tesla. The wealth fund will vote for a shareholder proposal urging Tesla to adopt a policy on freedom of association and collective bargaining. This proposal is significant as Tesla faces ongoing industrial action in Sweden. Tesla mechanics have been on strike since October 27, marking one of Sweden’s longest labour disputes.

In 2022, the fund supported a similar proposal, calling on Tesla to respect labour rights. This came in response to Tesla’s refusal to meet demands from Swedish mechanics for collective bargaining rights covering wages and other conditions. The wealth fund’s stance highlights a broader trend in the Nordic region, where unions and pension funds are increasingly pressuring Tesla over its labour practices.

Move to Texas

Another major topic at the upcoming shareholder meeting is the proposal to transfer Tesla’s state of incorporation from Delaware to Texas. This move comes after the Delaware judge invalidated Musk’s pay. The wealth fund has indicated it will vote in favour of this proposal, aligning with Musk’s interests.

Re-election of Directors

In addition to Musk’s pay and labour rights, the wealth fund will also vote on the re-election of Tesla directors, including Elon Musk’s younger brother, Kimbal Musk. Kimbal, 51, is up for re-election to Tesla’s board of directors. The fund supported his election in 2018 and plans to do so again this year.

Broader Implications

Norway’s sovereign wealth fund, which owns 1.5% of all the world’s listed stocks, plays a significant role in corporate governance. Its decisions on Tesla’s shareholder votes will have broader implications for discussions about executive compensation, labour rights, and corporate governance.

By voting against Musk’s pay package, the fund is sending a strong message about the need for fair and reasonable executive compensation. Additionally, its support for improved labour practices at Tesla underscores the importance of corporate responsibility towards workers.

Also Read:-

Ram Sharma
Ram Sharma holds a BBA degree and brings his business acumen to With a strong foundation in business administration, Ram provides readers with insightful articles and practical advice on various aspects of the business world. His dedication to helping others understand and navigate the complexities of business makes him a valuable resource for students and professionals alike.

Leave a Comment