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The world’s largest sovereign wealth fund has said it will vote against the $56 billion pay award given to Elon Musk at Tesla, as the largest pay package in US corporate history comes under intense scrutiny from shareholders.
The $1.7 trillion Norwegian oil fund, Tesla’s eighth-largest shareholder, said on Saturday it was “concerned” about the size of the pay package, its structure and how it fails to mitigate “key people risk.”
Tesla shareholders will vote on the award on Thursday, after a Delaware judge overturned it in January, calling it “an unfathomable sum.”
The Norwegian fund owns about 1 percent of teslaworth about $8 billion by the end of 2023. He voted against the pay package when it was first proposed in 2018 and said his stance had not changed.
Both ISS and Glass Lewis, the two largest proxy advisors, have also recommended shareholders reject Musk’s pay package.
The oil fund has taken an increasingly active line against pay packages, particularly in the United States, where it has voted against more than half of all concessions over $20 million. Last year, it voted against pay deals at some of its largest holdings, including Apple, Google owner Alphabet, and LVMH.
“We are seeing corporate greed reach a level that we have not seen before and it is really becoming very costly for shareholders in terms of dilution,” Nicolai Tangen, the fund’s chief executive, said in 2022.
The Norwegian fund said it would “seek a constructive dialogue with Tesla regarding [pay] and other issues,” and that he appreciated “the significant value generated under Mr. Musk’s leadership.”
He said he would vote in favor of Tesla moving its incorporation from Delaware to Texas, a move that was proposed as a result of Musk’s fury over the judge’s pay decision.
The pay package, which was subject to Musk significantly increasing Tesla’s share price, was awarded in 2018 as the electric car maker was struggling to produce vehicles at scale.
The Norwegian fund also said it would vote in favor of a shareholder proposal supporting union rights, which Tesla opposes. Tesla is embroiled in a bitter and long-running fight with Sweden’s unions over its refusal to recognize collective bargaining in the Scandinavian country.
tesla has said previously that the pay concession has driven “more than $735 billion in value creation” and expressed confidence that its shareholders would “honor the deal they approved in 2018.”