Norway’s sovereign wealth fund has revealed it will again vote against a huge compensation package for Tesla chief executive officer Elon Musk at this Thursday’s annual general meeting (AGM) of the US electric vehicle maker.
Norges Bank Investment Management (NBIM), which runs the NOK21trn (€1.8trn) Government Pension Fund Global (GPFG), published its voting intentions for the Tesla AGM, revealing it would vote against the $1trn (€871bn) pay deal for Musk and the two other proposals which Tesla’s management has flagged as key for the company’s future.
The GPFG had $11.7bn of Tesla stock at the end of June, equating to 1.14% of the voting capital.
Explaining its rationale for voting against proposal four, to “approve issuance of common stock to Elon Musk pursuant to CEO performance award”, NBIM said: “While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk – consistent with our views on executive compensation.”
“We will continue to seek constructive dialogue with Tesla on this and other topics,” NBIM added.
The Oslo-based SWF manager also said it would vote against management proposals 1a to elect director Ira Ehrenpreis, and 1c, to elect director Kathleen Wilson-Thompson, but vote in favour of proposal 1b, to elect director Joe Gebbia.
Regarding proposal three, “Amend Omnibus Stock Plan”, NBIM said it would vote against.
In its literature around the upcoming AGM, Tesla management has urged shareholders in hyperbolic language to support proposals one, three and four, saying: “Tesla is at a pivotal juncture and these proposals are critical to securing the Company’s future.”
They said they believed Tesla was “on the precipice of another massive wave of transformational growth,” having “recently unveiled Master Plan Part IV, which aims to set us on a path toward Sustainable Abundance, improving humanity for all.”
“To support this vision, we must retain and incentivise Elon Musk and maintain a strong corporate governance structure that will enable us to continue our exceptional performance and create staggering amounts of shareholder value,” the company said.
NBIM’s rejection a year ago of a huge pay package at Tesla for Musk led to a personal rebuke from the Tesla CEO to NBIM CEO Nicolai Tangen in a text message exchange, which subsequently became public causing a furore in Norway and embarrassment for Tangen.
Proxy firms Glass Lewis and ISS have both recommended that Tesla shareholders vote against the proposed $1trn pay package for Musk on Thursday, according to Reuters.
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