Tesla owner Elon Musk faces a new hurdle as Norway’s $1 trillion sovereign wealth fund has announced it will vote against his proposed pay deal with Tesla.
Norges Bank, the fund’s operator and Tesla’s seventh-largest shareholder with a $17 billion stake, issued its decision ahead of Tesla’s annual shareholder meeting.
The world’s largest national wealth fund said that while it recognized “the significant value created under Musk’s visionary role,” it could not support the performance award.
“We are concerned about the overall size of the compensation, dilution and failure to mitigate key person risk consistent with our views on executive compensation,” the fund said. “We will continue to seek constructive dialogue with Tesla on this and other issues.”
Norges Bank, the fund’s operator and Tesla’s seventh-largest shareholder with a $17 billion stake, issued its decision ahead of Tesla’s annual shareholder meeting.
On Thursday, investors will vote on a proposed $1 trillion incentive package that could make Musk the world’s first billionaire. If he increases Tesla’s value from about $1 trillion to $8.5 trillion within a decade, he would gain new shares, increasing his ownership from nearly 16% to more than 25%.
The plan could raise the billionaire’s net worth to more than $2 trillion.
Tesla Chairman Robyn Denholm defended the proposal and said it is vital to retain Musk as CEO. In a letter to shareholders, he warned that the company could lose “significant value” if he resigned.
Last year, the Norwegian oil fund also voted against what was then the largest pay deal in U.S. corporate history, a $56 billion package for Musk. Although shareholders approved it in June, a Delaware court blocked the deal in December.
Nicolai Tangen, the fund’s chief executive, invited Musk and other corporate leaders to dinner in Oslo last year. Musk refused after the fund objected to his pay deal. According to a text exchange obtained through a freedom of information request, Musk told Tangen: “When I ask you for a favor that I rarely do and you decline, then you shouldn’t ask me for one until you’ve done something above nothing to make amends. Friends are like friends.”
Shareholders remain divided over the new package. Influential advisory firms Glass Lewis and ISS have urged investors to reject it, while major pension funds, including the American Federation of Teachers and the California Public Employees’ Retirement System, have also expressed opposition.
Musk, Tesla’s largest individual shareholder, can vote on the proposal.
Last month, he posted on
Tesla has not yet commented on the fund’s stance.
(The UK Guardian)
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