Unlock the Editor’s Digest at no cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
The world’s largest sovereign wealth fund has stated it’s going to vote towards Elon Musk’s $56bn pay award at Tesla, as the most important remuneration package deal in US company historical past comes below intense shareholder scrutiny.
Norway’s $1.7tn oil fund, the eighth largest shareholder in Tesla, stated on Saturday that it was “involved” concerning the measurement of the pay package deal, its construction and the way it fails to mitigate “key particular person threat”.
Tesla shareholders will vote on the award on Thursday, after a decide in Delaware struck it down in January, calling it “an unfathomable sum”.
The Norwegian fund owns about 1 per cent of Tesla, price about $8bn on the finish of 2023. It voted towards the pay package deal when it was first proposed in 2018, and stated its stance had not modified.
Each ISS and Glass Lewis, the 2 largest proxy advisers, have additionally really helpful shareholders reject Musk’s pay package deal.
The oil fund has taken an more and more lively line towards pay packages, significantly within the US, the place it has voted towards greater than half of all awards of greater than $20mn. Final 12 months, it voted towards pay offers at a few of its greatest holdings together with Apple, Google proprietor Alphabet and LVMH.
“We’re seeing company greed reaching a degree that we haven’t seen earlier than and it’s actually changing into very expensive for shareholders when it comes to dilution,” Nicolai Tangen, the fund’s chief government, stated in 2022.
The Norwegian fund stated it will “search constructive dialogue with Tesla on [pay] and different subjects”, and that it appreciated “the numerous worth generated below Mr Musk’s management”.
It stated it will vote in favour of Tesla shifting its incorporation from Delaware to Texas, a transfer that was proposed because of Musk’s fury on the decide’s pay determination.
The pay package deal — which was topic to Musk rising Tesla’s share value considerably — was awarded in 2018 when the electrical carmaker was struggling to supply automobiles at scale.
The Norwegian fund additionally stated it will vote in favour of a shareholder proposal backing commerce union rights, which Tesla opposes. Tesla is embroiled in a bitter and long-lasting combat with commerce unions in Sweden over its refusal to recognise collective bargaining within the Scandinavian nation.
Tesla has beforehand stated that the pay award has pushed “greater than $735bn in worth creation” and expressed confidence that its shareholders would “honour the deal they authorised in 2018”.
