Casting a kink in the high-profile proceedings slated for Tesla’s annual meeting this Thursday, Norway’s mammoth sovereign wealth fund, the Government Pension Fund Global, operated by Norges Bank Investment Management, announced its intent to negate Elon Musk’s colossal CEO compensation package, on Saturday. This audacious move manifests as another thread in the fabric of dissatisfaction currently clouding the CEO’s proposed pay, an amount most recently pegged by Tesla officials at 44.9 billion dollars, but deemed to have value close to 56 billion dollars in January.
In the face of steadfast opposition from heavyweight shareholder authorities ISS and Glass Lewis, who rallied against the proposed package earlier in May, Norges Bank Investment Management remains far from assuaged. The fund affirmed its concern over the scale of Mr. Musk’s payoff, with concerns centered on its overt size, precarious structure in conjunction with performance triggers, dilution considerations, and the loom of key person risk in the tinted backdrop of Tesla’s financial venture.
Norges Bank underscored its stance through a bold statement made on its website, shedding light on their inability to ignore the monumental value generated under Mr. Musk’s guidance since the inception of the grant in 2018, but simultaneous apprehension over the hefty burden of the proposed compensation. However, they too signaled a willingness to engage in dialogue with Tesla concerning the predicament.
Earlier this year, a Delaware judge had discarded Musk’s pay package, eliciting a plea from Tesla for its shareholders to reinstate the same. The Government Pension Fund Global, which holds a near 1 percent stake in Tesla estimated at around 7.72 billion dollars, had originally rejected the package back in 2018.
Functioning as a safety net securing pensions for generations of Norwegians, the fund taps from the reserves of the nation’s oil and gas industries. Currently valued at a massive 1.67 trillion dollars, or 17.80 trillion Norwegian Krone, the Government Pension Fund Global represents a behemoth in the financial world. A stark testament to its enormity is its conscious decision to venture beyond national frontiers to curb potential overheating of Norway’s economy. Currently, the fund’s investments span seventy-two nations worldwide.
In a twist of events, the fund has also voiced intent to support various policies shunned by Tesla’s management. These include the adoption of a non-interference policy respecting the freedom of association and collective bargaining, implementing a simple majority vote, declassifying the board of directors and the production of documents chronicling efforts to combat harassment and discrimination.
