Yahoo Finance Tesla gears up for shareholder vote this week on CEO Musk's $56 billion pay deal
Investing.com -- Shares in Tesla (NASDAQ:TSLA) were marginally lower in premarket trading on Monday, as the electric vehicle maker prepares to hold a key shareholder vote on Chief Executive Elon Musk's pay package later this week.
Over the weekend, Norway's sovereign wealth fund revealed that it will vote against Musk's massive $56 billion pay package at a stakeholder meeting slated for June 13.
Norges Bank Investment Management, a fund worth $1.7 trillion and Tesla's eighth-largest stakeholder, flagged several concerns over the deal, including the scale of the proposal -- reportedly the biggest in U.S. corporate history.
"While we appreciate the significant value generated under Mr. Musk's leadership since the grant date in 2018, we remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk," NBIM said.
The fund, which previously voted against the pay package in 2018, added that it will "continue to seek constructive dialogue" with Tesla on the matter.
In a post on X, Musk said NBIM's decision to vote against his pay deal was "not cool," adding "[i]f they actually surveyed their constituents, they would discover overwhelming support in favor."
Meanwhile, NBIM said it would vote for a shareholder proposal supporting trade union rights. Tesla, which is opposed to the measure, is engaged in a long-running dispute with unions in Sweden over the company's collective bargaining policy.
NBIM, however, said it would vote in favor of Tesla's plan to change its state of incorporation to Texas from Delaware, a change that Musk put forward after a judge in Delaware voided his compensation package earlier this year. The fund also said it would back the election of Musk's brother Kimbal to Tesla's board of directors.
In a note to clients, analysts at Barclays said NBIM's announcement, which comes after similar recommendations from proxy advisors ISS and Glass Lewis, increases the risk that shareholders will not ratify Musk's compensation plan. But they said their "base assumption" remains that the plan will be passed.
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