Norwegian fund against Musk's 56 billion salary, the highest in history

Norway's sovereign wealth fund will vote against the $56 billion payout to Tesla CEO Elon Musk ahead of next week's annual general meeting. Bloomberg reports this, pointing out that the fund owned a 0.98% stake in Tesla worth $7.72 billion at the end of 2023.
"We remain concerned about the total size of the award, the structure given to the performance factors," highlights Norges bank investment management. The decision is 'consistent with our vote on the same award in 2018', the fund further explains, adding that it will 'continue to dialogue constructively with Tesla on this and other issues'. A $56 billion salary would make Musk the highest paid CEO in modern history, further cementing his position among the richest men on the planet.

The Norwegian fund's position is in line with that of other shareholders, including the US fund Calvert, which made its vote known at the shareholders' meeting. Calvert, in fact, believes that the 'value of the premium remains excessive, even considering the company's success'. These positions reflect the indications of proxy advisors, the analyst firms specialising in advising investors on how to vote at shareholder meetings. Proxy advisor Glass Lewis, for example, made his recommendation, citing the 'excessive size' of the remuneration agreement.

Tesla responded to Glass Lewis' recommendation by stating that the proxy 'omits key considerations, uses faulty logic and is based on speculation and assumptions'. A rejection at the shareholders' meeting of the CEO's remuneration, even if only advisory, could embarrass Elon Musk so much that, according to market rumours, he could bid farewell to his creature.

In a letter to shareholders in recent days, Tesla president Robyn Denholm explained that the ceo's massive payout, which basically consists of a ten-year stock award plan, serves "to keep Elon's focus and motivate him to focus on achieving amazing growth for our company".
The agreement on Elon Musk's remuneration was originally drawn up in 2018, but Delaware court judges quashed it earlier this year, saying investors had not been fully informed of key details.

The controversy surrounding Elon Musk's remuneration comes at a delicate time for Tesla, particularly with regard to a number of initiatives that look to the future of the group. In particular, the market is looking at the low-cost vehicle project and the development of autonomous driving technology. Tesla is 'going through a difficult period of growth and so we need to be patient', financial analysts explain. 'We expect the 2018 package to be re-approved,' he adds, 'while the Delaware court ruling may become outdated as Tesla will now move to Texas.
The proposal to move Tesla's headquarters from Delaware to Texas, however, does not appear particularly opposed. Chairwoman Denholm urged shareholders to vote in favour because it 'provides a better platform for innovation, as legislators and courts are in a better position to make decisions on how corporate law applies to companies'. On this point, both the US fund Calvert and the Norwegian sovereign wealth fund, which also called on Tesla to adopt new policies on contracting, expressed their favourable opinion. Now we will have to wait until 13 June to find out who will win the battle over Elon Musk's maxi salary.