By Louise Rasmussen and Gwladys Fouche

OSLO (Reuters) -Norway’s $1.7 trillion sovereign wealth fund mentioned on Saturday it’ll vote in opposition to ratifying Tesla (NASDAQ:) CEO Elon Musk’s $56 billion pay bundle, which is up for a shareholder vote subsequent week, after a Delaware choose invalidated it earlier this yr.

The fund is Tesla’s eighth-biggest shareholder, in accordance with LSEG knowledge.

Musk’s pay, the biggest for a chief govt in company America, was accredited in 2018, however voided by a choose earlier this yr, who mentioned the quantity was unfair to shareholders, calling it an “unfathomable sum”.

The fund mentioned it appreciated “the significant value generated under Mr. Musk’s leadership since the grant date in 2018”.

Nonetheless, “we remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk,” Norges Financial institution Funding Administration (NBIM), the operator of the fund mentioned.

In 2018, the fund had voted in opposition to the bundle.

“We will continue to seek constructive dialogue with Tesla on this and other topics,” NBIM added.

The fund, which holds a 0.98% stake value $7.7 billion in accordance with fund knowledge, has been crucial of extreme CEO pay.

Final yr it voted in opposition to greater than half of U.S. CEO pay packages above $20 million, warning they didn’t align with long-term worth creation for shareholders.

UNIONS

The fund additionally mentioned it might vote for a shareholder proposal calling on Tesla to undertake a freedom of affiliation and collective bargaining coverage, a win for labour unions in search of to say their affect over the U.S. carmaker.

The vote comes as Tesla continues to face industrial motion in Sweden, with its mechanics on strike since Oct. 27, in one of many nation’s longest labour disputes.

Norway’s wealth fund, which owns 1.5% of all of the world’s listed shares, additionally in 2022 backed a shareholder proposal calling on Tesla to undertake a coverage of respecting labour rights reminiscent of freedom of affiliation and collective bargaining.

The electrical car producer faces a backlash within the Nordic area from unions and a few pension funds over its refusal to just accept the demand from its Swedish mechanics for collective bargaining rights overlaying wages and different situations.

TEXAS

The wealth fund voted for transferring the EV maker’s state of incorporation to Texas from Delaware, a vote Musk wanted the Delaware choose invalidated his pay.

The fund additionally mentioned it might vote for a proposal to elect Musk’s youthful brother Kimbal, 51, to Tesla’s board of administrators. The fund had voted in favour of his election in 2018, in accordance with fund knowledge.

Tesla shareholders will vote on Musk’s pay, in addition to the re-election of administrators, together with Musk’s brother, at their annual assembly scheduled on June 13.