A Delaware judge nullified Tesla CEO Elon Musk’s $56 billion compensation plan earlier this year. Next week, shareholders will have the opportunity to vote on ratifying Musk’s deal, which Norway’s $1.7 trillion sovereign wealth fund announced on Saturday it will not support.

Based on LSEG statistics, the fund ranks as the seventh largest shareholder in Tesla.

Musk received the highest salary of any CEO in the United States when it was granted in 2018, but a court revoked it earlier this year, citing the figure as “unfathomable” and declaring it to be unjust to shareholders.

According to the fund, “the significant value generated under Mr. Musk’s leadership since the grant date in 2018” is much appreciated.

However, the fund’s operator, Norges Bank Investment Management (NBIM), stated that “we remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk.”

The fund had voted against the deal in 2018.

“On this and other topics, we will continue to seek constructive dialogue with Tesla,” NBIM stated.

According to fund statistics, the fund, which has a $7.7 billion holding value of 0.98%, has expressed disapproval of CEO compensation that is too high.

It warned that more than half of U.S. CEO pay deals over $20 million did not fit with long-term value creation for shareholders when it voted against them last year.

The fund also said that it will support a shareholder motion that demands that Tesla implement a policy of freedom of association and collective bargaining, a victory for labour unions looking to increase their clout with the American automaker.

The vote takes place at a time when Tesla is still embroiled in a labour issue in Sweden, where its mechanics have been on strike since October 27.

1.5% of all listed equities worldwide are owned by Norway’s wealth fund, which in 2022 supported a shareholder petition urging Tesla to implement a policy upholding labour rights such collective bargaining and freedom of association.

The maker of electric vehicles is under criticism from unions and certain pension funds in the Nordic area for turning down the demand of its Swedish mechanics for the ability to collectively negotiate over salaries and other conditions.

After a Delaware judge nullified Musk’s compensation, the wealth fund opted to move the EV maker’s state of incorporation from Delaware to Texas.

Additionally, the fund declared that it would support a motion to appoint Musk’s 51-year-old younger brother Kimbal to the Tesla board of directors. Fund statistics showed that the fund had supported his candidature in 2018.

At their annual meeting in June, Tesla shareholders will vote on Musk’s compensation as well as the re-election of directors, including Musk’s brother.

(Adapted from MoneyControl.com)