OSLO >> Norway’s $1.7 trillion sovereign wealth fund said today it will vote against ratifying Tesla CEO Elon Musk’s $56 billion pay package, which is up for a shareholder vote next week, after a Delaware judge invalidated it earlier this year.

The fund is Tesla’s eighth-biggest shareholder, according to LSEG data.

Musk’s pay, the largest for a chief executive in corporate America, was approved in 2018, but voided by a judge earlier this year, who said the amount was unfair to shareholders, calling it an “unfathomable sum.”

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

Still, “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 Bank Investment Management (NBIM), the operator of the fund said.

In 2018, the fund had voted against the package.

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

The fund, which holds a 0.98% stake worth $7.7 billion according to fund data, has been critical of excessive CEO pay.

Last year it voted against more than half of U.S. CEO pay packages above $20 million, warning they did not align with long-term value creation for shareholders.

UNIONS

The fund also said it would vote for a shareholder proposal calling on Tesla to adopt a freedom of association and collective bargaining policy, a win for labor unions seeking to assert their influence over the U.S. carmaker.

The vote comes as Tesla continues to face industrial action in Sweden, with its mechanics on strike since Oct. 27, in one of the country’s longest labor disputes.

Norway’s wealth fund, which owns 1.5% of all the world’s listed stocks, also in 2022 backed a shareholder proposal calling on Tesla to adopt a policy of respecting labor rights such as freedom of association and collective bargaining.

The electric vehicle producer faces a backlash in the Nordic region from unions and some pension funds over its refusal to accept the demand from its Swedish mechanics for collective bargaining rights covering wages and other conditions.

TEXAS

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

The fund also said it would vote for a proposal to elect Musk’s younger brother Kimbal, 51, to Tesla’s board of directors. The fund had voted in favor of his election in 2018, according to fund data.

Tesla shareholders will vote on Musk’s pay, as well as the re-election of directors, including Musk’s brother, at their annual meeting scheduled on June 13.