Changes in the Norwegian Sovereign Wealth Fund at shareholder meetings of companies such as Tesla

According to the Wise Finance APP, the Norwegian Sovereign Wealth Fund, with a scale of $1.7 trillion, recently signaled a significant change in the way it defends its voting decisions at the shareholder meetings of Tesla (TSLA.US), Exxon Mobil (XOM.US), and Shell (SHEL.US). The fund has now begun to more deeply explain its voting methods at the shareholder meetings of a few companies, including the logic behind the votes.

Carine Smith Ihenacho, Chief Governance and Compliance Officer of the Norwegian Sovereign Wealth Fund, stated: "It is important that as investors, we stand up to explain our thoughts." It is reported that the fund holds shares in over 8,800 companies globally and has been increasing its efforts to use voting as a tool to influence corporate governance, especially on issues related to climate change, board gender diversity, and executive compensation.

At the Tesla shareholder meeting on Thursday, the Norwegian Sovereign Wealth Fund voted against CEO Elon Musk's $56 billion compensation plan. In fact, prior to the Tesla shareholder meeting, the sovereign wealth fund had explicitly stated its intention to vote against Musk's compensation plan. Back in 2018, the fund had also voted against the same compensation plan.

The Norwegian Sovereign Wealth Fund appreciated that "since the award of this compensation plan in 2018, Tesla has generated significant value under Musk's leadership." However, the fund's operator, Norges Bank Investment Management (NBIM), stated: "Nevertheless, we remain concerned about the total size of the compensation, the structure of performance trigger mechanisms, equity dilution, and the lack of mitigation of key person risk."

Earlier, NBIM released more information explaining why it opposed the appointment of Joseph Hooley as a director of Exxon Mobil after the company sued ESG shareholders. Additionally, the fund encouraged Shell to further clarify its relaxed climate targets. The fund also plans to align with Shell's management proposals and vote against an independent resolution proposed by some investors aimed at aligning Shell's mid-term Scope 3 emissions targets with the goals of the Paris Climate Agreement.

The Norwegian Sovereign Wealth Fund has been submitting its own shareholder proposals since last year. Carine Smith Ihenacho stated that out of three shareholder proposals submitted in 2024, two were withdrawn, and one proposal called for U.S. pipeline operator Kinder Morgan to set greenhouse gas emission reduction targets.

Carine Smith Ihenacho said: "We believe that submitting well-considered, well-worded, and reasonable shareholder proposals is a fundamental right of shareholders." She mentioned that the process of submitting proposals requires significant resources, and the fund may "prioritize" future climate-related issues.

NBIM holds an average of 1.5% of the shares of all listed companies globally. According to the European Corporate Governance Institute (ECGI), in a working paper released last December, by disclosing voting intentions in advance, the fund has "shifted from formulating ownership policies to encouraging their adoption." The report found that NBIM's pre-disclosed "vote against" resulted in an average increase of 2.7% for other shareholders holding the same views