LDN - Business

Tesla investor, Norway's KLP, to support collective bargaining motion at EV maker's annual meeting

[June 04, 2024] By Gwladys Fouche

OSLO (Reuters) - Tesla investor KLP, Norway's largest pension fund, will vote in favour of a shareholder proposal urging the U.S. electric vehicle maker to engage in wage and other labour negotiations as it continues to face industrial action in Sweden.

A strike by Tesla mechanics in Sweden, among the country's longest labour disputes, has since Oct. 27 disrupted operations, spurring the concern of Nordic institutional investors and sympathy strikes in the Nordic region.

Tesla will hold its annual general meeting on June 13.

On the agenda is a proposal by four institutional investors calling on Tesla "to adopt a policy explicitly committing to non-interference and good faith bargaining ... with respect to freedom of association and collective bargaining".

"We will support the proposal," Kiran Aziz, KLP's head of responsible investments, told Reuters. "We hope (it) will gain significant support from other shareholders too."

KLP holds 900,000 Tesla shares worth some 1.7 billion crowns ($162 million), a stake of about 0.02% as of late February, according to LSEG Workspace data. Last summer, it removed Tesla shares from its sustainable funds.

STANCE ON UNIONS COULD BE UNDERMINED

Sweden's AMF pension fund will back the motion as well, and was "actively working" to get other investors to support it.

"The freedom of association ... and the right to bargain collectively are fundamental human rights that are protected by international norms," it said in a May 17 statement.

The conflict could have wider repercussions for Tesla, whose tough stance globally on unions could be undermined if it buckles in Sweden.

Tesla did not immediately respond to a request for comment.

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Emma Hansson, chairman of IF Metall Stockholms lan, stands on strike outside Tesla's Service Center in Segeltorp, as workshop workers at the electric car company Tesla have gone on strike demanding that the company sign a collective agreement, in Stockholm, Sweden, October 27, 2023. Jessica Gow/TT News Agency/via REUTERS/File Photo

KLP will also vote against a proposed plan to relocate Tesla to Texas from Delaware, and against ratifying a $56-billion pay package for CEO Elon Musk.

"We do not find the rationale (for the move to Texas) sufficiently strong and convincing," Aziz said, referring to Tesla describing Texas as its "home" and the state where one of its top factories is located.

"It is not clear what tangible benefits the relocation would bring, whereas there is clearly additional costs and potential risks that may come with it," she said, without elaborating on those risks.

As for Musk's pay package, "We have voted against it back in 2018 when it was introduced, and we continue to see it as being both excessive and leading to extensive dilutive effects to current shareholders," Aziz said.

In April, Tesla reported its first fall in quarterly revenue since 2020 to $21.3 billion in the three months through March, compared with $23.33 billion a year earlier. Analysts on average had estimated $22.15 billion, according to LSEG data.

($1 = 10.4875 Norwegian crowns)

(Editing by Bernadette Baum)

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