Nordic Tesla shareholders seek to promote workers' rights in voting

The dispute over Elon Musk's pay package and the vote on whether to move Tesla's headquarters to Texas were in focus ahead of the company's shareholder meeting on Thursday, but not for Nordic investors.

Tesla's major shareholders in Sweden, Denmark and Norway instead expect the meeting to bring the issue of workers' rights to the forefront at the automaker.

Behind the campaign is the Tesla mechanics strike in Sweden. Now in its sixth month, the dispute has attracted unions across the region who have banded together in blocs aimed at bringing the US automaker to the negotiating table to reach a collective agreement with its Swedish workers.

Many of the Nordics' largest shareholders are urging others to support a proposal that would require Tesla to respect workers' right to assembly.

Tesla did not respond to a request for comment. He has remained resistant to unions in Europe, even in countries with strong traditions of organized labor. Musk has expressed his disdain for organized labor. “I don't agree with the idea of ​​unions,” he said last year at the DealBook Summit in New York.

None of Tesla's factories are unionized, potentially giving the company an advantage over rivals such as Ford Motor, General Motors and Volkswagen that must pay union wages. But in the United States, Tesla is a prime target for the United Automobile Workers union, which is in a strong position after recently winning the largest pay raises in years for workers at unionized plants.

The proposal voted on Thursday was put forward by Folksam Group, a Swedish insurance company, along with a Canadian pension fund and U.S. equity funds. Together they call on Tesla's board of directors to adopt a policy that commits to “non-interference and bargaining in good faith in accordance with internationally recognized human rights standards with respect to freedom of association and collective bargaining,” according to a filing at the United States Securities and Exchange. Commission.

Among those backing the proposal, which will be voted on Thursday, is KLP, Norway's largest pension fund, which holds 900,000 Tesla shares worth about 1.7 billion Norwegian kroner, or $162 million.

“We, as long-term investors, expect the companies we invest in to adhere to the highest international standards in their business operations, particularly when operating across the globe where standards may vary from country to country,” said Kiran Aziz , Head of Responsible Investments at KLP.

The Norwegian fund was one of several Nordic investors to send a letter to Tesla management last year addressing the issue of workers' rights.

Despite the strike and campaign by Nordic shareholders, Musk enjoys a strong following among many of Sweden's most tech-savvy motorists. While the majority of Swedes have expressed support for the strike, many are fans of Musk. Tesla sold 20,400 cars in Sweden last year and the Model Y is the country's best seller.

Tesla mechanics who are members of the IF Metall union quit their jobs at the end of October. Dozens of people continue to strike and the union has picketed company factories across Sweden.

The union claims that Tesla is violating the Swedish tradition of collective agreements. Around 90% of Swedish workers are covered by these agreements, which also apply to non-union employees and establish working conditions in all sectors.

Tesla has refused to engage in the collective bargaining process that establishes such an agreement, arguing that the company pays its workers competitively and complies with local labor laws.

This has not stopped the union from mobilizing more than a dozen other trade union organizations to support its side through solidarity measures, permitted by Swedish law. For several months, workers in other industries have refused to provide Tesla with services ranging from unloading cars at ports to waste removal to delivering new license plates.

Last month, Sweden's largest union, Unionen, joined the initiative by striking workers who carry out equipment inspections for the company.

Tesla has so far found workarounds and has managed to continue its business without significant disruption to customers.

KLP, Norway's pension fund, also said it would vote against Musk's $46.5 billion pay package. While the pay vote is unrelated to the labor dispute, the fund said “the total value of the award remains excessive” despite Tesla's significant growth. KLP also voted against the pay package in 2018.

Major shareholders appear divided on whether to support the compensation package, which was struck down by a Delaware court judge in January. Tesla is now asking shareholders to approve the pay package, and Musk has been lobbying shareholders for support on social media platform X, which he owns.

Reacting to a post by Musk urging small investors to be able to vote, some Swedish retail brokerage firms broke with tradition in Europe by saying they would allow their clients to cast votes at Thursday's annual general meeting, after received requests to do so.

“We always want to do our best to satisfy the requests of our customers and this time we have decided to make an exception and allow them to vote in this specific annual general meeting of Tesla,” said Sofia Svavar, spokeswoman for Avanza, a Online bank based in Stockholm.

Jack Ewing contributed to the reporting.

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