ABP sells Tesla stake over disagreement with Musk record pay
Europe largest pension fund ABP sells entire Tesla stake
Stichting Pensioenfonds ABP, Europe’s largest pension fund, has sold its entire €571 million ($585 million) stake in Tesla Inc. during the third quarter of 2024, citing disagreement with Elon Musk’s record-breaking compensation package.
A spokesperson for the Dutch pension fund confirmed the decision on Sunday, noting additional considerations such as return on investment, costs, and responsible investment requirements, reports Bloomberg.
The move follows years of scrutiny over Musk’s controversial pay structure, which has faced both shareholder backlash and legal challenges. Last month, a Delaware judge invalidated Musk’s stock options package, initially valued at $2.6 billion and surging to $56 billion, even after shareholders had approved it.
Concerns Extend Beyond Pay
ABP’s decision was also influenced by broader concerns about Tesla’s operations. Poor working conditions at the company were among the reasons for the divestment. While ABP has not elaborated on these concerns, the pension fund emphasized that responsible investment practices are central to its decision-making process.
This marks a significant step for ABP, which manages assets worth over €500 billion. The fund has been increasingly aligning its portfolio with environmental, social, and governance (ESG) standards, which prioritize ethical and sustainable investments.
Broader Implications for Tesla
The sale underscores growing tensions between institutional investors and Tesla’s corporate governance practices. Musk’s pay package, designed to incentivize growth through ambitious targets, has drawn criticism for being excessive, even as Tesla has delivered strong financial performance in recent years.
ABP’s divestment highlights the challenges Tesla faces in meeting the expectations of socially conscious investors. As ESG standards continue to shape investment strategies, Tesla may encounter heightened pressure to address governance and labor issues.
Recently we wrote, that Elon Musk’s recent change to his X account name to "Kekius Maximus" has set off a firestorm of speculation in the cryptocurrency world.
