OSLO, June 8 (Reuters) - Norway's $1.7 trillion

sovereign wealth fund said on Saturday 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.

Responding to a post on social media platform X, Musk said

the fund's decision is "not cool", adding that if the fund

actually surveyed the constituents, they would discover

"overwhelming support in favour."

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 labour unions seeking to

assert their influence over the U.S. car maker.

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 labour 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 labour 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 favour 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.