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Tesla mechanics in Sweden have been striking since Oct. 27

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Sweden's AMF fund will also support proposal

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KLP will oppose relocation of Tesla to Texas

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KLP will oppose ratifying Elon Musk's $56-bln pay package

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Annual meeting is set for June 13

By Gwladys Fouche

OSLO, June 4 (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.

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)