Norway’s sovereign wealth fund, the world's largest, has announced its decision to vote against a proposed compensation package for Tesl...
Norway’s sovereign wealth fund, the world's largest, has announced its decision to vote against a proposed compensation package for Tesla CEO Elon Musk that is potentially valued at up to $1 trillion. The fund, managed by Norges Bank Investment Management (NBIM) and one of Tesla's largest shareholders, publicly disclosed its opposition ahead of the company's annual shareholder meeting on Thursday.
The rejection marks the first major institutional investor to take a public stand against the record-breaking deal, which has drawn intense scrutiny from corporate governance experts and shareholder advisory firms.
In a statement, the fund cited three key concerns for its decision: the total size of the award, potential dilution for existing shareholders, and a lack of mitigation for key person risk. The fund stated, "While we appreciate the significant value created under Mr. Musk's visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk—consistent with our views on executive compensation."
The proposed pay package is tied to aggressive performance milestones that would see the electric vehicle maker's market capitalization grow to a staggering $8.5 trillion. Tesla’s board, which is urging shareholders to approve the package, has argued that the deal is crucial for retaining Musk’s leadership, with Chair Robyn Denholm warning that the CEO could leave the company if the package is rejected.
The $2.1 trillion Norwegian fund, which holds a substantial stake in the automaker, has a history of opposing excessive executive pay and previously voted against Musk's $56 billion compensation plan that a Delaware court later rescinded. Proxy advisory firms ISS and Glass Lewis have also recommended a vote against the new package, further intensifying the shareholder debate.
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