The world’s largest sovereign wealth fund votes against Elon Musk’s compensation package, citing concerns over size, dilution, and key person risk.
Norway’s sovereign wealth fund, the world’s largest with $2 trillion in assets, has cast its vote against Elon Musk’s proposed $1 trillion compensation package as Tesla CEO. Norges Bank Investment Management, which holds a 1.14% stake in Tesla worth $11.6 billion, announced its opposition on Tuesday ahead of the company’s shareholder meeting this week. The fund’s managers acknowledged Musk’s visionary leadership and the significant value he has created, but expressed deep concerns about the total size of the award, the dilution it would cause to existing shareholders, and the lack of mitigation for key person risk.
The proposed pay plan would grant Musk nearly $1 trillion in stock options contingent on Tesla hitting certain milestones over the next decade. It would also expand his voting powers at the company. This is not the first time Norway’s wealth fund has clashed with Musk over compensation. Last year, the fund voted against reinstating his $56 billion pay deal after it was rescinded by a U.S. judge, though shareholders ultimately approved it anyway.
The tension between Musk and the fund’s leadership has been public and personal, with The Guardian reporting text messages showing the Tesla CEO declining a dinner invitation and suggesting the fund owed him amends for their opposition.
The community of observers and investors has responded with mixed sentiment to the compensation debate. While some commenters acknowledge Musk’s extraordinary achievements in building Tesla into a company worth more than all other automakers combined, others have raised questions about his behavior and whether such massive incentives are justified. This comes at a time when the US president’s approval rating dipped to a second-term low of 37%. The Tesla CEO’s connections to the current administration may also play a role in public perception.
The broader discussion reflects concerns about executive compensation practices, shareholder dilution, and whether key person risk at Tesla is adequately addressed. Commenters have noted that Musk’s threats to step down if the deal is rejected add another layer of complexity to the decision facing shareholders.
The opposition from Norway’s fund joins criticism from proxy advisors Institutional Shareholder Services and Glass Lewis, as well as the Take Back Tesla campaign, a coalition of unions and corporate watchdogs. Musk has responded aggressively to these critics, labeling proxy advisors as corporate terrorists and arguing on social media that Tesla’s performance justifies his compensation.
Tesla shares dipped 2.5% in premarket trading following the news of Norway’s vote. The shareholder meeting will ultimately determine whether the compensation package passes, but the growing chorus of institutional opposition signals that even Musk’s most ardent supporters recognize the need for serious scrutiny of executive pay at the world’s most valuable automaker. There’s more coverage at CNBC.