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Topline
Norway’s sovereign wealth fund—a key Tesla shareholder—on Tuesday announced it will vote against the electric carmaker’s proposed new compensation package for CEO Elon Musk, marking the latest investor pushback against the lucrative pay deal, which will be worth around $1 trillion if the company achieves a set of ambitious goals over the next decade.
The Norwegian sovereign wealth fund said it will vote against Tesla's proposed $1 trillion pay packaged for CEO Elon Musk.
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Key Facts
Norges Bank Investment Management, which oversees Norway’s Government Pension Fund Global, outlined its voting plans for Tesla’s annual shareholder meeting, noting that it will vote against Musk’s “CEO Performance Award.”
The fund, which is also known as the “Oil Fund”, said: “While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award.”
The fund said the vote was consistent with its “views on executive compensation,” and noted that it did not mitigate “key person risk”—a scenario where a business is overly dependent on an individual.
“We will continue to seek constructive dialogue with Tesla on this and other topics,” the statement added.
The annual meeting is set to take place on Thursday and Tesla’s board has described it as a “critical inflection point” for the company.
How Much Tesla Stock Does The Norwegian Sovereign Fund Own?
The Norwegian Government Pension Fund Global owns a 1.14% stake in Tesla, which in June was worth around $11.7 billion. This is not the first time the fund has opposed a proposed compensation plan for Musk. In 2024, the company voted against Musk’s earlier pay award that was worth around $56 billion. At the time, the fund’s management said its vote was “consistent” with its opposition to the same award in 2018 and added: “While we appreciate the significant value generated under Mr. Musk's leadership since the grant date in 2018, we remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk.”
What Do We Know About Other Opposition To Musk’s Pay Package?
Last month, a letter sent to the carmaker’s shareholders urged them to vote against the pay proposal and accused the company’s board of harming Tesla’s reputation in their “relentless pursuit of retaining” Musk. The signatories of the letter included Tesla investors SOC Investment Group and the American Federation of Teachers. The state treasurers of Nevada, New Mexico, Connecticut, Massachusetts, Colorado and the comptrollers of Maryland and New York City also signed on. The letter alleged that Tesla’s board is “made up of directors with close ties to the CEO,” and the proposed pay packages “provide so much discretion to Tesla’s Board that shareholders cannot be confident of impartial treatment.” The letter added: “We believe that these relationships have enabled a culture where the Board consistently fails to challenge Mr. Musk, even when his actions are detrimental to the Company’s value and its public shareholders.” Later in October, proxy advisor Institutional Shareholder Services also urged Tesla’s shareholders to vote against the pay package. “Although one of the main reasons for this award is to retain Musk and keep his time and attention on Tesla instead of his other business ventures, there are no explicit requirements to ensure that this will be the case,” the ISS said.
Tangent
In premarket trading early on Tuesday, Tesla’s share price slumped around 2.61% to $456.18.
Key Background
The proposed pay package was outlined by the Tesla board in an SEC filing in September. Under the proposal, Musk would gain an additional 12% stake in the electric car maker spread across 12 tranches over the next 10 years if he meets a set of goals. This would be in line with a demand he made last year, as the board confirmed he threatened to pursue his other interests and leave Tesla” if he was not assured a 25% voting interest,” in the company. To receive his full compensation reward, Musk will need to meet the ambitious goal of raising Tesla’s market cap from around $1.47 trillion at present to $8.5 trillion within a ten-year period.
Further Reading
Tesla’s $1 Trillion Pay Proposal For Musk Faces Investor Pushback—What We Know (Forbes)
Elon Musk Threatened To Quit Tesla Before $1 Trillion Compensation Deal (Forbes)
