Norway’s Mega Wealth Fund Says ‘No’ to Elon Musk’s $1 Trillion Tesla Pay Package: What It Means for Investors

Norway’s $2 trillion sovereign wealth fund is taking a stand against Elon Musk’s massive pay package at Tesla. This fund, the largest of its kind globally and a key Tesla shareholder, has voted against Musk’s proposed compensation at the annual shareholder meeting. The package could amount to nearly $1 trillion, depending on Tesla meeting specific goals over the next decade.

Norges Bank Investment Management (NBIM) expressed concerns over the sheer size of the award, potential dilution of shares, and what they see as the risks tied to Musk being a critical figure for the company. They noted, “While we appreciate the significant value created under Mr. Musk’s visionary role, we are worried about the total size of the award.”

Tesla shares took a dip of 2.5% in premarket trading after this news broke. The Board is pushing for shareholders to endorse Musk’s pay plan, which would also give him more voting power.

Opposition isn’t new for Musk. A campaign called “Take Back Tesla” has urged shareholders to reject the compensation plan. Proxy advisory firms have likewise recommended against it. Musk has vigorously defended himself against these criticisms, calling certain advisers “corporate terrorists” during a recent analyst call.

In response to one critic, Musk tweeted, “Tesla is worth more than all other automotive companies combined. Which of those CEOs would you like to run Tesla? It won’t be me.”

The situation between Musk and the wealth fund has history. Last year, NBIM opposed reinstating Musk’s earlier $56 billion pay deal after a judge rolled it back. Despite this, the package was eventually approved by shareholders.

Musk’s status as the world’s richest person, with a net worth of about $504 billion, further fuels the debate around executive compensation. This controversy highlights a growing concern among investors about how much is too much when it comes to paying CEOs.

As debates on executive pay continue, discussions around corporate responsibility and governance are becoming more prominent. According to a recent survey by PwC, over 75% of investors believe that executive compensation should align with company performance and shareholder interests.

This situation serves as a reminder of the evolving landscape of corporate leadership and shareholder rights. The conversation about what’s fair in executive compensation is more relevant than ever.



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