Norway’s $1.6 trillion sovereign wealth fund, the largest in the world, announced it will oppose Tesla CEO Elon Musk’s massive pay package at the company’s upcoming shareholder meeting this week. The proposed deal, valued at up to $1 trillion, has drawn global attention for its unprecedented scale and questions over executive accountability.
Shareholders of the electric vehicle giant are set to vote on November 6 to determine the fate of what could be the largest CEO pay package in corporate history. While critics argue that the proposal is excessively generous, efforts to stop it may prove difficult given Musk’s strong support base among investors.
Tesla’s board has urged shareholders to back the compensation plan, with Chair Robyn Denholm cautioning that Musk might walk away from the $1.5 trillion company if the proposal is turned down. However, critics warn that approving the package would hand Musk even greater influence over the automaker, raising concerns about accountability and corporate governance.
Despite the backlash, Musk’s trillion-dollar compensation plan is widely expected to be approved, bolstered by strong investor backing. Tesla’s relocation to Texas last year further strengthened Musk’s position, as state laws permit him to cast votes tied to his own substantial holdings, giving him roughly 13.5% of the company’s total voting power.
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Norway’s sovereign wealth fund is the most significant investor yet to publicly declare its stance on the vote. In contrast, Baron Capital, another major shareholder, has announced its support for Musk’s compensation deal. Meanwhile, Tesla’s biggest institutional investors like BlackRock, Vanguard, and State Street have not yet revealed how they intend to vote.
Influential proxy advisory firms ISS and Glass Lewis have recommended that shareholders vote against Musk’s proposed pay package. They argue that the plan is excessively large, could reward him even without meeting all performance targets, and risks diluting the stakes of other investors. The firms had also advised against approving Musk’s earlier $56 billion compensation deal in 2018, a proposal that ultimately passed with strong backing from Tesla’s large base of individual investors.
Although the plan could give Musk stock valued at as much as $1 trillion over the next decade, a Reuters analysis estimates the actual payout would be somewhat lower, around $878 billion, once the cost of the shares at the time of issuance is accounted for.
“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,” said Norges Bank Investment Management on its website.
Holding a 1.12% stake in Tesla valued at about $17 billion, the Norwegian wealth fund ranks as the automaker’s seventh-largest shareholder. It had also voted “no” on Musk’s earlier pay proposal, a decision that reportedly angered the billionaire, who later declined an invitation to attend a conference in Oslo.
The $2.1 trillion Norwegian fund also announced plans to oppose Tesla’s proposed stock compensation program, which covers all employees but could also be utilised by the board to extend additional benefits to Musk.
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Tesla has defended the compensation proposal, emphasising that Musk would receive “nothing” unless the company achieves major growth milestones. The maximum payout, the board said, would only be granted if Tesla’s market valuation soars to $8.5 trillion, nearly six times its current worth.
As the shareholder vote approaches, the debate over Musk’s trillion-dollar compensation package underscores a larger tension between investor loyalty and corporate governance. While Tesla’s leadership argues the plan aligns Musk’s rewards with the company’s long-term success, critics see it as a reflection of unchecked executive power. With major funds split and influential advisers urging caution, the outcome of the vote will not only shape Tesla’s future but also set a precedent for how far shareholders are willing to go in rewarding high-stakes innovation.