Norway Fund Opposes Musk’s $56B Tesla Pay Package

Over the weekend, Norway’s $1.7 trillion sovereign wealth fund announced its plans to vote against the approval of Tesla CEO Elon Musk’s $56 billion compensation package. The vote is scheduled for this week, following a ruling by a Delaware judge earlier this year that invalidated the package.

Per LSEG’s data, the fund is Tesla’s eighth-biggest shareholder.

In 2018, Musk’s salary, the highest ever for a CEO in corporate America, got the green light. However, earlier this year, a judge scrapped it, saying it was not fair to shareholders and calling the amount an “unfathomable sum.”

The fund expressed gratitude toward “the significant value generated under Mr. Musk’s leadership since the grant date in 2018.” However, the operator of the fund, Norges Bank Investment Management (NBIM), said, “We remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk.”

Back in 2018, the fund had opposed the package.

NBIM added, “We will continue to seek constructive dialogue with Tesla on this and other topics.”

According to fund data, the fund, with a 0.98% stake valued at $7.7 billion, has consistently raised concerns about the extravagant payout for the CEO.

In response, Elon posted on X (previously Twitter) that the fund’s decision is “not cool,” suggesting that if the fund actually polled its members, they would find “overwhelming support in favor.”

In 2023, it opposed the majority of U.S. CEO compensation plans exceeding $20 million, due to concerns about their alignment with shareholder value in the long run.

In addition, the fund affirmed its support for a shareholder proposal urging Tesla to implement a policy on freedom of association and collective bargaining. This stance represents a victory for labor unions seeking to enhance their influence over the U.S. car maker.