Norwegian Wealth Fund Opposes Elon Musk's Trillion-Dollar Pay Package

Norway's sovereign wealth fund announced it will vote against Elon Musk's proposed $1 trillion compensation package for Tesla at the upcoming annual meeting. Despite criticism, the package is likely to pass due to shareholder support and Texas laws allowing Musk to vote his stake. Other major investors remain undecided.

On Tuesday, Norway's sovereign wealth fund, the largest in the world, declared its intention to vote against Tesla CEO Elon Musk's proposed $1 trillion compensation package during the electric car manufacturer's annual meeting later this week. The historic pay deal, set to be the largest ever for a CEO, has sparked controversy and criticism, though it is anticipated to pass due to substantial investor backing.

The package's approval is likely, bolstered by Texas laws that allow Musk to leverage his 13.5% voting power, representing his substantial stake in the company. In contrast to the Norwegian fund's vote against it, Baron Capital plans to endorse Musk's compensation proposal. Other principal institutional investors, including BlackRock, Vanguard, and State Street, have yet to reveal their voting plans.

Proxy advisory firms ISS and Glass Lewis have strongly advised shareholders to reject the compensation proposal, arguing it is excessively large and might lead to high payouts even if minimal goals are met. Meanwhile, the Norwegian fund — holding a 1.12% stake in Tesla — also announced it would oppose two out of three Tesla directors up for re-election and the proposed stock compensation plan intended for all employees.

(With inputs from agencies.)