Norway wealth fund to oppose Musk’s US$1 trillion Tesla pay deal

Elon Musk listens as President Donald Trump speaks during a news conference in the Oval Office of the White House, Friday, May 30, 2025, in Washington. (AP Photo/Evan Vucci)

OSLO -- Norway’s sovereign wealth fund, the world’s largest, said on Tuesday it would vote against ratifying Tesla CEO Elon Musk’s proposed compensation package that is potentially worth US$1 trillion at an annual general meeting later this week.

Investors in the electric-vehicle maker will decide on November 6 whether to approve the package, likely the largest-ever CEO compensation agreement. Critics have called the pay deal excessive but face an uphill fight to block it.

Tesla’s board is pushing for shareholders to approve the plan, with Chair Robyn Denholm warning that Musk could leave the $1.5 trillion market cap firm if the deal is rejected. Opponents worry that it will give Musk too much unchecked power.

Blocking Musk’s pay package won’t be easy

Musk’s new trillion-dollar pay package will almost certainly pass, given broad investor support. Laws in Texas, where Tesla moved its headquarters last year, also allow Musk to vote his own large stake, giving him some 13.5% of voting power.

The Norwegian wealth fund is the largest investor so far to say how it plans to vote. The next-largest to do so, Baron Capital, plans to back Musk’s pay package. Tesla’s largest institutional investors, including BlackRock, Vanguard and State Street, have yet to disclose their voting plans.

Proxy advisers ISS and Glass Lewis have both urged shareholders to reject Musk’s compensation plan, arguing it would be too large, deliver high payouts even if the CEO only meets some goals and could dilute the holdings of other investors.

Both also opposed a shareholder vote last year on a 2018 $56 billion package for Musk that passed with overwhelming support from Tesla’s army of mom-and-pop investors.

Praising value creation, concerned with size

While the package could grant stock worth up to $1 trillion over 10 years, the cost of those shares at the time of the award will be deducted, making the value to Musk slightly lower, at up to $878 billion, according to a Reuters analysis.

“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,” Norges Bank Investment Management said on its website.

The fund, Tesla’s seventh-biggest owner with a 1.12% stake worth $17 billion, also voted “no” to Musk’s previous compensation plan, drawing a sharp response from the CEO, who turned down an invitation to a conference in Oslo.

NBIM on Tuesday also said it would vote against two out of three Tesla directors who are up for reelection, declining to back board veterans Kathleen Wilson-Thompson and Ira Ehrenpreis while supporting Joe Gebbia, who joined in 2022.

The $2.1 trillion Norwegian fund also said it would vote against Tesla’s proposed general stock compensation plan, which is intended for all employees and can also be used by the board to benefit Musk.

Tesla says its CEO would earn “nothing” unless the company’s market value grows substantially and that the maximum award is only paid if the group reaches several milestones, most notably a market value of $8.5 trillion, a near six-fold increase.

(Reporting by Terje Solsvik; Additional reporting by Nick Carey in London; Editing by Joe Bavier, Thomas Derpinghaus and Sharon Singleton)