Elon Musk’s proposed $1 trillion pay package from Tesla has hit a significant snag. Norway’s sovereign wealth fund, the carmaker’s seventh-largest investor with a $17 billion stake, announced it will vote “no” at the upcoming shareholder meeting.
The fund, the world’s largest, said that while it acknowledges the “significant value” Musk has created, the proposed award is simply too large. It expressed concerns over the “total size,” shareholder “dilution,” and the “lack of mitigation of key person risk.”
This powerful “no” vote adds to a growing wave of opposition. The two most prominent shareholder advisory groups, ISS and Glass Lewis, have both advised investors to reject the deal. Major pension funds, like CalPERS, have also stated their opposition.
The package is designed to heavily incentivize Musk to stay and grow Tesla to an $8.5 trillion valuation, a move that would increase his stake to over 25% and his net worth to over $2 trillion.
Tesla’s chair, Robyn Denholm, has positioned the vote as essential to retaining Musk. However, the dissent comes as Tesla’s performance wobbles, with global deliveries down 13% in the first half of the year and sales slumping in China and much of Europe.
