Norway’s sovereign wealth fund rejects Elon Musk’s $1tn pay deal

The world’s largest sovereign wealth fund has rejected a $1tn (£765bn) pay deal for Elon Musk in a shareholder vote to decide his future at Tesla.

On Tuesday, Norges Bank Investment Management, which manages Norway’s giant oil fund, became the first major Tesla shareholder to oppose the controversial deal by saying it would vote against Mr. Musk’s pay package.

Tesla’s board, led by chairman Robyn Denholm, has proposed giving the carmaker’s founder a 12% stake in the group if he can increase its value to more than $8.5tn over the next 10 years.

Norges said: “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.”

Shareholders will vote on the plan at Tesla’s annual meeting on Thursday. Norges has a 1.2% stake in Tesla and is one of its top 10 shareholders.

The wealth fund has previously opposed Mr. Musk’s pay packages. It voted against a proposal last year to reinstate a $56bn deal for the billionaire that a Delaware judge had canceled following a shareholder lawsuit.

Mr. Musk’s pay deal is tied to a series of ambitious goals, including selling 20 million electric cars, one million AI robots, and launching a fleet of more than one million robotaxis over the next decade.

Further opposition to the proposal

The proposal has already been opposed by shareholder advisory firms, including Glass Lewis and Institutional Shareholder Services (ISS), as well as by a number of minority Tesla shareholders and pension funds.

Glass Lewis warned that the deal should “warrant significant concern” for investors, noting that it offers Mr. Musk “extraordinary pay levels without commensurately exceptional performance.”

Mr. Musk, the world’s richest man, accused the proxy firms of being “corporate terrorists” in response.

“I just don’t feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass Lewis,” he added.

The Tesla and SpaceX boss, whose net worth is around $500bn, has implied he could quit the car company if his pay award fails to pass.

Last month, Ms. Denholm warned investors that Tesla runs “the risk that he gives up his executive position” if shareholders reject the deal.

Shareholders are also being asked to vote on re-electing the company’s board and on a shareholder proposal to invest in xAI, the AI business behind the chatbot Grok.

Norges also voted against the re-election of two of Tesla’s directors and against investing in xAI.

Mr. Musk is Tesla’s largest shareholder, with around a 15% stake.