Norway’s $1.5 trillion sovereign wealth fund has joined the backlash against Tesla’s proposed $1 trillion compensation plan for Elon Musk, saying it will vote against the deal. The decision marks a significant challenge for Tesla’s leadership as it seeks shareholder approval at its upcoming meeting.
The fund, which holds a $17 billion stake in Tesla, said it appreciated Musk’s “visionary role” but could not support a pay package of this magnitude. It cited concerns about shareholder dilution, over-reliance on a single executive, and the precedent such a deal could set across global markets.
Tesla’s proposal would grant Musk new shares if the company’s valuation reaches $8.5 trillion — an eightfold increase from current levels. The deal would raise Musk’s ownership stake from about 16 % to over 25 %, solidifying his influence over the automaker.
Tesla’s board argues the incentive plan is essential to ensure Musk remains engaged and motivated. Chair Robyn Denholm said that Musk’s leadership was “vital to maintaining Tesla’s momentum,” warning that his departure could lead to “substantial loss in shareholder value.”
However, critics see the proposal as an overreach. Proxy advisers Glass Lewis and ISS have already urged investors to reject it, saying the award’s size is “out of proportion” to market norms and inconsistent with shareholder interests. Several major pension funds, including CalPERS, have also voiced opposition.
Tesla’s recent performance adds context to the debate. Deliveries fell by 13 % in the first half of the year, and shipments from its Shanghai factory declined 10 % year-on-year in October. These figures have raised doubts about the feasibility of Tesla’s ambitious targets.
The Norwegian fund’s vote will be closely watched as a bellwether for institutional investor sentiment. Its rejection underscores a growing push among global shareholders to rein in executive pay and demand stronger alignment between rewards and sustainable performance.